JOHANNESBURG (miningweekly.com) – Mining industry doyen Brian Gilbertson, who has been involved in several landmark industry-making investments, foresees South Africa’s platinum endowment as providing the potential for yet another industry-making surge.
Besides the outlook of growing demand and struggling supply, there is a snowballing conviction that South Africa could and should become the first mover in creating a kind of ‘Platinum Valley’ that emulates the great Silicon Valley success of the US – and Gilbertson’s Newco is willing to stride towards that potential goal, with the full backing of the State-owned Industrial Development Corporation (IDC), exciting new technology that is poised to assist in adding value and a local community leader who is champing at the bit to see that it happens in his area.
“Being a miner and a beneficiater will allow shareholders to participate in the entire value chain,” Newco’s Arne Frandsen tells Mining Weekly Online in a video interview (see attached).
The IDC, which currently has R100-billion-plus on its balance sheet, is part of a special task force that, together with the R23-billion Newco, is driving the beneficiation initiative.
The combination of the IDC, the JSE-listed Pallinghurst, the Algemene Pensioenen Groep of the Netherlands and the Temasek sovereign fund of Singapore, have repackaged the former Platmin and other platinum assets into the debt-free Newco, which has $500-million cash at-the-ready.
The intention is to take Newco forward as an industry changer with shareholders potentially benefiting from the full platinum supply chain in a Southern African region that has a virtual monopoly on platinum-group metals (PGMs), which are being used in an ever-increasing number of industrial-consumer applications.
Using a temporary name for the large restructured company that will be relisted in a year as an integrated PGMs miner and beneficiater, Newco expects to be producing at a rate of 1.1-million ounces a year in five years’ time, 750 000 oz/y of the platinum, palladium, rhodium and gold (4PGEs) being produced on the western limb of the Bushveld Complex and another 400 000 oz/y on the eastern limb.
Meanwhile, a new low-energy technology, the Kell Process, appears to have the wherewithal to debottleneck platinum value-add with the help of IDC funding.
“It’s a very powerful proposition for any shareholder,” says Frandsen, who is studying the feasibility of listing Newco on three exchanges – the JSE, Hong Kong and the LSE – within a year.
“The natural home would be our home exchange, the JSE, and it will then in all likelihood be either Hong Kong or the LSE. We have already had extensive discussions with Hong Kong and that is a distinct possibility.
“Closer to the time, we’ll take the decision whether it’s going to be Hong Kong or London or Hong Kong and London,” Frandsen tells Mining Weekly Online.
IDC CEO Geoffrey Qhena sees Newco as a special investment case and another one of Gilbertson’s potential industry changers.
He believes that Newco will enable beneficiation to happen, in line with government priorities.
“This is but one of the many steps that we will be taking,” adds Qhena, referring to the company paying R3.24-billion for 16% of Newco.
Department of Trade and Industry (DTI) director-general Lionel October told Mining Weekly Online in January that a DTI team was working with participants to determine the economic viability of establishing a central platinum hub with satellites that allow for locational flexibility.
“Some of the provinces and our local companies have been working on moving into the commercialisation of fuel-cell technology, so, definitely, this could be one area that we designate as a special economic zone (SEZ),” October was quoted as saying in the interview earlier this year.
The South African government, which is hoping its new SEZs Bill and policy will create the framework for the development of new industrial nodes outside the traditional industrial heartlands, has identified platinum as one of South Africa’s strategic minerals in view of the overwhelming bulk of the world’s deposits being in South Africa and neighbouring Zimbabwe.
For the rest of this article, please go to the MiningWeekly.com website: http://www.miningweekly.com/article/gilbertson-very-very-bullish-on-platinum-group-metals-2012-04-02