It has been many years for the reason that reopening of the Western Cape’s Steenkampskraal uncommon earth mine was first talked about – across the time when touchscreens began to look in mobile telephones and tablets. New stories would floor each few years concerning the wealthy ore physique containing hundreds of tons of uncommon earth minerals – the very best grade uncommon earth mine on this planet.
Curiosity in Steenkampskraal elevated after China severely restricted the export of uncommon earth minerals in 2009. It appeared to disregard a 2014 ruling by the World Commerce Organisation (WTO) to not refuse provide to the remainder of the world.
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Along with being uncommon, the 17 uncommon earth parts are of strategic significance in communication and army purposes.
Lately uncommon earth metals have grow to be important in inexperienced vitality purposes, particularly for the manufacturing of high-tech magnets utilized in wind generators and parts for electrical automobiles.
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Certainly, issues look optimistic for Steenkampskraal, elevating the query whether or not the newly appointed administration group will have the ability to get the mine going once more.
New management
“The timing is correct to proceed now,” Mitford Mundell tells Moneyweb. He was lately appointed CEO of Steenkampskraal Holdings Restricted.
“We’ve all of the licences in place, an skilled government group, and uncommon earth costs have sustained increased ranges over the previous couple of years, easing buyers’ fears over worth volatility.”
Revered SA mining veteran Bernard Swanepoel, former CEO of Concord Gold, has been appointed chair.
“The mine had solely operated for a decade till 1962 – by Anglo American, mining thorium,” says Mundell.
“At the moment uncommon earths have been of little curiosity. Steenkampskraal is the world’s highest-grade thorium mine. Nice Western Minerals Group ran the corporate between 2010 and 2015 and did intensive useful resource improvement and challenge improvement work, however by no means reopened the mine.
“The standard of the asset, superior brownfield nature – with R1 billion invested thus far – and optimistic market outlook for mineral costs, underlies the arrogance in efficiently opening the mine. The mine-build group with profitable observe data will execute the challenge and function the mine.”
Mundell says the corporate has all of the regulatory approvals required to begin mining and produce monazite focus, blended uncommon earth focus, and separated uncommon earth oxides.
A succession of managers and stakeholders have acknowledged that the Steenkampskraal monazite mine is without doubt one of the finest deposits on this planet, with an exceptionally excessive grade of uncommon earths.
When Anglo American mined Steenkampskraal from 1952 to 1963, 126 280 tons of ore produced 59 555 tons of monazite focus, containing 26 201 tons of uncommon earths at a mean grade of 20.7%.
Mundell says the ore physique comprises sufficient minerals to function the mine at a manufacturing price of no less than 2 700 tonnes of whole uncommon earth oxides each year, for greater than 20 years.
“The useful resource is open at depth and a brownfield exploration programme is anticipated to extend reserves additional.
“Neodymium, praseodymium, dysprosium, and terbium are important to fight international warming and local weather change. These 4 uncommon earths are used to make magnets utilized in electrical motors and wind generators,” he says. These metals are all discovered on the mine.
“The overall grade at Steenkampskraal of those 4 uncommon earths is 3.49%, which is increased than the entire uncommon earth grades of most different uncommon earth tasks, and characterize about 92% of the worth of Steenkampskraal’s uncommon earths basket,” says Mundell.
There are only some different important uncommon earth mines outdoors of China. A mine in Canada has been working for a very long time, and a brand new however low-grade deposit was present in Alaska.
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Efforts are additionally underway to reopen an outdated mine in Australia, in addition to creating different deposits.
Current infrastructure
Steenkampskraal has a bonus in that the mine has well-developed infrastructure from the time Anglo American operated it, in addition to that added by Nice Western between 2010 and 2015. The latter spent R500 million on infrastructure and useful resource improvement.
“The underground infrastructure is in good situation, however requires some refurbishment. Floor situations are excellent and entry to underground workings by way of an inclined shaft can be in good situation,” says Mundell.
“Solely restricted work is required to return to manufacturing,” he provides.
He says that whereas no mining has been performed for the reason that early Sixties, trial mining wouldn’t be crucial because the mining strategies are confirmed, particularly in such good floor situations. Intensive take a look at work has been performed on bulk rock samples to beneficiate the monazite.
The great situation of the mine’s infrastructure means that it’ll require relative low capital expenditure to deliver the mine again into manufacturing. A phased method will additional restrict the necessity for upfront capital.
The primary section contains the manufacturing and sale of monazite focus; the second the manufacturing and sale of blended uncommon earths carbonate; and the third section the manufacturing and sale of separated uncommon earth oxides.
“The primary section requires a brand new monazite focus plant,” says Mundell. “Because of the excessive grade of the orebody, required manufacturing volumes are low. The mixture of the small infrastructure dimension and present infrastructure lead to [a] low capital [requirement] of between $15 million and $20 million.”
Feasibility examine
Administration is within the means of elevating R35 million to fee a definitive feasibility examine (DFS) for Section 1, and to fund working capital for 2023.
The examine will construct on earlier work and embody updating the mineral reserve estimate, detailed mine design, and additional metallurgical take a look at work and course of plant design in direction of the second section.
It should additionally incorporate up to date capital and working prices and mirror the latest market outlook and product costs, in accordance with the newest stories from Steenkampskraal.
“With the DFS in hand, we’ll begin elevating capital to reopen the mine in 2024,” says Mundell.
An acceptable capital construction of debt and fairness shall be determined at that stage, with administration noting that the mixture of very excessive grades, shallow mining depths and present underground improvement will guarantee a brief payback interval and allow Steenkampskraal to be one of many lowest-cost uncommon earth producers on this planet.
Relying on the optimisation work to be performed for the DFS, the estimated output shall be about 10 000 tons of monazite focus each year.
The mine will create 100 to 200 new jobs within the thinly populated communities round Vanrhynsdorp, close to Vredendal.
Swanepoel says Steenkampskraal is certainly one of South Africa’s most respected strategic mining sources.
“The potential is gigantic. As soon as in manufacturing, it’s going to place SA as one of some different sources to China for the availability of uncommon earths, particularly these utilized in electrical motors and inexperienced know-how. These uncommon earths are experiencing important progress in demand and resultant excessive costs.”
Traders ought to watch this progress – administration hinted {that a} itemizing is perhaps thought of when the mine is able to begin producing once more.
