Johannesburg - Black economic empowerment (BEE) issues have implications for the bid by Impala Platinum (Implats) for Mvelaphanda Resources and Northam Platinum according to Sandile Nogxina, the director-general in the department of minerals and energy (DME)
Interviewed at Thursday's opening of the upgraded smelter built by Braemore Resources at Mintek in Randburg, Nogxina said one of the conditions precedent to the Implats bid was that BEE credits earned by Anglo Platinum should not be lost.
Anglo Platinum earned these credits when it transferred the Booysendal platinum deposit to Northam in a BEE deal, through which Mvela ended up with control of the deposit through its 63% stake in Northam.
Implats announced it was "in discussions" with Mvela/Northam on September 12. Speculation in the market is that a formal bid from Implats seems imminent.
Nogxina said details of the proposed deal had been submitted to the DME.
Keynote address
He said: "They do not need government approval to carry out such a deal, but there are a number of conditions precedent and one of them is that the empowerment credits earned by Anglo Platinum will not be lost.
"The DME is looking at this and we have yet to make a determination. Until that is done I cannot comment on the deal because I do not wish to prejudge it."
Nogxina had earlier delivered a keynote address in which he was critical of some of the developments in the platinum industry, which he felt were hindering BEE as envisaged in the Minerals and Petroleum Resources Development Act (MPRDA).
He singled out "off-take" agreements between newcomers with the existing major producers to have the concentrates they produced toll-smelted (smelting of metal owned by one company by another, for a fee).
"That means the BEE miners are being restricted to mining the minerals and that's the end of it. They are not involved in the post-mining stages of smelting and refining.
"That seems to be taking us back to a situation that we were trying to get away from through the MPRDA."
Braemore upgrade
Nogxina said the Braemore/Mintek joint venture, which has developed a smelter based on Mintek's patented Conroast technology, met a strategic imperative of the MPRDA because it opened up opportunities in smelting and refining for junior players.
He said: "I hope the new smelter will open up new opportunities in SA?s platinum industry."
Interviewed afterwards, Nogxina said he understood the current realities in the investment markets and how the credit crunch was hampering BEE companies, and said the MPRDA catered for this.
He said it was acceptable for BEE companies which could not raise funds to operate on their own to continue through partnerships with existing, established operators.
Braemore has upgraded the smelter at Mintek from 1.5MW to 3.2MW capacity. The plant is now capable of processing around 2 000t/month of concentrates, and producing up to 70 000oz/year of platinum group metals.
Braemore's strategic aim is to use this technology to earn a foothold in the platinum sector by taking equity stakes in some of the companies which contract to have their concentrates smelted by Braemore.
According to CEO Leon Coetzer, Braemore's intention is to become a "mines to metal" company.
He said that Braemore had completed the bankable feasibility study for the proposed 10MW smelter to be built in the Rustenburg region.
He said the capital cost of the smelter would be finalised "once the optimal smelter feed source is determined", which should be in the fourth quarter of this year.
- Miningmx.com
For more mining sector coverage, visit miningmx.com.