The appointment of mining stalwart Sipho Nkosi to cut red tape is crucial to encourage new investment and expand existing investment in South Africa, says Menar MD Vuslat Bayoglu, whose private investment company has about R1.5-billion worth of investment being delayed by regulatory processes.

While Nkosi was appointed to reduce government red tape in general, Bayoglu believes that his background and skill would be better used in the mining regulatory space.

“There are huge bottlenecks in mining approval processes, from prospecting rights, where it is relatively easy, to water use licences (WULs) and environmental authorisation, where things get harder,” said Bayoglu in a Zoom interview with Engineering News & Mining Weekly.

“Often, different government entities contradict each other. Some NGOs take advantage of the red tape to block mining investment. They don’t care about the taxes that the State is losing when it delays mining investments. They exploit this to their own advantage and to the detriment of the country,” said Bayolu, who pointed to Minerals Council South Africa’s members having R90-billion worth of ready-to-execute projects being stalled by red tape.

“South Africa cannot afford to lose out on the current upswing in the commodity market. It is only during such times that investors have appetite to expand existing operations and develop new mines from scratch.

“If we don’t take advantage of this now by cutting the red tape, we should kiss goodbye to employment creation and the prospect of reducing poverty and inequalities – all of which are the key priorities of President Cyril Ramaphosa’s administration. The President clearly knows this. We hope various departments will support him,” said Bayoglu.

His second takeaway from this year’s State of the Nation Address (Sona) is that reforms are under way in the field of logistics. “Allowing third-party access to the rail infrastructure is key to solving the logistics bottlenecks. While Transnet has performed better than many SOEs over the years, it has experienced challenges lately and this has impacted on mining exports. So, the President’s initiatives, which Transnet has already embraced, are also a welcome development,” Bayoglu added.

His third Sona takeaway was the President firmly stating that business is responsible for creating jobs and government should create an enabling environment.

Growth Strategy

Menar’s latest growth strategy development includes the commencement of mining at Kangra Coal’s Udumo mine in February, marking the beginning of the extension of the life-of-mine (LoM) at Kangra, through the mining of the Kusipongo reserve of around 41.9-million tons, which could extend the LoM by more than 20 years.

Kangra is targeting a production rate of 1.5-million tons a year from the underground mining sections for the duration of the LoM, with 360 000 t/y of anthracite being produced from available opencast areas. Located in Saul Mkhizeville, Mpumalanga, Kangra employs 549 people, including contractors. The extension of the LoM of Kangra is described as being critical for local communities that derive employment and business opportunities from the mine.

In addition, negotiations are continuing with stakeholders at Canyon Coal’s fully licensed but yet-to-be-developed Gugulethu colliery, which will create 430 jobs. Through Canyon, some R600-million is being invested in the Phase 1 development of Gugulethu, which is near Hendrina, also in Mpumalanga. The project has an estimated LoM of more than 35 years based on a run-of-mine (RoM) production of about 200 000 t/m from opencast areas and 150 000 t/m from underground sections. Mining will take place through underground and opencast methods. Phase 1, which will entail opencast mining, has a reserve of 14.3-million tons, while Phase 2 will add an underground component. Phase 1 consists of three pits, one of which has been designed with the specific purpose of gaining access to the underground reserve.

Canyon’s Bekezela is awaiting a long-overdue WUL. Menar is hoping that the Bekezela mine will benefit from government’s plan to cut red tape. The project is awaiting to employ 320 directly, with the overall economic activity in the area generating additional jobs. Located in Springs, Gauteng, Bekezela will be an opencast mine, with a target RoM production of 600 000 t a month, once in steady-state production, and a scheduled LoM of 22 years. The project’scapital requirement is in the region of R1.5-billion.

Good news is that operations are scheduled to begin soon at Mngeni shaft, a fully licensed 1.2-million-ton resource. The project, which will use the drill-and-blast mining method, has an anticipated four-year mine life.

Despite community and labour relations challenges, East Manganese, the group’s first manganese operation in the Northern Cape, is producing, with products including 85% lumpy manganese ore and 15% fine material. The mine employs 80 people, with the majority coming from the local community.

“We are continuing to explore other sizeable manganese opportunities in the Northern Cape. We hope that we will have something tangible to talk about sometime next year,” said Bayoglu.

Meanwhile, a potential partnership is being looked at for the restarting of the Çaldag nickel/cobalt project, in Turkey, which is located in Turgutlu town of Manisa city, and which is on care and maintenance.

Viable copper/cobalt projects are also being studied in the Democratic Republic of Congo, where partners are assisting the company to invest in what are seen as promising prospects.

Going well is Menar’s gold exploration in Kyrgyzstan, the Saraysay gold project, in the Tien Shan Gold Belt. Exploration by Northern has to date recorded strong soil gold anomalies, with 10 000 m of drilling planned in 2022 and exploration completion expected by 2024.