JOHANNESBURG (miningweekly.com) – Diversified mining company Rio Tinto announced on Tuesday that it had commenced the process of restarting operations at Richards Bay Minerals, in KwaZulu-Natal.
This follows a stabilisation of the security situation around the mine, supported by the national and provincial government, as well as substantive engagement with host communities and their traditional authorities, the company stated in a media release to Mining Weekly.
Richards Bay Minerals is one of the largest businesses in KwaZulu-Natal, with a workforce of about 5 000 people.
The company contributed R8-billion to the national economy in 2020 and has also been forced to delay the R6.5-billion Zulti South minerals sands project, which over 25 years would deliver R100-billion worth of projected benefit to the South African economy.
The Zulti South project, which has been stopped in its tracks, is fully permitted and fully funded. Construction began in the first half of 2019, but was brought to a halt in December 2019 amidst community unrest.
The project expands the lease area of Richards Bay Minerals and increases mine life by a quarter century. It is at-the-ready to bring significant capital spend to the local area, but there first has to be safety and security.
“The safety and security of our people has been our priority throughout and we recognise the collaboration and constructive dialogue we have had with all stakeholders to get us into a position where we can restart operations and resume contributing to the host communities, KwaZulu-Natal and South Africa. I also acknowledge the resilience and dedication shown by all our people over the past weeks,” Rio Tinto CE Minerals Sinead Kaufman stated in the latest release.
The operations of Richards Bay Minerals, according to the release, will be ramping up to capacity as soon as possible, with the overall impact of the suspension of operations, including the shutdown of furnace number 4 as announced on July 21, still to be assessed. At this time, the force majeure declared on customer contracts remains in place.
The closing of the four furnaces was because of the depletion of available feedstock at the plant as a result of mining operations being halted following an escalation in the security situation at the operations which hampered the mine’s ability to operate safely.
SUPPORT DURING COVID
In April 2020, Mining Weekly carried reports of Richards Bay Minerals committing R1.5-million towards meeting the needs of its employees and the community during the Covid crisis and earlier this year, Richards Bay Minerals MD Werner Duvenhage postulated, during a panel discussion at the virtually-hosted Investing in African Mining Indaba 2021, that Zulti South’s challenges could potentially be resolved if approached in the same way as the Covid crisis had been approached, collaboratively.
Panel discussion moderator White & Case partner Gary Felthun had asked Duvenhage to outline the factors that were holding the Zulti South project back, and what needed be done to take it forward.
The KwaZulu-Natal provincial government in August 2019 applauded Richards Bay Minerals and its four traditional authority hosts for reaching and signing Zulti South’s procurement principles agreement, which was announced as one that had brought to an end a protracted impasse between the mining company and the host communities.
“We all have the responsibility to ensure that the R100-billion value of the Zulti South project is allowed to help our economy. There needs to be collaboration all the way through. It shouldn’t stop at the issuing of the mining licence. It should go all the way through,” was Duvenhage's plea to the panel, which included Department of Mineral Resources and Energy director-general Advocate Thabo Mokoena, Minerals Council South Africa CEO Roger Baxter, Sibanye-Stillwater CEO Neal Froneman and Exxaro Resources executive head of stakeholder affairs Mzila Mthenjane.
“We’re facing overwhelming challenges in advancing this project – challenges that could be resolved if we approached it in the same way as we’re dealing with Covid,” Duvenhage hypothesised during the panel discussion
The project includes programmes that see to the development of local suppliers, bringing in black-owned women businesses, promoting small, medium-sized and microenterprises and advancing low-cost financing for suppliers.
“Yet, it’s still not even in its development phase,” Duvenhage lamented.
Baxter expressed the hope that Zulti South could be unblocked, and reported that a 100-plus-response deep dive done by Minerals Council South Africa with its members revealed that more than R20-billion worth of projects were blocked in the short term because of regulatory hurdles.
Moreover, a survey of members a couple years ago had indicated that if fundamental issues were addressed, companies could probably escalate their investment 80% above their current investment levels.
Richards Bay Minerals and community stakeholders have reached an agreement to support enhanced governance and controls of community trusts, together with greater transparency.
This agreement signifies the parties’ commitment to working together towards modernising the community trusts and to ensuring that the trusts achieve their objective of delivering broad-based benefits for members of the host communities.
Following the signing of the agreement, Richards Bay Minerals has released more than R130-million to the community trusts established for each of the communities surrounding the mining and smelter operation.
In 2009, as part of its empowerment transaction, Richards Bay Minerals established community trusts for its four host communities to receive dividend payments for the purpose of supporting broad-based community upliftment, which Duvenhage described as a major milestone.
“The contribution Richards Bay Minerals makes to the communities through these funds will be put to achieving its intended purpose, which is to directly support local economic development in the communities.,” said Duvenhage, who expressed gratitude for the support and collaboration of the Amakhosi, provincial and national governments, and other stakeholders.
“With this agreement, all parties have come together to commit to long-term modernisation of the trusts for the benefit of the host communities.
“With the agreement in place, we believe that together with visible improvements on the safety and security front and support from the provincial and national governments and host communities, including reaching an earlier agreement with the Sokhulu Youth Forum, Richards Bay Minerals has made good progress on the core issues that have kept our business closed over the past several weeks.
“Through it all, we remained committed to restarting once the safety situation improves, and we will now begin the process to restart operations,” Duvenhage said.
Work is under way to reach full operational capacity as soon as possible.