Mining & Metals

• 50% of South Africa’s coal reserves lie in the Waterberg district

The mining sector accounts for just under 25% of Limpopo’s gross domestic product, employs about 13% of South Africa’s mining labour force and is set to grow into an even more formidable factor in the national economy in the near future.

Leading the way in this trend are new platinum and coal mines. South Africa’s energy needs are growing and Limpopo has vast coal reserves, with some estimates putting the total at 50% of the country’s total reserve.

As a commodities enterprise, the mining sector is very dependent on world prices and is sensitive to exchange rates. The price of platinum, by way of example, fell 50% between June and December 2008, with very negative results for South African mining operations. Solidarity Trade Union issued figures that showed more than 35 000 jobs lost in the mining sector overall in the year to July 2009. Anglo Platinum alone, with large interests in Limpopo, shed 10 000 jobs.

According to the Chamber of Mines of South Africa, Limpopo is home to:

  • The biggest diamond mine in South Africa (Venetia)
  • The biggest copper mine in South Africa (Palamin)
  • The biggest open-pit platinum mine in South Africa (RPM)
  • The biggest vermiculite mine in the world (Foskor)
  • One of the major iron-ore producing mines in South Africa (Kumba)

As well as these achievements, Limpopo also has:

  • 41% of South Africa’s platinum group metals (PGM) resources
  • 90% of South Africa’s red granite resources
  • Approximately 50% of South Africa’s coal Reserves

According to Department of Minerals and Energy figures from late 2007, Limpopo contributes 4% of coal mining in South Africa. The most optimistic forecast, though, is that in 30 years’ time Limpopo could contribute as much as 50% of South Africa’s coal. Similarly, Limpopo
contributes 5% of South Africa’s diamond production currently, but that figure could rise as high as 50% as well according to a March 2008
estimate. The province already produces 41% of South Africa’s PGM, but even here growth is expected in the foreseeable future. Regarding
other mining (gold, iron ore, non-ferrous metals, chrome, copper, manganese and phosphate), Limpopo’s contribution is approximately 16% of national distribution. Again, growth is expected across almost all of these subsectors.
There are 70 mines operating in the province, 50 of which are small- or medium-scale operations. Eighty percent of revenue is derived
from the bigger mines:
Copper and phosphate: Phalaborwa
Platinum: Amandelbult, Northam, Potgietersrus (Mokopane), Musina, Lebowa, Marula, Modikwa
Coal: Grootgeluk, Tshikondeni
Diamonds: Venetia

In terms of downstream activity, two of the major concerns situated in the province are located in Polokwane: Silicon Smelters (the largest charcoal producer in Africa) and Anglo Platinum’ smelting facility, one of three run by the company. Anglo Platinum is the world’s biggest primary producer of platinum group metals.

The major quarrying operations concern the extraction of calcrete, granite, gravel and aggregates and dolomitic limestone.

Mining belts
Sekhukhune: north-south orientation. Dilokong Corridor is the main cluster, situated between Polokwane and Burgersfort. Deposits of platinum, vanadium and chromite are found here as part of the Eastern Limb of the Bushveld Igneous Complex. Three major companies operating in this area are Anglo Platinum, Impala and Lonmin.
Phalaborwa: Phalaborwa Mineral Complex (iron ore, phosphate, copper); Giyani Greenstone Belt and Murchison Greenstone Belt (antimony
and gold).
Waterberg: platinum and coal (particularly near Lephalale).
Soutpansberg: coal.
Musina: diamonds are found in the far north of the province.

Opportunities
Mine supplies: The Department of Economic Development, Environment and Tourism is working on the concept of creating a mining equipment suppliers’ park. With the support of the mining houses, it is hoped that an increasing percentage of mining supplies will be manufactured and sourced within Limpopo. This would contribute to skills development, skills retention and the expansion of the province’s manufacturing sector.
Minerals: Studies show that potential exists for the manufacture of magnesium oxide, limebased products and cement.
New mines: Trade & Investment Limpopo states that some 22 new mines could still be established in the Dilokeng district. Some 6 000
people would be employed and if all the potential was fulfilled, the new projects would attract over R6-billion in new investment.
Coal to gas: The Fischer-Tropsch process of converting coal to fuel has been perfected by South African company Sasol. Opportunities to
establish similar plants exist in the coal-rich Waterberg region.

Platinum
South Africa produces about 75% of the world’s platinum. The biggest player in the platinum market, Anglo Platinum, is investing close
to R6-billion in expanding its operations at Potgietersrus Platinum North. The main focus of the investment is in increased milling
capacity, which will ultimately take the plant up to installed capacity of 230 000 platinum ounces annually.

On the Eastern Limb of the Bushveld Igneous Complex, Anglo Platinum is also trying to increase capacity at its Twickenham mine (about halfway between Polokwane and Burgersfort). The R7-billion project is expected to start producing 180 000 ounces per year in 2018.
Also on the Eastern Limb, Platinum Australia (PLA) is investing several billion rand in developing a project at Smokey Hills. The aim is to have an annual production of platinum group metals of about 95 000 ounces over a seven-year lifespan.

A potential project at Akanani (approximately 40 km north of Mokopane) near existing Anglo Platinum mines in the area, has been put on care-and-maintenance. Lonmin believes that some 250 000 ounces per year might come from the project but development costs will run to about R3-billion.

Coal
Coal is mined chiefly for electricity-generation purposes in South Africa, and will form a vital part of the country’s plans to double its energy
output by 2020. State utility Eskom, responsible for 95% of South Africa’s electricity, has made the use of low-quality coal possible in electricity generation, which allows for more efficient use of a higher percentage of the material mined in the province.

Coal mining in Limpopo has great potential for large and small operators, as well as for the mining services that are linked to the various stages of the production chain. With Eskom building new power stations and resuscitating some old ones, the demand for coal is huge.
Limpopo has deposits in several places, but mostly in the Waterberg region. Among the companies either actively mining or prospecting
are Sasol, Exxaro, Eskom and Anglo Coal.

In the Waterberg, production at Firestone Energy’s Vetleegte was reported to be up by about a quarter to June 2009. The company
intends supporting a power station with up to 15 million tonnes of coal per year.

One of the biggest expansions of a coal mine is under way at Exxaro’s Grootgeluk mine. An amount of R9-billion has been set aside for the
projectto up its current production of 18.6 million tonnes per year. This stems from an agreement signed in 2008 with utility supplier Eskom which needs coal for its new power station at Medupi. The contract was for 14.6 million tonnes to be supplied every year for 40 years.

The Exxaro group produces about 45 million tonnes per year and has targeted the Waterberg as a way of growing the company. Some R28-
billion has been set aside for projects in the region for the period 2009 to 2018. The company has plans to develop:

  • Thabametsie open-pit coal mine (about R12-billion)
  • A new mine development with Sasol (about R9-billion)
  • Downstream investments such as new char and market coke plants.

Coal of Africa Ltd (CoAL) have applied to mine coal not far from a World Heritage Site and a nature reserve in the province’s northern reaches. Game farm owners and people concerned with heritage issues have objected to the development of coal fields near the Mapungubwe National Park. The Vele mine may create as many as 14 000 direct
and indirect jobs and this will doubtless play a role in the decision on whether to award a mining licence. But tourism is increasingly being seen as a more sustainable way of growing the local economy. The outcome of the debate will have big implications, either way.

Diamonds
De Beers Consolidated Mines (DBCM) closed its Oaks Mine in August 2008 but the Venetia Mine still produced 7 500 carats in 2008. This was a reduction in volume compared to 2007 (9 080) and the figure was expected to be lower still in 2009 as the company cut back on production in response to the economic slowdown. Venetia is
by far the most important part of DBCM’s South African operation, accounting for some 40% of South Africa’s production and is situated in the far north of Limpopo, west of the town of Musina.

Phosphate
The Phalaborwa phosphate mine of Foskor is set for a makeover that will increase its capacity by 14% by 2011. This will take the capacity of the mine up to 2.85 million tonnes. The company, in which the Industrial Development Corporation holds an 85% share, reported a R1.9-billion profit in 2009, an increase of 128%. It uses the phosphate rock it mines to manufacture phosphate fertiliser and phosphoric acid.

Other mining operations
The first recorded discovery of gold in South Africa occurred near Polokwane in Limpopo in 1871. The majority of South Africa’s gold-production since then, however, has come from the neighbouring Gauteng province, but there remains a strong gold-mining industry in
Limpopo, especially as a by-product of platinum group metal mining at several of the large platinum mines in the province. South Africa has
approximately 40% of the world’s gold resources, and accounts for almost 14% of gold production all over the world.

Altogether, some 30 tonnes of gold have come out of the mines located in the Murchison Range in the course of the last century. Giyani is also historically a site of gold exploration. The Murchison Greenstone Belt produces about 20% of the world’s antimony.

The Palabora Mining Company (Palamin), based in the far east of the province, is South Africa’s biggest copper mine. The mine is the only
South African mine to produce refined copper. In 2008, the mine hoisted almost 12-million tonnes of ore at a grade of 0.69% and produced 286 000 tonnes of copper concentrates.

Other minerals mined in Limpopo include iron ore, phosphate, emeralds, magnetite, silicon, mica, scheelite, granite, corundum,
feldspar and vermiculite.

Provincial stake
The Limpopo Economic Development Enterprise (LimDev), an agency of the Limpopo provincial government, has a 100% interest in Corridor
Mining Resources (Pty) Ltd (CMR). CMR has interests in several mining projects in attapulgite, gold, chrome and platinum. It has entered into partnerships with ASA Metals, Attaclay, Tameng and Phokathaba Platinum.

ONLINE RESOURCES
Chamber of Mines of South Africa: www.bullion.org.za
Geological Society of South Africa: www.gssa.org.za
Mining Qualifications Authority (MQA): www.mqa.org.za
National Department of Mineral Resources: www.dme.gov.za
South African Institute of Mining and Metallurgy: www.saimm.co.za

















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