JOHANNESBURG (miningweekly.com) – South Africa’s Department of Mineral Resources (DMR) has granted a long-term mining right to TSX-listed Ivanhoe Mines for its Platreef project, in Limpopo, the company announced on Monday.

Ivanhoe now had the right to mine and process all platinum-group metals (PGMs), nickel, copper, gold and certain associated metals and minerals from the Platreef project mining area, subject to the company complying with the terms on which the mining right was granted – including the requisite environmental management programme becoming effective, which was expected in due course.

It was expected that the mining right, when executed, would be valid for an initial period of up to 30 years, after which it would be renewable for an unlimited number of consecutive periods of up to 30 years each, the company said.

“The awarding of this mining right is hugely significant not only for Ivanhoe but for South Africa’s mining industry as a whole and is a culmination of Ivanhoe’s exploration in the Bushveld for the past 16 years,” Ivanhoe executive chairperson Robert Friedland said.

He also noted that the Flatreef deposit, which was discovered during a deep-drilling programme launched in 2007, was projected to become Africa’s lowest-cost producer of PGMs.

“Ivanhoe now has the green light from the South African government to build a pre-eminent mine that will create thousands of new direct and indirect jobs and contribute to socioeconomic development in the Mokopane region and beyond.

“We are looking forward to building and bringing our Platreef mine into production in partnership with local communities, entrepreneurs, employees and the government – stakeholders that share our commitment to responsible and responsive mining,” Friedland said.

Ivanhoe CEO Lars-Eric Johansson said the company would pursue a phased approach for the development of the project, as was announced in its independent, preliminary economic assessment released in March.

Meanwhile, Friedland hailed the cooperation between officials of the DMR and other national and provincial government offices, local community representatives and members of Ivanhoe’s project team who helped shape the broad-based black economic-empowerment (BBBEE) initiative that had been designed to deliver significant benefits for its participants, particularly the residents in the local communities.

In terms of Platreef’s mining right, the project’s BBBEE partners would own a combined 26% of the Platreef project, which would reduce Ivanhoe’s current 90% ownership in the project to 64%.

The remaining 10% of the project would continue to be owned by a Japanese consortium comprising Itochu Corporation, ITC Platinum Development, an Itochu affiliate, Japan Oil, Gas and Metals National Corporation and Japan Gas Corporation.

The Japanese consortium’s 10% interest in the Platreef project was acquired in two tranches for a total investment of $290-million. The remaining proceeds of the investment continued to fund development work on the project.