Junior iron-ore miner Manngwe Mining plans to expand its asset base and increase production at its existing operation over the next five years to provide integrated steel and mining company ArcelorMittal South Africa (AMSA) with between four- million tons and five-million tons of iron-ore a year.

Speaking at the official opening of the company’s Assen iron-ore mine, near Brits, in the North West, last month, CEO Matodzi Nesongozwi said that, as a “proudly emerging black-owned and -run mining company”, Manngwe intended to grow its business by consolidating the nearby fragmented Limpopo iron-ore deposits and by targeting the domestic steel market.

“It will be fulfilling if we can contribute to the country’s economy by bringing down the cost of steel production and thus help the infrastructure development of the country in terms of the National Development Plan,” he stated.

The mine and dense-media-separation (DMS) plant was developed at a cost of R180-million and will initially target production of 60 000 t/m of saleable ore for delivery exclusively to AMSA.

The mine has a measured resource of around 20-million tons, with Phase 1 of the mine’s development focusing on mining detrital ore for an estimated three years, while finalising a feasibility study for exploiting the main orebody of high-quality hematite, calcitic and banded iron-ores located in the mountainous area, for an estimated 12-year mine life.

Assen currently employs about 220 people on site, including the contractors that installed the R120-million DMS plant without any reported injury or fatality.

Nesongozwi pointed out that about half of the workforce are from local villages, with workers trained on site to operate plant and machinery.

Further, he praised South Africa’s biggest iron-ore mining company, Kumba Iron Ore, for being very supportive when Manngwe acquired the prospecting right and also thanked the Anglo American Sefa Mining Fund for injecting the “much needed funding” during the early exploration stage of around R40-million in loans and investment.

“AMSA believed in us to the extent that we not only negotiated a market-related offtake agreement but it also provided much-needed technical assistance during the construction period,” Nesongozwi commented.

He also highlighted that mining project house DRA built the turnkey DMS plant and provided project financing for the plant on a build-own-operate-transfer basis. Outsourced plant operations and maintenance specialist Minopex, a member of DRA Group, operates the DMS plant. The plant can process 160 t/h of ore and can produce 60 000 t/m of iron-ore.

Nesongozwi remarked that AMSA would buy the iron-ore produced at the mine for its steel plant in Vanderbijlpark, in the south of Gauteng. The company is currently trucking its product to AMSA’s plant, but is in discussions with State-owned freight and logistics group Transnet about developing a new siding or refurbishing an existing old, unused one to transport the iron-ore to AMSA. “This would substantially reduce our logistics costs,” Nesongozwi noted.

He further highlighted that the “close proximity” of the mine to Vanderbijlpark, in comparison to those iron-ore mines located in the Northern Cape, provided the company with a competitive advantage in the domestic market, which, in turn, opened up opportunities for AMSA’s main suppliers to export more iron-ore from the Northern Cape.

Nesongozwi revealed to Mining Weekly on the sidelines of the event that the mine’s all-in sustaining costs were $35/t and that he believed this low-cost operating model put the mine in “good stead” to weather any price volatilities. He added that the company expected to ensure a full return on its initial investment in the next 13 months.

Also in attendance were DRA MD Neale Goddard, AMSA CEO Wim de Klerk, Manngwe chairperson Mathatha Tsedu and representative for the local communities Stalin Dzivhani.

De Klerk told the guests that AMSA was committed to supporting Assen and to partnering with Manngwe on its future expansion plans.

“Manngwe has in a short time developed a very professional outfit that is supplying us with a quality product at the lowest costs of all our suppliers. AMSA’s investment in the company forms part of our ongoing commitment to supporting black-owned businesses and one which will, hopefully, ultimately transform the landscape of the South African business sector and mining in particular,” he stated.

Concurring with De Klerk, Goddard highlighted the company’s “impressive achievements” in establishing the mine, adding that DRA was also proud that it was partnering with Manngwe on the project.

Meanwhile, Tsedu said that, as part of Manngwe’s corporate social responsibilities, the company, in partnership with its social partners, intended to construct a secondary school in the area for the learners living in the villages of Ga-Rasai and Kwarriekraal, as, currently, learners had to travel great distances to attend school and, therefore, had to leave very early and returned very late. He lamented that this situation was not conducive to academic excellence, as the learners often arrived at school exhausted and were unable to function optimally.

Tsedu added that the company would also be providing a number tertiary of education bursaries for local learners.

Additionally, Dzivhani commented that the local communities were “deeply grateful” to Manngwe for establishing the mine, as it provided much-needed jobs in an area with “extremely high” unemployment rates.

“The mine has been a blessing for the community and, while it understandably cannot provide jobs for everyone, the economic improvement in the area has been noticeable. Assen has also assisted in supplying water to the villages and improving our social conditions generally – for this, the communities are very appreciative,” he stated.