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South African zinc industry buoyed by ongoing developments

18th August 2017

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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The South African zinc industry may be under pressure, but there are numerous developments under way that are strengthening the sector, suggests International Zinc Association of South Africa regional director Rob White.

He says the depressed state of the local zinc market is a result of the metal’s reliance on the steel industry, which has been widely reported as experiencing tough operating conditions in South Africa.

Challenges are also posed by a stagnant local economy, which White points out, while not unique to the zinc industry, is counterproductive.

However, he is still optimistic regarding the outlook for zinc and posits that the South African market will turn around in the coming years. White also expects the continued rapid economic growth in sub-Saharan Africa to provide opportunities for South African business growth as experienced during the early 2000s.

Local Developments

He notes that, in Africa, South Africa is the predominant market for zinc. However, despite the high demand from the country, since 2012, all zinc metal has been imported, with South America and South-East Asia providing the bulk of supply.

White informs Mining Weekly that, while South Africa does import from Namibia, and that some may argue that this is akin to local supply, several agreements between the countries have precluded Namibia from supplying South Africa’s total zinc demand.

This presents opportunities for producers from other countries to supply the South African market. White cautions that, while in theory, this may not be a bad thing, it can hamper focused market development and growth because these producers are purely price driven and not committed to providing long-term support should it not be to their financial benefit.

Further, they lack an understanding of the local market, because it is not compatible with the nature of their “opportunistic” zinc sales.

White, therefore, emphasises the importance of a local zinc supply for South African consumption, highlighting the development of JSE-listed Vedanta Zinc International’s Gamsberg zinc reserve, in the Northern Cape, as the country’s biggest hope in this regard.

This project is progressing swiftly, says White, with Vedanta expecting to start producing zinc concentrate in 2018. If this transpires, South Africa will become a major global zinc concentrate supplier. “It will be interesting to see if, eventually, zinc is again produced in South Africa as the Gamsberg development matures.”

Moreover, there is the possible redevelopment of the Prieska copper mine, in the Northern Cape. The mine produced copious amounts of copper and zinc in its lifetime until its closure in the 1990s. Australian minerals explorer Orion Minerals acquired the project this year and exploration is under way, according to the company.

Regional Developments
Other noteworthy zinc developments in sub-Saharan African countries are Vedanta Pit 112 complex and mining company Skorpion’s Gergarub mine development, both in Namibia.

In the Democratic Republic of Congo (DRC), a major upgrading programme is under way at the past-producing, Kipushi high-grade copper and zinc mine, owned by Canadian project developer Ivanhoe Mines’ (68%) joint venture with the DRC State-owned mining company Gécamines (32%).

White also highlights exploratory studies being undertaken by metals mining company Mount Burgess Mining on the oxide deposits at the Kihabe-Nxuu base metals project, in Western Ngamiland, Botswana; and by exploration and development company North River Resources on the Namib lead-zinc project, in Namibia.

White notes that it is encouraging that these local and regional developments are under way, especially, given that this year has seen global zinc production largely in deficit, as these will secure local zinc supply well into 2020.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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