Pallinghurst managing partner and co-founder Arne Frandsen.
Photo by: Creamer Media
JOHANNESBURG (miningweekly.com) – The unlisted Sedibelo Platinum in South Africa’s North West province is closer to finding a stock exchange listing date, says Pallinghurst managing partner and co-founder and Sedibelo chairperson Arne Frandsen, who is absolutely bullish about the prospects for platinum group metals (PGMs) in the medium to long term.
“Yes, at some stage we should be listed. Are we closer to finding a listing date? Yes, we are. Is the market better? Yes, it is. So, the ducks are quacking, I accept that. We’ll definitely look at it out of the notion that a listing will be something beneficial for the business and not just listing for listing’s sake,” Frandsen stated in a Zoom interview with Mining Weekly. (Also watch attached Creamer Media video.)
“I’m an ex-banker who feels that being listed is good, so, yes, there was a desire at one stage to be listed. But again, when markets were bad and platinum companies were trading at very low valuations, why would you be listed if you didn’t need the money? So, we slowed our pace and focused on being profitable, even at these very low platinum prices, and, yes, that’s not conventional. Typically, you’d like to be listed and all of that, but our shareholders are very patient,” said Frandsen. Among Sedibelo's key shareholders are the Bakgatla-Ba-Kgafela community and the State-owned Industrial Development Corporation (IDC).
Currently producing 150 000 oz/y, Sedibelo has the resources to double, treble or even quadruple that output. Through ten years of PGM permafrost, Sedibelo managed not to go to shareholders a single time and has remained debt-free. Now that it is growing muscles, it is expected to start flexing those muscles by producing more ounces.
In South Africa, Pallinghurst is invested in PGMs and manganese and, in Canada, it is invested in graphite and lithium battery materials. In Canada, it works with Investissement Québec in a similar fashion to the way it works with the IDC in South Africa.
On whether the Johannesburg Stock Exchange would likely feature as a stock exchange of choice should an initial public offering eventuate for Sedibelo, Frandsen retorted: “Guaranteed, it will be one of our listings, hundred per cent.”
Pallinghurst sees the demand for battery raw materials expanding in a manner not dissimilar to the steel raw materials super-cycle of a decade ago – and foresees PGMs following suit through fuel cell electric vehicles (FCEVs) and green hydrogen development. Driving battery electric vehicles (EVs) and FCEVs are increasingly stricter government regulations and consumer demand for green energy options.
In the global public sector, China, Germany, Japan, Korea and California have adopted far-reaching climate-mitigation measures, including PGM-boosting hydrogen strategies, while in the global private sector, several large automotive manufacturers have proclaimed their strong commitment to fuel cell production, the most vocal of these being Hyundai, which in a double-page advertisement in this week’s Economist shouts from the rooftops that it will be making 700 000 fuel cell stacks a year by 2030, nearly a third of which will go to trucks, shipping and even home appliances.
This is the comment of Hyundai fuel cell centre head Dr Saehoon Kim: "The driver of a FCEV can refuel quickly at a road-side station and this same fuel cell technology can also power heating systems, generators, machinery and heavy transport. As FCEVs become more common on city streets, the growing availability of green hydrogen will make them a reliably zero-emission option."
One kilogram of hydrogen powers a Hyundai Nexo crossover special utility vehicle (SUV) for 100 km compared with some crossover SUVs using nine litres of petrol to go the same distance.
Pallinghurst has committed $1-billion for investment and recently concluded financing transactions totalling C$20-million with Toronto Stock Exchange-Venture-listed Nouveau Monde, which is developing the Matawinie project in Saint-Michel-des-Saints to produce graphite, an input material for the EV and stationary energy storage industries, and is in the final sale and investor solicitation process under the supervision of the Superior Court of Quebec in its transaction with Nemaska Lithium.
Frandsen describes the Pallinghurst team as being active along the entire battery materials value chain, from spodumene all the way up lithium hydroxide, which goes directly into the battery for the storage of renewable energy.
“With Tesla being larger than all the auto makers combined in the world, life has changed, and I guess that after having put $2-billion of equity into the traditional mining sector, we decided three years ago to focus on EVs and battery and energy storage. We saw that as a great growth area. We pulled our people back from deals, took their suits off them, put polar-neck shirts and jeans on them, and sent them back to school, because life in battery materials is very different to iron-ore, manganese and copper, for that matter,” is how Frandsen explained it to Mining Weekly.
“It’s, I would say, more of a speciality than a commodity. The product that you’re developing is much more bespoke to the end-user. So, you have a different relationship with your customers than you do if you’re producing iron-ore or manganese. But it’s something that I find very intriguing. We have grown our team. We're now 35 people in London, South Africa and Canada. We’ve made investments into graphite and lithium, and we still hold manganese investments and platinum investments.
“If you look at battery materials and fuel cells, they are things that make the environment a better place. Our mines in Canada are 100% powered by hydro-generated electricity. Again, carbon footprint is at the forefront of most people’s mind. We’re beyond the discussion about whether it’s right or wrong or whether it’s an overreaction or whether global warming exists, and all of that. It’s reality and we all need to adapt to that reality.
“I had a meeting with senior people at Volkswagen and they focused my mind as well on this by saying, do you know that we have to pay fines in the EU of nearly €10-billion for our carbon footprint and for what our cars pollute and the carbon footprint that the materials we put into our cars have. So, it’s not only about doing the right thing, it’s also about doing the right thing financially,” Frandsen pointed out.
LARGE SEDIBELO PGM RESOURCE
Sedibelo operates on the western limb of the Bushveld Complex, where platinum and palladium account for around 63% and 27% respectively of the total four-element PGMs occurring in the reefs.
The markets for individual PGMs are separate and the volumes traded and prices achieved are independent of one another and currently palladium and rhodium prices are stealing the show.
Sedibelo was created in 2012 with the amalgamation of eight different companies and since then it has had an outstanding safety record. It has achieved more than five-million fatality-free shifts, has very low lost-time injury figures and a policy of zero tolerance when it comes to harm.
“We’re fully committed to South Africa. We're fully committed to PGMs. I think PGMs will have a renaissance and it’s not only palladium. It’s just an abnormality that palladium should be trading so much higher than platinum. I guess I’m getting tired of repeating that sentence but at some point in time, normality will set in and platinum will have its day in the sun again. What platinum can do for fuel cells and catalysts in diesel and petrol cars is just superior and I have no doubt that we will see a rebound of platinum prices,” said Frandsen.
Sedibelo is also a producer of iridium, a PGM used in polymer electrolyte membrane (PEM) electrolysis technology in which green hydrogen is produced. Goldman Sachs estimates that the addressable green hydrogen market could be worth $11.7-trillion by 2050, split between Asia, the US and Europe.
ADOPTION OF FUEL CELLS LIKELY TO DRIVE UP PLATINUM PRICE
Frandsen believes that the adoption of fuel cells will drive up the platinum price: “Some years back, fuel cells were running neck-to-neck with battery materials. Then battery materials, with our good Pretoria friend, Elon Musk, kind of took off, and in some way left fuel cells behind, because there are some drawbacks with fuel cells compared with batteries. But it is also vice versa. I don’t think that in a small car that drives 10 000 km a year that it makes sense to have a fuel cell but if you have buses, trains, things that start at the same time and the same place and return there in the evening, fuel cells make a lot of sense.
“So, I think, like we have diesel and petrol cars, I think we’ll have fuel cells and EVs. I think that it’s far too early to declare victory for batteries over fuel cells. I think there will be a role to play for both, and as you know, they don’t make platinum any more, and we’re sitting in the Bushveld Igneous Complex on 80% of the world’s platinum. So, I absolutely am very bullish in the medium-term and long-term about PGMs.
“We do around 150 000 oz a year right now, but that’s by design. That’s very important to understand. The problems that other mining companies have had with underground operations is that you can't just put the foot up and down on the pedal. You have an infrastructure that you need to support and it pretty much dictates how may ounces you take out.
“Being openpit, we could pace ourselves, and we’ve done so. Again, as I tell both my board and management team, the ounces in the ground are not turning sour and please remember they don't grow back like mushrooms. If I take out an ounce and sell it for $800, I’m not serving my shareholders because that’s too low a price,” said Frandsen.
On the stationary fuel cell front, the IDC and the Development Bank of Southern Africa last month committed funding to South Africa’s Mitochondria Energy to complete a bankable feasibility study into the design of a 250 kW stationary fuel cell energy system and to build a facility to manufacture the fuel cell units commercially.
INTRODUCTION OF KELL TECHNOLOGY
On the new Kell hydrometallurgical technology still being on the cards for Sedibelo, Frandsen stated: “Absolutely, and we have used the time to refine this further. The Kell technology remains superior to the conventional way of smelting and refining.”
As reported by Mining Weekly in 2017, Kell slashes electricity consumption by eliminating the power-guzzling smelting step in the processing of PGMs and also opens the way for full-spectrum platinum beneficiation, including the facilitation of fuel cell and autocatalytic converter manufacture. The process also preserves valuable cobalt, which current pyrometallurgy destroys.
Kell’s hydrometallurgical process leaches the PGMs out of the concentrate and removes the need to melt the concentrate at 1 600 oC, which Liddell Associates' Keith Liddell regards as using “the sledgehammer to crack the nut”.
Kell recovers 99%-plus of the platinum and 98% of the remaining PGMs, as well as the base metals.
Liddell patented Kell – the letters that make up his initials – as a smelting alternative in 1999 and has continued to finetune it ever since.
“It’s a completely different processing route,” Liddell told Mining Weekly back then. He first conceptualised it when, as a platinum junior in the 1990s, he was producing insufficient concentrate to justify investing in a smelter.
Kell consumes a mere 14% of the electricity that smelting consumes, 140 kWh of electricity for every ton of concentrate processed, compared with 1 000 kWh of electricity for every ton of concentrate smelted.
Kell requires no milling and emits only 440 kg of carbon dioxide (CO2) a ton of concentrate treated compared with 1 400 kg of CO2/t for the estimated two-million tons of concentrate treated in South Africa a year.
Kell also copes with the chromite in upper group two (UG2) reef, which smelting finds problematic.
Kell takes away the grade constraint the smelters have, which results in 5% more platinum being recovered in the flotation plant.
Kell makes use of standard pieces of off-the-shelf or out-of-the-catalogue equipment and because of its modularity, there is no need to sink large sums of capital into one big smelter ahead of time.
Moreover, the third stage of Kell is the first stage of the PGM-refining process, in which the PGMs are brought into solution.
Kell has the PGMs in solution and more parts can be added on depending on how much capital is being spent to facilitate the manufacture of items like autocatalysts or fuel cells.
“That’s the value of hydrometallurgy having everything in solution in a form that allows decisions on what products should be made from it. We’re talking about a possible Silicon Valley for platinum,” is Liddell’s view.
Kell has been in the testing, re-testing and super-testing for years, and the diligent research and development have now paid off.
The intellectual property and patent rights are in a Mauritius-registered company of four main shareholders, one of whom is the chemical brains behind the whole thing, Dr Mike Adams, who has a double PhD in chemistry and who worked with Liddell in the 1980s at South Africa’s State-owned minerals research organisation, Mintek.
After graduating from Birmingham University in 1981 with a degree in minerals engineering, Liddell joined Mintek and two weeks later found himself optimising flotation recovery at Western Platinum’s first UG2 concentrator in North West.
He carried on working primarily in the platinum sphere during his time at Mintek, eventually helping to design and build the Kroondal platinum mine in 1997.
It was then that he began conceptualising and then accelerating the development of Kell, which is ideal for juniors, who are paid only 80% of the value of concentrate by toll smelters.
Juniors who choose to make their own metal on site benefit from lower royalties and beneficiation credits and reduce the cash lockup of selling their concentrate to majors and waiting four months to be paid.
Kell appears to be robust for different minerallurgies as the many South African UG2, Merensky and Platreef concentrates and North American concentrates put to the test have all given a 99% platinum recovery.
Says Frandsen: “Again, on the theme of a greener world, we consume less than 18% of electricity in producing an ounce through Kell compared with the conventional way. I don’t think it’s the right thing for Eskom to build an extra generator in order to power smelters if there’s an alternative. Obviously, there’s a lot of vested interest in the existing smelting and refining structures because a lot of companies have spent billions investing into that, but for us we really believe that the Kell technology will prove itself and we for one are very committed to it and in the not too distant future, you’ll see us starting to build a Kell plant at Sedibelo,” Frandsen promised.
Sedibelo has developed Kell in partnership with the IDC, which Frandsen says has been a great supporter, “and we look very much forward to having an inclusive strategy for Kell so we will open it up for others to use as well”.
Mining Weekly: If you had to decide to put your foot on the accelerator production wise, what would be the potential output from Sediblo?
Frandsen: “The expansion we will have to continue with is in the area that we call Triple Crown. We’ve got four contiguous areas that hold more than 70-million ounces of resources. It’s a very large deposit and it’s at surface now and it has a very long strike.
“We have the flexibility to decide whether it is going to be 250 000 oz/y or 400 000 oz/y or 600 000 oz/y. That decision comes with a lot of capex and the long-term price expectations are very key in that respect. We’re finalising our analysis of that but we will soon make a call on what size we would like to pursue.”
Mining Weekly: Does the Sedibelo product basket include rhodium?
“We’ve got a lot of good rhodium and these days the price of rhodium is very nice. We’ve got iridium as well. We’ve got them all. It’s the typical western limb platinum basket. Obviously, right now palladium and rhodium are winning the day. But we can all remember back when platinum was the high price metal. You were proud when you got a platinum credit card. You didn’t get a palladium credit card, did you? And you were a South African Airways platinum holder, hey, and all of that. If you talk to a metallurgist the characteristics of platinum justify a premium,” says Frandsen.
Mining Weekly: Do you see manganese as a battery metal as well?
“Well, you use 95% for steel and 5% for others and you name yourself after the 5%. But there is, for sure, a role to be played by manganese and especially a specialised grade of manganese. So yes, South Africa is very well positioned to benefit from that and, as you know, we still have an investment in Tshipi manganese mine and Jupiter Mines – a very good investment – and we think that South Africa has a lot of benefits when it comes to manganese,” Frandsen enthused.
GREEN HYDROGEN OUTLOOK
In Southern Africa, a German-funded project to develop a green hydrogen atlas across Southern Africa is integrating the Southern African Development Community (SADC) region ahead of the projected opening up of the multitrillion-dollar market going into the future.
Funded €5.7-million by the Germany Federal Ministry of Education and Research, the Green Hydrogen Atlas-Africa project is also placing the region on the road to contributing meaningfully to global Sustainable Development Goals.
Southern African Science Service Centre for Climate Change and Adaptive Land Management (Sasscal), which has been turned into Southern Africa’s implementation organisation for the promotion of the Paris Agreement and the reduction of greenhouse gas emissions, is looking with conviction to the day when green hydrogen is in widespread use across SADC countries and the world as part of the global fight against climate change. Sasscol is committed to the successful implementation of this project in 11 SADC countries.
“We’re moving really fast,” Sasscal executive director Dr Jane Olwoch commented to Engineering News & Mining Weekly in a Zoom interview last month, in which she described the green hydrogen atlas project as the starting point of a process to firm up data and validate green hydrogen sweet spots. This is expected to be followed by the building of a pilot plant that is able to demonstrate the competitiveness of Southern African green hydrogen generation ahead of commercialisation.
“The green hydrogen export market potential is much larger than the local green electricity market,” CSIR green hydrogen researcher Thomas Roos stated in the Hydrogen, Fuel Cells & the Green Economy feature in last month’s Engineering News & Mining Weekly.
“Renewable projects built for hydrogen production might even be a way for South Africa to subsidise the strengthening of its physical transmission grid, reducing the cost to the fiscus or existing electricity consumers,” Roos added.
In the same feature, HySA Infrastructure’s Dr Dmitri Bessarabov stated: “Water electrolysis can be used to produce hydrogen gas on a large scale. This hydrogen can be stored in different forms and subsequently used in various sectors.”
HySA Infrastructure is leading research and development efforts in South Africa in water electrolysis, based on PEM electrolysis technology, in which deionised water is spilt into hydrogen and oxygen on the application of an electric current.
Oxygen and protons are generated at the anode that contains iridium-based electrocatalyst. At the cathode, the protons that pass through the PEM are reduced by electrons to form hydrogen gas at a platinum-based electrocatalyst.
“Given the fact that the global water volume is estimated to be around 1.4 × 109 km3, hydrogen could be seen as an almost everlasting resource,” Bessarabov added.