JOHANNESBURG (miningweekly.com) – New Kumba Iron Ore CEO Mpumi Zikalala this week gave a firm thumbs up to South Africa’s biggest iron-ore mining and marketing company continuing to invest in mineral exploration in the Northern Cape, which she described as being highly prospective.

The Johannesburg-listed Anglo American group company has spent R1.5-billion on high potential targets in the last ten years to good effect. Kumba has, over the last eight years, been exploring in the Northern Cape, where it has identified anomalies and targets that have become a great focus for the company as potential sources for other new mining developments. (Also watch attached Creamer Media video.)

“One of the projects that we are currently executing is the Kapstevel South project,” Zikalala told Mining Weekly in a Zoom interview.

The R7-billion Kapstevel South development at the Kolomela mine is currently 35% complete, “and we do have a good set of project people executing this project” added Zikalala. It is on track to produce its first iron-ore in the second half of next year.

In the wings awaiting potential developmental go-ahead are Ploegfontein, which is at prefeasibility stage, and Heuningkranz, where conceptual work is being finalised.

“We’ll continue looking to find additional areas,” said the former De Beers Group Managed Operations MD.

In the wide-ranging interview, Zikalala also expressed excitement about Kumba’s:

• ultrahigh dense media separation (UHDMS) plant at the Sishen mine, for which site establishment will take place in the first half of this year.
• the awarding of a R1.6-billion mining contract to a community based joint venture to contract mine iron-ore – a core-business activity – at the Kolomela mine;
• supply of large volumes of fresh water to local authorities for local communities; and
• promising collaborative and open engagement with Transnet and the port authorities.

Mining Weekly: Kumba is building a UHDMS plant that will turn waste into saleable product. Could this be a game changer?

Zikalala: Definitely, it’s a real game changer for us. Firstly, what would have been declared waste will be classified as reserves going forward. From 150-million tonnes of waste, we'll be able to produce 50-million tonnes of saleable ore, which is wonderful. If you think about it, it will reduce our strip ratio, and with that, it will also assist with the reduction of our unit costs. The other critical aspect is that it will improve the quality of our product. UHDMS has a higher density cut point, which will assist us with producing more premium products, and that essentially will move us up from 18% to 50%, and through that, we'll be able to provide better quality product to our customers. All in all, a real game changer, and we're excited about this project.

When will you see this happening, when does it come into full effect?

We have essentially started mobilising site from a UHDMS perspective. Because we are integrating this to our current plant, the final handover will be in the first half of 2024. Post that, we will be fully in the space where we'll be producing via the UHDMS. 2023 will have the full benefit of the UHDMS. This is wonderful technology, and we'll continue looking at further opportunities going forward. It would make no sense for us not to consider this going forward.

Please expand on the mining joint venture that has been established with the local community.

Normally mining companies would talk about enterprise development and supplier development opportunities when it comes to local community involvement and last year Kumba spent R4.1-billion with businesses that are located within our communities. But the joint venture that you are referring to is another critical one for us and involves the awarding of a mining contract to local community, a core business mining contract to a local joint venture. That's essentially a R1.6-billion contract. This is around our Kolomela mine, and that joint venture is made up of community members. Again, what's exciting for us is the fact that the ownership of that business has a high percentage of women and youth. Where this is critical for us is that it’s about assisting our local communities with regards to them growing their businesses and clearly providing services to us. We will be providing technical support to this group. In the future, we'd also like to see them growing beyond our space, and looking to contract mining for other companies, and we will be working very closely with them to ensure that they are successful in this space. They will serve as contract miners for Kumba.

The Northern Cape is a water-stressed area. Tell us about the 17-billion litres of water that Kumba supplies to local authorities.

As part of our mining activities, we pump from our various sites 24-billion litres of water. Of this, 17-billion litres, or 70% of the water we pump, is supplied to our local municipality. This is critical, because if you think about it, we operate within a water stressed area, so the provision of this water is extremely helpful to the community. We utilise the difference – the 7-billion litres. Going forward, we have the massive goal of wanting to reduce our own usage by 50% by 2030. Again, this will add more value, because it means that the water we won't be using will be diverted to our local communities. We are very passionate about this area and it's one of the elements that we focus on, because we want to add value to our local communities.

Where do you get your water, and do you sell it to the local authorities who then on-sell it to communities?

As you mine deeper, you gain access to groundwater. That's the water that we are talking about. We have to pump it out as part of our mining activities. We don't sell it to the municipalities. However, they then sell it to the users and if you think about that, it's actually very helpful to the local municipality as an income and they can use that to further develop our communities.

What gives you confidence that Transnet and the port authorities will provide the efficient logistics that are so important to Kumba?

If you think about it, Transnet is part of our value chain. What gives us the confidence first and foremost is the partnership that we have with them. When you have a partner, you are talking about somebody that you can meet with and that you can have open and honest discussions with, and somebody that you can also collaborate with. I've been in the role for six weeks now. We've had a couple of discussions with Transnet, and they are very open with us around their challenges, and we can therefore collaborate with them on the key things that they're working on. Another element is that Transnet has been undergoing major shutdowns, it's a three-year cycle with the last year of that cycle being this year. Post doing this, they will then be looking at their normal shutdowns and not their longer shutdowns, and that will give us more time to operate. They've also been very open with us around things that we can do as well – and there are things that we can do, so we are moving to utilising larger vessels, simply because that prevents starting and stopping, and we are also working together with them around enhancing what we call direct loading, where you don't move material on to stockpiles, and then pick it up and load the vessels. If you can do direct loading, that improves the time that you have insofar as the bulk of the infrastructure is concerned. In the longer term, they are also executing another project, which is critical to our business – that’s Tippler 3. These are things that give us confidence in the partnership that we have with Transnet. Does that mean that there are no challenges? No, that's not what we are saying. What we are saying is that there's a good understanding of the challenges and openness for us to collaborate going forward.