Chinese Poised to Boost Stake
13 May 2012
He said Jinchuan will try to assist Wesizwe to reduce these costs and construction times through innovation and reviewing aspects such as mine design, transportation, ventilation and crushing, as well as possibly bringing in some mining engineers from China on a temporary basis.
"In China the equipment and people never stop working and mines run 24/7. This is not the case in South Africa.
"But I have worked in different mining regions and find that South Africa is a well-established and mature mining region compared to other parts of the world," says Gao.
Bakubung is located in the Bushveld Complex and will produce around 350000 ounces a year by 2023. Jinchuan will have first option to buy the platinum produced from the mine.
Jinchuan outbid Brazil's Vale for Metorex, a South African company that also has operations in Zambia and the Democratic Republic of Congo. Metorex mines copper and cobalt - industrial minerals which are experiencing rising demand from China.
Gao believes there will be a stronger drive from Chinese companies to enter the South African mining space owing to its good resources base. He added that the governments of both countries are pushing for increased collaboration.
Meanwhile, Hong Kong-based Asian Minerals Limited (AML) has announced plans to produce 20% of world manganese, mainly used in the production of steel, from a mine in the Northern Cape.
AML currently holds a 49% stake in the Kudumane manganese mine project that will produce 1.25million tons of manganese during its first full year of production.
Newly appointed CEO Sechaba Letaba said the mine could start mining within the next four months if all goes according to plan. The mine hopes to ramp up production to 2.5million tons a year within seven years. He added that offtake agreements for the first two million tons a year of production were already in place, noting that most of the ore will be exported to Asian markets. "We have the minerals and Asia has the markets. It does not matter who we sell to as long as it helps to enrich the South African economy," he said.
Gold One CEO Neal Froneman recently also shook hands with the Chinese, giving them an 89% stake in Gold One, the company he founded.
The company currently sells its gold on the open market, but Gold One investor relations vice-president Grant Stuart saied there may be opportunities to enter into agreements with the Chinese for future uranium production. "Gold One's partnership with the Chinese consortium has positioned the company as an active participant in the consolidation of the African and the global gold mining industry," said Stuart.
Gold One intends to list on the Hong Kong stock exchange early next year.