Bloemfontein - The announcement on Tuesday by Saki Macozoma, chairperson of Ntsimbintle Mining, that an Australian group had bought a 20% stake in the mining group is great news for the Northern Cape economy.

Ntsimbintle Mining is a black economic empowerment company partnering with Brian Gilbertson's Pallinghurst Co-Investors in the opening of a new manganese mine close to Hotazel. The two entities together own the company Tshipi é Ntle, which will develop the new manganese mine.

On Tuesday it was announced that OM Holdings (OMH) the company listed on the Australian Stock Exchange, had paid R320m for a 20% stake in Ntsimbintle Mining. OMH also announced that it would acquire the 49.9% interest that Pallinghurst has in Tshipi in exchange for 139.9m OMH shares. Gilbertson will become a non-executive director of OMH.

"The deal represents an important foreign investment in the South African mining industry and will bring considerable expertise and experience of the markets to our own manganese sector," said Macozoma.

The R320m capital injection can be used to erect the proposed manganese mine at Hotazel, although analysts reckon the costs of such a mine will run to at least R1bn.

The Kalahari Basin is the site of 80% of the world's manganese reserves and, although the demand for the metal is currently poor owing to the global economic downturn, there are indications of a future shortage of the metal.

The big problem for new entrants to the mining industry, and especially BEE companies, is to deliver the ore to steel producers at the best price. Macozoma reckons the partnership with OMH will give them a foothold in this competitive market.

The final stumbling blocks in the way of the proposed Tshipi mine in the vicinity of Hotazel are now being ironed out, states Cynthia Magodi of the Kgalagadi Rural Charitable Trust, a shareholder in the project.

In the first place the final permit from the Department of Minerals and Energy needs to be received, and in the second the logistical problem of getting the ore to a port still has to be resolved. Discussions with Transnet are under way.

"The greater the number of manganese producers who come to the Northern Cape, the more sustainable it will be for Transnet to make capacity available," she declares.

If everything goes according to plan, she believes the first sod for the mine could be turned by December this year.

- Sake24.com

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