President Jacob Zuma last Friday launched the Stanley Nqobizizwe Nkosi manganese sinter plant near Hotazel, in the Northern Cape, marking the latest high point of Daphne Mashile-Nkosi’s long walk to emancipating manganese from the sole preserve of the male species.
Mashile-Nkosi, a 55-year-old grandmother, is the executive chairperson and cofounder of Kalagadi Manganese, the black economic- empowerment company that holds the right to mine manganese on various farms in the area.
The mine and the sinter plant are advanced and Mashile-Nkosi tells Mining Weekly that she will not let up until the smelter is built as well.
The Hotazel complex is part of an emerging manganese mine and beneficiation hub that is being developed by Kalagadi Manganese and more can be expected in the Eastern Cape.
“The smelter must be constructed. Forward we go, backwards, never!” Mashile-Nkosi hollered from the launch podium.
After walking through the plant and observing the large sinter plant, tall mine headgear, water reservoir, power line, roads and rail link, the visiting politicians were impressed.
“This landmark project boosts our National Development Plan,” said Economic Development Minister Ebrahim Patel.
“Here is a heroine,” said Zuma.
“If Daphne can do it, so can everyone else,” said Minerals Minister Susan Shabangu.
The manganese sinter plant has already been put through its paces.
“No raw ore will leave this place,” Mashile-Nkosi told the politicians.
Sinter was being produced successfully until September, but had to cease temporarily as a result of transformer failure. (See also Two-Minute Interview on following page.)
The Siemens transformer is expected to be restored during December and resume functioning in mid-January.
Kalagadi Manganese CFO Sello Motau told Mining Weekly at the launch that investment at Hotazel to date, including the development of the underground mine and infrastructure, is R5.3-billion, the sinter plant, absorbing R1.6-billion of that.
The water reservoir holds 17-million litres, the power line has an 11 kVA capacity, the mine-built road covers 9.8 km and the rail link extends over 18.6 km.
The underground ore has manganese content of 37% to 38%, which the sinter plant will enhance to 47% and 48%.
The mine shaft descends to a depth of 281 m.
The sinter plant has been named after Mashile-Nkosi’s deceased husband and business partner, a struggle veteran and former Robben Island prisoner, and the shaft has been named after Thembeka Myedi, a woman also deceased, who helped Kalagadi Manganese secure its mining licence with the Department of Mineral Resources.
Myedi participated in the Kalagadi Develop-ment Trust for the empowerment of women in the area and helped to set up an education trust created for her eight children, which has produced its first doctorate.
Plans to construct the manganese smelter in the Eastern Cape were well advanced, Kalagadi Manganese CEO Thulo Malumise told Mining Weekly.
Malumise added that funding discussions were under way with leading international development finance institutions (DFIs) to finance the smelter, for which procurement was expected to begin in the third quarter of 2014.
Strong financial backing has been ongoing from South Africa’s State-owned Industrial Development Corporation (IDC), which holds 10% of the shares and which is keen to promote optimum beneficiation.
Four 63 MVA furnaces are expected to be procured initially, with provision made for an additional two furnaces that could be included at a later date.
Export Credit Agency furnace funding is being sought, which may be secured with the help of UniCredit Bank, whose sub-Saharan Africa director, Dr Christian Nägele, was prominent at the launch.
Malumise said the DFIs were showing keen interest in the complex because of its bene- ficiation offering as well as its unique African characteristic of being women-led.
He said that, once in steady state, the complex would employ between 700 and 800 people permanently. During construction, it had created 7 400 direct jobs.
Envisaged is the railing of 700 000 t/y of sinter to the smelter within the Coega industrial development zone at the deep- water Ngqura port, near Port Elizabeth, which is designed to yield 320 000 t/y of high-carbon ferromanganese.
Of the 2.4-million tons of sinter expected to be produced a year, 700 000 t is earmarked for the smelter and the rest exported.
Financial institutions that came in for special mention from the launch podium included the African Develop-ment Bank, the IDC and Absa Bank.
The company is also talking to the Development Bank of Southern Africa.
“We’ve focused on DFIs because they give us a longer tenure, which allows for development,” Mashile-Nkosi told Mining Weekly.
Even though Kalagadi Manganese is buying out ArcelorMittal’s share of the project for R3.9-billion, the large steelmaker is expected to continue to source manganese product from its former partner, through a possible offtake arrangement.
ArcelorMittal’s initial offtake ambition was reportedly in the region of 850 000 t/y.
Class of ‘76
Mashile-Nkosi – who did not complete her matriculation at the Sekano Ntoane High School in Soweto in 1976 because she had become immersed in the epoch-making Soweto student uprising of June 16, which is today commemorated as Youth Day, a South African national holiday – has also sparked new resolve in the politicians to insist on transformation and beneficiation.
Now, on the beneficiation front, the theme set is that if Mashile-Nkosi can do it, so can the better funded and more experienced mining companies.
“Beneficiation is the way the whole of Africa has to go,” said Zuma, who had just returned from Ghana where, he said, the same aspiration was intensifying.
The President singled out the Northern Cape province’s Big Hole of Kimberley as a painful reminder of the direction in which mining should never again be allowed to head.
“Transformation is not an option. It’s either that you are with us or you ship out,” warned Shabangu, hawkishly and ominously, in view of the intense current industry discussion under way ahead of the imminent potential enactment of far-reaching legislative amendments to South African minerals legislation.
The President suggested that Kalagadi Manganese should become the future model for the awarding of mining licences.
Mashile-Nkosi’s first main job was as a founder member of the Detainees Paralegal Support Committee in 1982.
But then in 2001, she and her late husband set out to build the manganese mine, sinter plant and smelter.
She has been through acrimonious court cases and even a company hijacking.
“I always look at the vulture. It’s a very patient bird. It waits up there and gets what it wants at the end of the day,” says Mashile-Nkosi, who admits to having an autocratic manage- ment style – “but with a feminine touch”.
The Kalagadi journey began in 2001 when Mashile-Nkosi’s late husband met friends who had been working at Samancor.
“We decided to drive out there from Johannesburg to see what it was all about,” Mashile-Nkosi recalled to Mining Weekly in a video interview.
They had to wait until 2005 to be awarded the mining licence and that was when the capital raising began and the realisation dawned of just how deep one’s pockets have to be to fund the development of a mineral resource.
Banks proved risk averse, particularly when it came to a group of black women with negligible previous experience.
“We put our house into the deal and fortunately Investec lent us R12.5-million, which paid for the prefeasibility study,” she recalled.
The study was taken to the IDC, which lent R60-million, R54-million of which went towards a bankable feasibility study, which attracted suitors.
As a partner, Kalagadi chose steelmaker ArcelorMittal, which paid $432.5-million for its Kalagadi interest when the manganese price was at an all-time high – just ahead of the crunch.
This enabled Kalagadi to distribute R222-million to 14 different historically disadvantaged groups, including black women’s groups and groups of disabled people.
However, the deal with ArcelorMittal later turned sour and the South Gauteng High Court had to rule that the Luxembourg-registered steelmaker stuck to the letter of its R241.3-million Kalagadi shareholders’ agreement.
Mashile-Nkosi, or her nominee – which might be a consortium consisting of some of the existing Kalahari Resources share- holders – agreed to acquire ArcelorMittal’s 50% Kalagadi shareholding and this is now expected to be completed amicably in 2014.
“From 2014 onwards, we’re looking at an annual revenue generation of about R12-billion to R13-billion,” says Mashile-Nkosi, who is also targeting a 50% female employee complement.
The projected revenue takes into account the high-carbon ferromanganese segment of the project.
She sees ample scope for expansion, both in terms of the current resource of 130-million tons and the size of the equipment selected.
Power is to be supplied by a 132 kV line from the Ferrum substation near the Sishen iron-ore mine. The Kalagadi mine will require 35 MW.
A rapid load-out rail station will be the focal point of a link to the rail network.
A pipeline, which will follow the rail route, will bring water from the Vaal Gamagara pipeline and be managed by Sedibeng Water.
DFIs expected to fund proposed smelter