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South Africa has the skills to resolve the Transnet issue – Menar

Menar MD Vuslat Bayoglu interviewed by Mining Weekly's Martin Creamer. Video: Darlene Creamer.

3rd November 2023

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – South Africa has the skills to resolve the Transnet issue, says Vuslat Bayoglu, the MD of Menar, a private investment company with an actively managed and growing portfolio of mining assets currently including anthracite, coal and manganese in South Africa and gold and nickel outside of South Africa.

Speaking to Mining Weekly in a Zoom video interview, Bayoglu, described as helpful the discussions industry leaders are having with Transnet to try and resolve rail constraints.

“Transnet has not been able to solve its problems resulting in huge opportunity costs. But this downside has made stakeholders appreciate the importance of coal export revenues. The price levels are still way above the pre-Covid period, which testifies to coal’s resilience,” said Bayoglu. (Also watch attached Creamer Media video.)

“We know what the problems are and industry can provide help to Transnet. If Transnet performs, we can bring revenue into the country but if it carries on the way it did last year, then it’s going to be very bad for the fiscus,” said Bayoglu, whose attendance at the Kgalema Motlanthe Foundation event in Drakensberg over the weekend convinced him that Finance Minister Enoch Godongwana is very well informed about the devastating impact to the fiscus of a Transnet that is unable to secure revenues from the export of mined products, be they coal, iron-ore, manganese or chrome.

“Mining companies with significant export portfolios started off 2023 financially healthy because of the wins from 2022. Unfortunately, we cannot ignore the fact that prolonged rail constraints are starting to create setbacks.

“Ordinary people on the street will not feel the effects immediately but if we don’t have enough foreign currency flowing into the country, we’ll all start feeling the impact of Transnet not performing,” Bayoglu pointed out.

“It’s not about pointing fingers but the reality is that we have to make Transnet work, otherwise the mining industry, which is the backbone of this country’s economy, will be failed,” he emphasised.

Meanwhile, with its own expansion projects yielding positive results, Bayoglu reported 2023 as being a good year for Menar, which undertook the mammoth task of progressing the development of Gugulethu Colliery from an idea on paper to being a functioning site on which the first coal is expected to be exposed by the end of this month.

Moreover, it is commissioning the processing plant to make sure that clean coal is produced.

Being constructed on the busy project site are pollution control dams and roads. “Hopefully, we’ll start processing first coal by the end of January next year,” said Bayoglu.

Every effort will be made to save water at Gugulethu, which has a 400 t/h plant with a 28 t/h filter press onsite. Targeted is the mining of 200 000 t of coal a month by January, with the first washed coal by February amid the building of good relationships with surrounding farmers and the community.

In addition to Gugulethu, Thuso, also in Mpumalanga, was announced as part of Menar’s R1.4-billion investment pledge at the South Africa Investment Conference led by President Cyril Ramaphosa, with the development of Thuso expected to begin in 2024.

The revived and now producing Maye B decline at Zululand Anthracite Colliery (ZAC) has been re-equipped into two sections.

Furthermore, Mngeni, ZAC’s newest shaft will hopefully be completed this year after rain prevented its targeted completion at the end of October.

At Kangra colliery, good production levels are being seen with the mining of the Kusipongo reserve owing to the recently developed Udumo and Belgarthen Adits.

In addition, the flagship Bekezela project in Springs, Gauteng could be issued its water use license (WUL) before the end of this year, opening the way for the employment of 800 people along with major procurement, bursaries, learnerships, internships and local economic development projects as part of environmental, social and governance (ESG) adherence.

“We have agreed with the surface right holder which means that we won’t have any obstacles after the WUL is granted and there’s already a potential customer for the product. This is actually an exciting opportunity for us because we have never developed a mega mine and it’s going to be a great success story,” Bayoglu enthused.

Planned is for the 600 000 t mined a month to be washed at a 70% to 75% yield so that the customer receives clean coal.

Mining Weekly: Can you talk us through your ESG-aligned initiatives?  

Bayoglu: Through our operations, we have been able to continue creating job opportunities, bursaries, internships, and economic development projects. It is important for us to make positive impact that changes lives for the better beyond the life of our mines. This year Canyon Coal hosted the Khanye colliery social and labour plan (SLP) public participation roadshow. We were able to engage with more than 1 500 people across Tshwane Region 7, to update them on progress for the previous SLP and engage on the SLP to be drafted for the coming five years. ZAC also rolled out environmental campaigns, advanced the development of the commercial goat farming project for the Zungu community and started building new toilets for learners at Lomo Primary School. We also embarked on portable skills training at ZAC, with 100 of our employees signing up to get assistance with getting driver's licences.

Menar recently hosted the fifth Mining Journalism Training (MJT) programme; how did that unfold?

The MJT programme was successful and 2023 is another year in which Menar has an opportunity to engage with journalists and journalism students. We had a great line-up of speakers with topics ranging from illegal mining, wage negotiations, critical minerals and more. We would like to continue supporting a free and fair media through such initiatives, because press freedom is one of the key elements of a functioning democracy.

Edited by Creamer Media Reporter

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