Aggregates producer Blue Crane Resources & Minerals’ Blue Crane Mine (BCM) has secured an offtake agreement to supply aggregates for Bloemfontein-based road construction and maintenance company Tau Pele Construction over the next 18 months.

BCM is located near the town of Indwe, in the Eastern Cape.

Blue Crane Resources & Minerals director and chairperson Mcebisi Limba tells Mining Weekly that the Eastern Cape government-owned economic development agency, the Eastern Cape Development Corporation (ECDC), on behalf of BCM, is also soliciting opportunities associated with the new 14 km road construction from Indwe to the Elitheni coal mine, in Guba Village, which requires aggregates estimated at more than R30-million.

ECDC CEO Buhle Dlulane adds that BCM is also negotiating a supply contract with the local municipality for 1 500 Reconstruction and Development Programme houses in Guba Village, with potential aggregates required amounting to about R27-million.

“Subsequent offtake agreements and contracts will be financed through the ECDC. The plan is to gradually expand operations and supply capacity beyond the 200 ha the mine currently occupies and to use the available land (1 000 ha) for additional production capacity,” he comments.

Limba explains that the agreement is a royalty-based one, as BCM does not have its own mining and processing equipment. He also notes that Tau Pele has appointed local crushing specialist Danoher Contracting to undertake the crushing and screening of materials at the mine.

Currently, the mine is hiring a plant worth about R150-million, including machinery and earthmoving vehicles.

“However, we plan to operate the mine in future, once BCM has gained the required experience and raised the necessary capital to purchase the appropriate equipment,” Limba states, adding that the company is seeking additional funding to realise this goal, as it requires about R200-million to fully equip the mine.

Local Upliftment

Currently, Danoher employs about 40 people to carry out mining activities at the quarry, while BCM has employed about 15 people directly to date, with both companies intending to expand these numbers, once further offtake agreements have been concluded.

Limba says that the local community has responded positively to the opening of the mine, as, in addition to creating direct job opportunities, it has increased general business activities in the area. He notes that, for example, many of the local bed and breakfasts are staffed by contract workers that have relocated nearer to the mine.

Additionally, Limba reveals that the company is currently in discussions with the eMalahleni local municipality and the Chris Hani district municipality to set up a joint venture to establish a manufacturing plant at BCM to produce road surface materials to pave the roads in the region.

“There are also existing clay brick manufacturing plants in the region, which will be able to increase their product offering owing to the different aggregate materials that BCM is able to offer them,” he concludes.