The smelting technology deal that the London-listed Braemore Resources plc had struck with South Africa's state-owned Mintek was designed to "look after" emerging South African platinum miners as the Department of Minerals and Energy did not want them to be dependent on South Africa's big-three platinum producers for smelting capacity, Braemore executive director Clayton Dodd said in Johannesburg on Monday, ahead of the company's JSE listing on Wednesday.

The transaction also had a "very high" 50% black economic empowerment (BEE) component to it, Dodd told Mining Weekly Online.

In five years, Braemore anticipated becoming a mining, smelting and refining entity that would have played a key role in the consolidation of developing platinum companies in South Africa, CEO designate Leon Coetzer said.

Dodd, who also represents Braemore's major 40% shareholder Atomaer, said Braemore put up the money required to develop Mintek's ConRoast technology to commercial stage.

The 50% BEE transaction would be conducted on commercial terms, he said.

ConRoast offered a solution to miners of upper group two (UG2) reef and platreef ore, the technology achieving a 99% recovery of platinum group metals from UG2 ore and a reduction of 25% off capital expenditure required to smelt platreef.

The company had a ten-year period of exclusivity with Mintek, which would receive licence fees from Braemore from the date of commissioning of new smelters by the company.

Dodd said that Braemore had paid some $8-million to Mintek to date, the upgrade on the current 1,2 MW at Mintek to beyond three megawatt requiring a contribution $5-million.

The licence fee "was not huge" and was set against the background of the Department of Minerals and Energy (DME)-controlled Mintek recognising the important role of South Africa's platinum industry as a large taxpayer and a large employer, and the deal was subject to the 50% BEE component being set in place.

"The licence fee is not the real benefit, because don't forget Mintek is part of the DME which is part of the government. The benefits that South Africa will get are in the BEE, employment and taxation going forward," Dodd said.

"And more importantly," said acting CEO David Russell, the transaction ensured that there was smelting capacity for those emerging platinum companies that had acquired platinum properties as part of the use it or lose it legislation. "Without a smelter dedicated to UG2, there is absolutely no point in advancing those projects," says Russell.

After ten years, Mintek would have the right to licence the technology to other parties, who would receive the ConRoast technology as it existed prior to the involvement of Braemore, which would retain advancements of the technology as proprietary.

Braemore had the exclusive global ConRoast licence, with two specific "carve outs", the first being that the technology was developed initially with Falconbridge for nickel smelting to reduce sulphur-dioxide (SO2) emissions and Falconbridge might install that to remove SO2 from nickel, and the second being access to the technology by Lonmin, which had helped to develop it, but such access ceased at the point of ConRoast's commercialisation, which was imminent, Russell said.

Emerging miners were discussing opportunities to pool-and-share with Braemore, which would provide the smelting technology.

"It's essentially chrome insensitive," said Russell of using ConRoast technology to smelt UG2, whose chrome richness often presented smelting problems.

"Because we extract the sulphur in an oxide form upfront, we smelt a clean product thereafter and the environmental impact is minimised," said Coetzer of using ConRoast to smelt platreef.

Mintek in Randburg currently provided capacity to produce 20 000 oz of platinum group metals and was being expanded to produce 80 000 oz. Simultaneously, a feasibility study would be concluded in the next two months into the viability of constructing a 10 MW furnace, possibly in the Rustenburg area, which would provide a capacity to produce 500 000 oz.

"We have proven technology for 1MW and 3MW furnaces, which enables us to provide customised solutions," said Coetzer of the potential assistance to small emerging platinum miners.

"We will put smelters up as required," said Russell.

Braemore was also working on base-metal refining technology to complement the smelting technology.

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