The six-month moratorium on new applications for prospecting licences 
announced last week by Mineral Resources Minister Susan Shabangu has been welcomed by Petmin chairperson Ian Cockerill. 
“The decision on the moratorium 
is helpful,” he says. “Clearly, the system is not working as it should. It’s absolutely vital that we move to an open, transparent system for mining licensing.”

The South African mining 
industry was recently rocked by the discovery that loopholes in the country’s minerals and mining legislation allow companies to claim prospecting rights over properties on which other companies already have mining rights and operations. “I think it is fair to say that recent events have made people sit back and review decisions to invest [in mining] in South Africa,” he states.

Cockerill points out that there are many factors which affect a company’s decision on whether or not to invest in a mining project. These include the inherent quality of the asset base, the inherent quality of the project, its likely return, what the local skills base is, and whether the political, economic and legislative environment is friendly to mining or not.

“I don’t think people [overseas] will say: ‘We won’t mine there.’ South Africa has lots of opportunities. But the country’s reput-
ation has been damaged,” he 
asserts. “Not only must the system work, it must be seen to work. There are some question marks over the system that need to be investigated. But I believe there will be a successful mining industry in South Africa.”

As for Petmin, it “is going 
extremely well”, reports Cockerill. He highlights that, six years ago, it was a shell company worth R24-million and today it is an operational mining company worth some R1,6-billion. “If one looks at the success of Petmin today, it made that success by an absolute brutal focus on value accretion. We’re going to continue to apply these principles of value-add to Petmin. In five years’ time, we’d like to see ourselves as a larger, midtier producer of a variety of commodities.”

Currently, Petmin produces 
anthracite, silica and chert from two operational openpit mines and is involved in the development of a potential iron project. The 
operational mines are Somkhele, in KwaZulu-Natal and Sam-Quarz, in Mpumalanga; the Veremo iron project is also in the latter province.

Somkhele, which was acquired by the company in 2005 when it was still in the prefeasibility 
stage and was commissioned in 2007, produces high-quality 
anthracite. “It’s a very valuable asset in Petmin’s hands,” affirms Cockerill. “People are waking up to the potential of anthracite as a substitute for metallurgical coal, except where hard coking coal is required – a very unsexy product, but an essential one when it comes to the production of steel. There are no [railway transport] issues as Somkhele is only some 80 km from Richards Bay and we truck our anthracite to the [Richards Bay Coal] Terminal.” 
Most of Somkhele’s production goes to South America, with some going to Europe and the rest being sold locally.

The company is increasing the capacity of the existing washing plant and has started the erection of a second plant, which should be operational in December 2011 or January 2012. This will double 
the colliery’s output of saleable anthracite from 500 000 t/y to 
1 000 000 t/y.

“We have initiated a fairly 
extensive exploration programme in the northern area of the Som-khele lease, and we’re very optimistic about what we will find,” he reports. “The colliery already has 24-million tons of proven and probable reserves and another 24-million tons of resources.”

SamQuarz has been operational 
since 1955 and was bought by the company in 2004, and is South Africa’s largest producer of high-
quality silica, used in glass production and metallurgical smelting, as well as chert. The mine has 60,63-million tons of proven and probable quartzite reserves and 11,48-million tons of chert reserves. “There is very exciting potential for shallower reserves. We are considering altering the mining plan to bring these to 
account earlier than planned,” he highlights.

Regarding the future, the company would like to add to its commodity portfolio. “We’ll focus on coal – metallurgical, not thermal; we like ferrous [metals], we like copper,” explains Cockerill. “We’re looking at opportunities in South Africa, Southern Africa, and other parts of the world.”

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.