Junior iron-ore miner outlines ambitious aims, supports local steel production

BRITS (miningweekly.com) – 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 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, on Wednesday, CEO Matodzi Nesongozwi said that, as a “proudly emerging black-owned and -run mining company”, Manngwe intended to grow its business by extending into Limpopo and by targeting the domestic 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 is 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 a total of R40-million in loans and investment.

“AMSA believed in us to such an extent the 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, which built the turnkey DMS plant, provided project finance for the plant on a build-own-operate-transfer basis.

Nesongozwi remarked that AMSA would buy the iron-ore produced at the mine for its steel plant in Vanderbijlpark, in the south of the Gauteng.

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 Online 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 full return on its initial investment in the course of the next 13 months.