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ADU ReVIeW

Driving partnerships for change

t might have taken a global pandemic for the in this particular equation.”
Ipoint to be driven home, but the mining in- Baxter also highlighted the 77% vaccina-
dustry has unequivocally been South Africa’s tion rate across South Africa’s mining sector
saviour over the past 2.5 years. was almost double the nationwide average of
A quick look at figures presented by Miner- less than 40%, on the back of a partnership
als Council South Africa chief executive Rog- between the Government and the Minerals
er Baxter explain why. In 2021, total produc- Council.
tion from the country’s resources sector was In the lead-up to Africa Down Under,
valued at a historic high of R1.19 trillion (about South African President Cyril Ramaphosa
$100 million), representing 8.7% of GDP. Ac- announced major reforms to address the
counting for a host of other multipliers, that country’s long-running electricity crisis, a
number is closer to 18%. move very warmly welcomed by Baxter and Roger Baxter
“One thing that COVID taught us…it acted his team.
as a catalyst for us recognising that we can Baxter said the opportunities for national stream over the next three years, and we
do a lot more together in partnership than power utility Eskom to tap independent pow- estimate that will significantly grow over the
we can do in contestation outside of partner- er producers for additional capacity was long next couple of years as companies start see-
ship,” Baxter said in his opening remarks. overdue. ing early runs on the board.”
“That partnership enabled us to save lives “We’ve been pushing for a while for the However, Baxter warned the country’s en-
and save livelihoods during the COVID pan- Government to open up to private sector in- ergy security must not be compromised, es-
demic. I want to make that comment very vestment and liberalise the energy sector,” pecially in pursuit of decarbonisation goals.
clearly that we were able to get back to work he said. “Our coal sector remains a really important
quite quickly, putting in place the standard “Eskom is going to remain a critical part component, but we are seeing a significant
operating procedures you normally do in an of our energy mix but our solutions to the amount of investment in renewable energy
industry of this sort of nature. energy environment in South Africa, to our and the mining sector is leading the charge,”
“We effectively helped bail out the econo- electricity crisis as we call it, is by getting a lot he said.
my. Every time I see the Minister of Finance, more private sector investment. “We are the game changers, we are the
he’s got a really big smile on his face. It’s not “In the mining space alone, we’ve got catalysts that are really helping to shape the
because he likes me, it’s because the indus- 6.5GW of current projects valued at about game in South Africa.”
try is paying important taxes to government R100 billion which we hope to bring on- – Michael Washbourne

Funds start flowing for Orion

rion Minerals Ltd has struck the first cru- “These were major producing districts but we have made enormous progress,
Ocial blows in its quest to begin commer- and the major infrastructure is in place to particularly over the last couple of months,”
cial development of the Okiep copper project get them back and going again,” Smart said. Smart said.
in South Africa. “Both of these mining districts have not “We’ve refocused the business and we’re
Exactly one week after managing direc- fully exploited the orebodies. In fact, there’s actually busy looking at a feasibility study
tor Errol Smart presented virtually to Africa probably more ore remaining than what has now to bring in earliest possible production
Down Under, Orion announced the Indus- historically been mined. It is really just a pas- that will be a more moderate scale to start
trial Development Corporation (IDC) had sage of history and macro-economics that with. Over a 4-5 year period, we can reach
agreed to fund 43.75% of the pre-develop- made these mines close when they did.” that same target production by reducing the
ment costs and facilitate BEE ownership at Prior to Africa Down Under, Orion com- peak funding requirement dramatically.
Okiep. pleted a $7.35 million capital raising which “Since we’ve done the BFS, a lot of
With Orion having already contributed included a $6 million placement to an ar- technologies have advanced, opportuni-
almost R45 million, representing a 56.25% ray of investors. The dual-listed company’s ties have opened, including things like the
pro-rata portion of the total pre-develop- register is now essentially evenly divided supply of renewable energy by independent
ment budget, IDC will fund the balance to into groups from Australia, South Africa and power producers because the Government
ensure feasibility studies are completed by Europe. has now lifted the regulation cap. We could
June 2023. Despite being fully permitted to mine be completely renewable energy powered
The funding agreement between Orion Prieska, Orion has yet to attract the nec- on this mine at a lower cost than the grid
was realised following the grant of a mining essary development finance. The BFS re- cost that we had in our feasibility study.”
right for the Flat Mines areas at Okiep. Drill- leased in 2020 estimated a peak funding re- Smart expressed confidence his compa-
ing and metallurgical sampling needs to be quirement of $413 million to build a 2.4 mtpa ny could achieve producer status within 15-
completed to finalise the feasibility studies operation producing 22,000 tpa copper and 18 months of locking in finance for an early
for brownfields copper development in the 70,000 tpa zinc for an initial 12 years, gener- production scenario based on the develop-
Northern Cape. ating pre-tax cash flow of $1.6 billion with an ment of an open-pittable resource hosting
Okiep is considered a potential second all-in sustaining margin of 47%. 1.1mt @ 1.9% copper.
base metals production hub for Orion along- “To raise $413 million with a three-year
side its flagship Prieska copper-zinc project, lead time for a South African project has – Michael Washbourne
about 450km to the east. been challenging, I won’t hide from that fact,

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