Wesizwe platinum's new mine "smell"
21 April 2012
The smell of a new car is special, filled with the promise of adventure and forward motion, it is something to savour whilst it lingers. Walking onto Wesizwe Platinum's Bakubung mine site Thursday, this journalist could help notice a similar smell.
A "new mine" smell wafted from the freshly laid cement and the shiny offices while newly broken ground and a lattice work of steel reinforcing gave a sense of future growth that is in stark contrast to the mine closures and general gloominess surrounding the platinum industry at the moment.
Bakubung, previously known as the Frischgewaagd-Ledig mine, is in the centre of the platinum rich Western Limb, of South Africa's Bushveld Igneous Complex, just south of gambling playground, Sun City, and right next door to the Royal Bafokeng Platinum's Styldrift project whose new head gear is easily visible.
Plans are to build a mine that will deliver 350koz of PGMs per annum for 35 years from what is a relatively shallow (850m), flat dipping reef. The 1.4 to 1.7m thick reef widths are expected to yield 5.1g/t of PGMs from the combined resource of 82mt. The Merensky reef will dominate production for the first 18 years Wesizwe said.
With the first blast occurring in April of last year, the project's official start date is 4 July 2011. As at 17 February 2012 the project had achieved 500 lost time injury frequency free days. No doubt the exceptional housekeeping that made for a neat construction site has had something to do with this. TWP projects are the contractors controlling the site.
The bill of quantities from June 2010, presented by project executive, Jacob Mothomogolo, indicates that over 2.5m litres of water, 970 tons of reinforcing steel and over 5000 square metres of concrete has gone into the construction process thus far.
Mothomogolo said "the civil earthworks are almost complete, the concrete scopes and the expansion of the mine terrace are well underway. On top of this the construction of a second pollution control dam has been completed".
Water is indeed a challenge in the area and the lined pollution control dams have been constructed years ahead of when they will be needed in order to catch rain water for use in testing and construction purposes. Mothomogolo said that the mine will use six million litres of fresh feed water per day once it is in full production.
The gestation of the R8bn (US$1bn) mine is fully funded and backed by a Chinese consortium made up of the Jinchuan Group and the China-Africa Development Fund (CADFund) at a favourable rate of Libor plus 3.5%. The funders, who are also strategic equity holders of a 45% stake in Wesizwe, have said that there will not be any further dilution for current shareholders.
Wesizwe also owns a fully funded 26% stake in Platinum Group Metal's adjacent Maseve project so the opportunity for shared infrastructure is a reality.
Aveng Grinaker-LTA was recently awarded the R1.6bn shaft sinking contract. The main shaft is to be 1000m deep and 8.5m in diameter. A ventilation shaft will also be constructed down to 930m and will be 7.5m in diameter. Main shaft commissioning is planned for April 2018 with production build up shortly thereafter. Full production is only expected to be achieved in 2023.
Besides pouring copious amounts of concrete and money into the development of a shiny new mine, the company is working hard to involve the local community in order to avoid disputes that have occurred in the past.
Close to 38% of locals (approximately 158 people) have benefited from employment opportunities at the mine site thus far the company said. The aim is to employ approximately 3200 to 3500 people at full production said Mothomogolo.
"Our policy is to prioritise the recruitment of employees from the local community and more employment opportunities will be available during the construction phase of the mining project as we move towards a fully functional mine by 2021," says Wesizwe CEO, Mr Jianke Gao.
Included in future plans are a R9m investment in providing clean running water in the region, R12m towards improving education and R11m towards a sustainable agricultural project.
Deputy Minister for mineral resources, Godfrey Oliphant, was also visiting to view the progress thus far and described the site simply as "impressive" before dashing off to his next engagement.
In the midst of the doldrums in the platinum industry, the long term commitment of Wesizwe to its Bakubung project is unwavering and based on the firm belief that market demand for platinum will outstrip supply from 2017 onwards driving prices to US$1 880/oz and then eventually above US$2000/oz from 2020.