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The construction and development of junior PGM company Wesizwe’s R7.9 billion Bakubung PGM mine continues to bear testimony to the excellent skills set that South African engineering companies deliver to the mining industry, Wesizwe CEO Jianke Gao tells Laura Cornish.

Bakubung’s six-year progression from study phase to execution may be slow by comparison with other junior start-up operations across the industry, but since securing the finance to take the project through to production, it is ‘all systems go’ for the mine. “As a mining engineer, I believe Bakubung’s resource, by comparison with its neighbours, is excellent quality. It will also be easy to mine,” Gao explains.

Full steam ahead at Bakubung

“Both major project engineering companies, EPCM contractor TWP Projects and shaft sinking contractor Aveng Grinaker-LTA are on schedule and meeting their development targets,” says Gao. TWP Projects’ contract includes all surface project work, terraces, temporary offices, electrical facilities, winder houses, shafts, headgears, ventilation fans, refrigeration plant and compressors, as well as all ancillary work including workshops, storage facilities and access roads.

TWP is one of the best EPCM contractors in the country and will deliver the project successfully. What we like about Aveng Grinaker is its commitment to hard work and its passion and drive for growth.”

Bakubung (formerly known as the Frischgewaagd-Ledig mine) has been designed to process 230 000 tpm run-of-mine (ROM), delivering 350 000 ozpa of PGMs at full production for 35 years. Both Main and Ventilation shafts are due to be commissioned in the second quarter of 2018; this will be followed by an estimated four-and-a-half year of production ramp up reaching full production in 2023.

“Since the commencement of our twin shaft sinking contract, we have started looking at technologies and methodologies to speed up the project’s underground development and bring it on stream earlier than currently planned. We have established a partnership with a Chinese company that offers such technologies and are investigating how to implement them at Bakubung,” Gao continues.

Although he was unwilling to provide any further detail on the technology, Gao did say it is common in China’s mining industry and is being implemented in Zambia in similar shaft sinking projects.

While Wesizwe will follow traditional deep level mining practises and employ about 3 500 local people, the company intends to maximise on the skills, knowledge and technologies it can co-share with Chinese mining company Jinchuan. “The company is a leader in the mining industry with over 50 years of experience and many attractive Chinese technologies – especially from an operational point of view.”

The Bakubung complex will comprise an independent twin vertical shaft system: a Main Shaft and a Ventilation Shaft. “The Main Shaft will be 8.5 m in diameter and extend 1 000 m below surface, and the Ventilation Shaft, 7.5 m in diameter, will reach 980 m below surface,” TWP project manager Robert Hull explains.

In November 2012, the Main Shaft had been sunk to 30 metres and the Ventilation Shaft to 80 metres. There is a lot of visible infrastructure on site – the Main and Ventilation shafts winder houses are already visible from a distance and there is a lot of activity around the two shafts themselves, mainly the installation of all structural infrastructure and the normal pre-sink operations.

The project cost since its launch in July 2011 stands at R550 million. A cash flow budget for 2013 has been submitted to the board for approval. Thanks to the conclusion of the financing transaction with a consortium made up of Jinchuan and the China Africa Development Fund (CADFund) in May 2011, the project is fully financed and de-risked until the mine reaches full production.

The Merensky reef (180 000 tpm, stope width of 1.35 m) will be mined using conventional stoping methods and the UG2 reef (50 000 tpm, stope width of 1.5 m) will use semi-mechanised Hybrid methods. Underground crushing is planned to take place at the main shaft ore passes, from where the reefs will be separately conveyed to stockpiles on surface before the concentrator plant.

A separate contract will be awarded to open up the mining blocks underground or underground flat development, which will take place between 2018 and 2023. Based on the monthly output, the design requires six mining blocks at any given time. The better quality Merensky reef will deplete within the first 10 to 15years of mining, after which the mine will become a full UG2 operation.

Steel erection and fabrication specialist Louwill Engineering, in joint venture with two other local companies, was recently appointed to design and erect both headgears on site. The headgears for both shafts will be erected by June 2013.

“Because our power allocation with Eskom was secured years ago, our energy requirements on site will not be a problem. Eskom’s power provision to the mine has been allocated according to two phases. The substations for the first 8 MW of power secured for Phase 1 are already installed on site and the Phase 1 supply will be commissioned by end of November,” says Hamlet Morule, Wesizwe’s corporate affairs executive. Phase 2 will include an additional 58 MW of power, which will be commissioned in 2014 on a load build-up slope.

Wesizwe has secured a temporary water supply of 200 000 ℓ/d, which is sufficient to the end of shaft sinking. However, the company requires a supply of 6 Mℓ/d fresh feed at full production. A process to secure water supply is under way with the Magalies Water and other interested parties, including neighbouring mining companies, local and provincial municipal structures, and community representatives.

To date, there have been no major challenges on the project, Morule notes, and no major work stoppages, despite the recent labour unrest in the PGM sector. When the company released its latest annual report, it also announced reaching 500 injury-free days on site; this milestone was achieved in February 2012. The project has also not accounted for any fatalities since start of construction.

Potential synergies (the concentrator plant)

A mine owner’s forum comprising the three neighbouring mines (Wesizwe, Maseve and Styldrift) was launched four months ago to identify and implement projects that will yield synergies for the operations. Gao notes that there are potential synergies with Royal Bafokeng Platinum’s Styldrift operation and neighbouring Maseve  regarding sharing of services and land for infrastructure, training and skilling programmes, security services, housing land, etc.

The future of Wesizwe

“We ultimately know that a single project is not enough for a mining company in Africa. We are looking for other potential projects and are simultaneously under way with a PGM industry analysis, which we will report to the board. Acquiring cash-generating PGM assets is our first priority, but we are also looking at all other strategic mineral projects. While the market is currently depressed, I believe it will have fully recovered in four or five years’ time meaning now is the time to move in and acquire PGM assets,” says Gao.

A perfect partnership

While the entire project capital funding Bakubung’s development is Chinese-sourced and the core management team is from China, Wesizwe remains a South African company at heart. The CEO, financial director and projects general manager, along with two additional members are from China, while the rest of the company, including the 3 500 employees who will run the mine, will all be locally sourced. A local employment programme is already well under way.

Wesizwe’s empowerment partners:

Micawber 809: 5.98%

African Continental Resources Venture: 4.52%

Africa Wide Investment Holding: 2.82%

Vunani Capital: 1.83%

Green Tree Investments: 0.82%

Inkwali Asset Management: 0.36%

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