SA investment in DRC opencast operations

The Democratic Republic of Congo (DRC) is potentially one of the richest mining countries in Africa, based on its vast copper, cobalt and diamond resources, says mining equipment manufacturer VR Steel, which extended its services to the country last year.

VR Steel MD John van Reenen tells Mining Weekly that the company started supplying opencast mining equipment to global diversified natural resources company GlencoreXstrata subsidiary Katanga Mining’s DRC copper and cobalt project in the second quarter of 2013.

The contract comprises two orders to date, totalling about R7-million.

“It seems that the DRC has huge growth potential for the opencast mining sector and, therefore, for VR Steel,” he says.

Van Reenen predicts that VR Steel will supply GlencoreXstrata and other miners in the area with more products in the future. He highlights that the south of the DRC has an abundance of mines, adding that VR Steel recently began supplying equipment to one of the mines in the area.

“Hopefully, as VR Steel becomes known in the area, more mines will use VR Steel products,” he says.

Challenges
Van Reenen highlights logistics as one of the major problems facing VR Steel in supplying equipment to the Katanga project, owing to the mine sites often being located in remote areas without adequate road infrastructure.

“Transporting products is difficult, as they need to be transported in parts and then reassembled on site. “Further, skilled staff such as welders are needed in the DRC to assemble the products,” he says, adding that this process can also be quite time consuming.

Meanwhile, Van Reenen also highlights that mining companies in South Africa are hesitant to spend money, owing to ongoing strike activity, which has resulted in mines losing a significant amount of money in operations.

“While mining companies are holding back on spending because commodity prices are dropping, a lot of companies are also awaiting the outcome of the platinum strike negotiations, during which the final settlement figures will be determined.”

He adds that, should the platinum mines concede as much as 10% to the mineworkers’ wage increase demands, other commodity mines can expect similar demands from their own staff, thereby potentially causing financial problems throughout the entire mining sector.

Technology
Van Reenen highlights that VR Steel’s key differentiator is its wealth of engineering expertise. “We have a group of engineers who are world leaders in their field,” he says, adding that the company’s engineers have received praise from other international engineers who attended the MinExpo Mining Show in Las Vegas, US, in 2012.

Van Reenen notes that the company is continuously upgrading its software to ensure it remains at the cutting edge of engineering technology. “We constantly compare our standards with international standards as a means of keeping up to date.”

He tells Mining Weekly that a German software supplier to the company has highlighted VR Steel as a success story and an advertising platform to promote its services to other mining companies.

Van Reenen further mentions that South Africa ranks among the top in the world when it comes to innovative design in the mining sector. “South Africa sits highly among the world’s best. Our defence industry saw the development of many highly trained engineers, who have since transferred their skills into other sectors, such as mining and machinery.”

He also highlights South Africa’s significant technology base, describing it as “more than the size of the country justifies”.

Moreover, Van Reenen is positive about the number of students aiming to pursue a career in engineering. “With the South African government’s focus on maths and science in schools, many students are regarding these two subjects as vital and key to being accepted at universitiy.”

He adds that VR Steel supports its staff who want to complete their honours, master’s or doctoral degrees. “We currently have one staff member completing a doctorate, for which the company is paying,” says Van Reenen, further highlighting that the company offers bursaries to several students at local universities, including the University of the Witwatersrand.

Growth Potential
Van Reenen says the opencast mining industry in South Africa is fairly stagnant, while other parts of Africa are showing greater growth potential in the sector.

“Namibia, Mozambique, Zambia and the DRC are showing great mining potential, with VR Steel concentrating on Zambia and the DRC,” says Van Reenen.

He also highlights Botswana as showing growth potential, owing to its diamond and coal resources. “We expect that Botswana will become a big player in the mining industry in the next ten years,” says Van Reenen.

About VR Steel
VR Steel started doing business in 1992 as a specialist steel distributor and service centre. The company produced the world’s first fabricated dragline bucket in 1994.

The VR dragline bucket was launched in 2004, which was followed in 2006 by the VR rope shovel dipper and in 2007 by the VR hydraulic shovel bucket, the VR excavator bucket and the VR off-highway truck body.

VR Steel is the only company in the world that designs, manufactures, sells and repairs all loading tools and truck bodies. By operating a maintenance workshop, the company has first-hand knowledge of the types of repairs that are frequently required. These problems are handed to the design engineering department to eliminate or reduce these problems, giving products a longer life.

Products are manufactured at the company’s 12 000 m2 factory, in Alberton. The company also has a factory in Middelburg, where maintenance on dragline buckets is performed, and is considering opening regional workshops throughout the country.

Van Reenen tells Mining Weekly that the VR Steel truck bodies currently show the most success in the market, as they are designed to decrease cost and optimise performance, thereby enabling mining companies to produce at the lowest possible operating cost per ton.