According to the African Rail Industry Association (ARIA), the South African government’s proposed structural reforms to the rail sector, which will see private rail operators operating on the country’s core rail network, will breathe new life into an industry which is currently under severe pressure.
The reforms, announced by President Cyril Ramaphosa in October 2020 as part of the country’s Economic Reconstruction and Recovery Plan, aim to supplement Transnet’s capacity, migrate freight volumes from road to rail and stimulate broader economic growth. The plan initially proposed a deadline of October 2021 for its introduction. Speaking at the recent ARIA webinar Dr. Sean Phillips, head of the National Treasury’s Operation Vulindlela unit said that the current target date for enabling third-party operators in the freight sector was August 2022, with ongoing efforts under way to accelerate the time frame put on the table by Transnet.
ARIA estimates that only 17% of South Africa’s general freight currently moves by rail. “Transnet moved 215 million tonnes in 2019, down 5% from 2018, with vandalism often paralysing the country’s electric fleet. However more than 80% of the country’s 36 000km network has ‘significant capacity,” said Mesela Nhlapo, ARIA CEO.
Potential opportunities
ARIA research shows that 190 million tons of intercity freight and 20 million tons of bulk commodities currently move by road every year. Of this, around 58 million tonnes could move to rail almost immediately, with the sectors that would benefit including agricultural commodities, metals and minerals, cars, containers, hazardous chemicals and liquid bulk.
An estimated R45 billion in rolling stock alone would be required to service this volume requirement, which would provide a massive boost to the local rail manufacturing industry, with significant locomotive and wagon build programmes on the cards. Unlocking this capacity would also grow the rail services segment, finance markets and the advisory market, as specialist advisors would be required across the supply chain.
Nhlapo said it was important to note that third-party access in this context did not mean privatisation, but rather the use of the rail network by private sector rail operators at a fee, similar to how trucks pay toll fees to access roads to move freight across the country. Importantly, no new regulation is required to enable third-party access. Regional trading partners have already moved to this model, supporting interoperability and regional trade for pan-African operations.
“The value of this move to the state and Transnet would be significant. Right now, we have a massive network with excess capacity, which could unlock significant incremental cash flows through access fees from private operators. In addition, the existing infrastructure requires no extra state investment, as track maintenance costs should be largely fixed costs,” said Nhlapo.
Eskom, Exxaro and Seriti Resources have announced the signing of a landmark Memorandum of Understanding (MOU) that spells out their intention to pursue, co-operatively and individually, the development of renewable energy projects to lower their carbon footprint at their operations.
In doing so, the parties aim to create employment and re-skilling opportunities for communities living and working at and around their operations, and to take a step towards a just transition to a low carbon future in South Africa.
Andre de Ruyter, CEO of Eskom said, “Eskom continues to explore means to lower the cost of coal supplied to its power stations, and this investment allows it to take advantage of the low cost of photovoltaic power. This is one of the many initiatives Eskom has embarked on to achieve a NetZero status by 2050.”
Exxaro and Seriti are the largest coal suppliers to Eskom, contributing around 80% of Eskom’s coal supply per year. By implementing renewable energy solutions at their Eskom-tied operations and at related Eskom sites, Seriti and Exxaro aim to achieve both carbon reduction and cost savings in the generation and use of electricity at these mines. This is symbiotic with Eskom’s mandate to provide electricity in an efficient and sustainable manner, which includes decarbonising its supply chain.
Mxolisi Mgojo, CEO of Exxaro said, “This is a significant landmark development in South Africa’s energy transition to a low carbon economy for three of South Africa’s largest players in the mining and energy sectors. The investment in decarbonising our mining operations is a systematic and responsible approach to the energy transition without introducing risk to the country’s electricity generation.” He added that the collaboration amongst Exxaro, Seriti and Eskom is exemplary of the possibilities achievable through co-operative and constructive relations between business and government in securing livelihoods and a future for South Africa.”
Solar PV facilities and reducing CO2
The first phase of the envisaged project pipeline will see the construction of a number of solar photovoltaic facilities both on-mine and at Eskom sites. These may be behind-the-meter solutions (that is, off-grid) or wheeled solutions, or combinations of the two. The companies have committed to begin the projects as soon as possible, subject to regulatory approvals. Further projects envisaged may include energy storage and possibly wind energy facilities.
Under the MOU, Seriti envisages achieving a reduction in CO2 emissions of up to 350 000 tonnes per annum, around half of its current emissions of 700 000 tonnes of CO2 equivalent through the consumption of coal-fired electricity generation. Exxaro envisages achieving a reduction in CO2 emissions of up to 130,000 tonnes per annum at its Matla coal mine, which represents a saving of 70% of the greenhouse gasses with Matla at full production.
Mike Teke, CEO of Seriti said, “We recognise that climate change and the need to decarbonise our economies is a significant challenge and imperative for South Africa. But, at the same time, we are very conscious that this needs to be done in such a way that does not destroy our industrial base, or the lives of South Africans that rely on our companies for jobs, enterprise and support: this is the very basis of a just transition. As a company we are fully committed to decarbonisation and a just transition, and in working with our partners – in business, government, labour and communities – in achieving this, and have formed a new subsidiary, Seriti Green to pursue this.”
According to Barrick Gold president and chief executive Mark Bristow, the Loulo-Gounkoto gold complex is set to remain a major contributor to the Malian economy as it continues to replace the ore depleted by mining.
Speaking at a media briefing, Bristow said Loulo-Gounkoto was on track to meet its annual production guidance, with its new underground mine at Gounkoto — the complex’s third underground operation — ramping up production. Through successful exploration it is on track to increase mineral reserves net of depletion for the third successive year and promising results from the Yalea Ridge and Gounkoto-Faraba targets reaffirm the potential for further life-of-mine extensions. “Loulo-Gounkoto is one of the world’s greatest gold mining operations and it continues to confirm its status as a member of the industry’s elite Tier One1 club as well as the largest private sector contributor to Mali’s GDP,” Bristow said.
Mines operated in Mali by Barrick and its predecessor Randgold have spent some $8 billion in the country in the form of taxes, royalties, salaries and payments to local suppliers over the past 24 years. To date this year, it has paid $318 million to the government in taxes, royalties and dividends and invested more than $13 million in community wellbeing projects ranging from health and education to economic development initiatives such as its Business Accelerator program, designed to equip budding entrepreneurs with management skills.
“In addition to the enormous value it creates for its stakeholders, Loulo-Gounkoto also aspires to a high level of social responsibility. Almost 40% of employees have been vaccinated against Covid-19 and 335 people have been vaccinated in the surrounding community. Security staff and other employees who come into contact with the community have undergone rigorous training in human rights. Work is also under way to secure the new certification standardized by the International Cyanide Management Institute.”
Loulo-Gounkoto is maintaining its commitment to the employment and advancement of host country nationals, in line with Barrick’s global policy, and people from the nearby Kenieba village have been successfully trained to operate key equipment at the new Gounkoto underground mine. The complex is almost entirely staffed and managed by Malian citizens.
Impala Rustenburg is collaborating with three taxi associations in the Rustenburg area, in initiating a campaign to collaboratively encourage communities to stand together against any disruptive unrest. The initiative is part of a series of partnerships with local taxi associations.
Impala chief executive Mark Munroe explained that the destructive rioting and looting that erupted primarily across two provinces in July affected the sustainability of businesses, safety of citizens, and economic stability of the country. “They also further damaged national efforts to control the deadly Covid-19 pandemic, while adding greater stress on our already struggling economy. We have to guard against this happening in the North West.”
As part of Impala’s initiative to increase vigilance and demonstrate its on-the-ground support and efforts to protect the wider community, Impala and three taxi associations in the Rustenburg area surrounding Impala’s operations took to the streets to distribute information flyers.
Taxi association involvement
Commenting on the joint initiative to discourage disruptive unrest, deputy chairman of BAMTA Association Levy Modise said, “The management of Impala joined forces with the taxi associations to make people aware of the fact that looting brings about the most unwanted thing in our country, which is unemployment. We have to safeguard all our jobs. Already, unemployment levels are high so let’s try to keep our jobs safe by not destroying property.”
Chairman of KARAMATA Taxi Association, Arthur Makgale,commented, “As taxi owners we have started to talk to passengers to encourage them not to damage anything for the sake of our future and the future of our children.”
Public relations officer of Bafokeng Taxi Association, Thabang Ramushu, added, “As a taxi association, we are against looting because it causes people to lose their jobs and businesses to suffer. We are promoting awareness and encouraging anti-looting and we thank Impala for their continued support and relationship with the BTPC.”
“We at Impala have, for three-and-a-half years, been putting in tremendous effort to instil a culture of high performance, accountability and care not just within the confines of our mining operations, but also within the wider community. We recognise that we are only stronger by working together and are committed to continuously contributing to the upliftment and development of our greater Rustenburg community,” concluded Munroe.
Champion Iron has signed a Letter of Intent with Caterpillar to implement artificial intelligence based advanced drilling technologies on Cat equipment at its Bloom Lake Mine.
“We are honoured to collaborate with industry leaders like Caterpillar and Toromont Cat, and are confident that our workforce’s proven operational expertise and ingenuity will be an asset in deploying these technologies,” said David Cataford, Champion CEO.
The project will progressively implement a remote-controlled, semi-autonomous and fully autonomous Cat electric drilling fleet, utilizing the Technologies engineered, designed, and/or integrated by Caterpillar. With Champion contributing its experienced workforce, and Caterpillar’s independent dealer, Toromont Cat, its aftermarket support, the collaboration will aim to optimize Bloom Lake’s operational productivity and reduce energy consumption, while demonstrating the capabilities of Caterpillar’s advanced drilling technologies. A Drill-to-Mill strategy (D2M) is expected to be deployed based on a series of tightly integrated systems, driven by Cat MineStar solutions, designed to optimise the drilling, loading and hauling processes. D2M is focused on delivering improved milling performance by supplying optimized mill feed, while contending with dynamic operational conditions.
Real time data and AI
Using real-time data, artificial intelligence and analytics, Caterpillar’s integrated technology will support Champion’s ability to assess the status of machines, technologies, and material to enable more timely and accurate operational decisions and consistent execution across Champion’s entire mining value chain. The goal of the collaborative effort will be to deliver a fully integrated drill-to-mill technology solution powered by data connectivity and advanced analytics to ultimately improve workflow between the mine and plant, providing a more efficient end-to-end enterprise process that delivers more consistent raw material for final product specification requirements.
Cataford explained that the aim and vision of improving mining practices and ultimately reducing waste and energy use is the foundation of this collaboration. The entire Bloom Lake team has already demonstrated its ability to operate at a consistently high level, since commissioning the mine in 2018. “In doing so, we have continuously strived to improve operations utilizing the best existing and new prospective mining technologies. Drill-to-mill aligns with our core value of respecting the land that we exploit, as it will enable us to responsibly extract non-renewable resources using the best means possible,” he concluded.
Structural reforms are needed to enable a more business-friendly environment aimed at encouraging investment in order to grow the economy.By Raymond Obermeyer*South Africa requires creative and innovative solutions to put the economy back on a sustainable financial path.The country has benefited in recent months from a commodities boom which provided an unexpected tax windfall.This has resulted in an unprecedented trade surplus – meaning that more capital has flowed into the country than out of it – helped to underpin the rand, contained inflation and kept interest rates at historically low rates. The state’s finances have benefitted from the mining sector’s stellar results through improved tax collections which has, in turn, increased calls for a universal basic income grant.No commodity boom lasts forever. What happens when the price of commodities inevitably cool, and the state’s finances are no longer able to benefit from better than expected tax collections? Any commitment to a universal basic income grant must be based on sustainable sources of revenue. All indications are that the recent economic tailwinds are not enough to alleviate the tenuous position of the country’s debt to GDP ratio or avoid further future ratings downgrades unless government is able to significantly reign in public sector expenditure.Covid-19 pandemic impact
South Africa’s economy was in trouble even prior to the Covid-19 pandemic, characterised by low levels of growth, growing unemployment and poor business confidence. The pandemic has exacerbated the challenges facing the country.A deteriorating debt position is a risk to the entire economy. A financial crisis and deep recession will ultimately diminish confidence and reduce investment appetite.The fragile state of the economy is reflected in the disappointing month-on-month manufacturing output figures. According to Statistics South Africa manufacturing production fell by 0.7% for the third consecutive month in June this year, indicating that a recovery in this sector has stalled and failed to reach pre-Covid levels. Expectations are that the July figures will be even worse which will weigh on the sector’s contribution to GDP. In line with this, the latest Absa Purchasing Manager’s Index has fallen to a 14-month low representing declining sentiment.
SEW-EURODRIVE managing director Raymond Obermeyer.
There is extensive research available showing a strong correlation between economic growth and social stability. The former must urgently be prioritised with quick wins from low hanging fruit. These include the introduction of a business-friendly regulatory environment which is aimed at restoring private sector confidence and encouraging investment into local operations.Labour laws need to be amended so that they don’t dissuade businesses from hiring staff. We need to increase the beneficiation of extracted minerals into higher-value products and urgently increase the country’s manufacturing output. At the same time our country’s youth need to be armed with the necessary skills to ensure their employability in a rapidly approaching Industry 4.0 world.South Africa requires creative but practical policies which enable inclusive economic growth, boost confidence and encourage investment. The country has the potential to create a more positive future for itself, fuelled by opportunities for greater levels of trade as a result of the African Continental Free Trade Agreement. The time is now ripe for meaningful reform.
Epiroc has won an order worth over R150 million for battery-electric mining equipment from Ivanplats that will be used to develop its greenfield mine in South Africa in the most sustainable and productive manner possible.
Ivanplats, a subsidiary of Canadian mining company Ivanhoe Mines, has ordered several Boomer M2 Battery face drill rigs and Scooptram ST14 Battery loaders. The new Platreef underground mine, which will trial the emissions-free machines during its initial development phase, will produce palladium, rhodium, platinum, nickel, copper and gold.
“It is encouraging that Ivanplats is considering going all battery-electric at Platreef, and we are proud to support them on this journey,” said Helena Hedblom, Epiroc’s President and CEO. “Battery-electric equipment is increasingly embraced by mining companies as it provides a healthier work environment, lower total operating costs, and higher productivity. The technology is now well established, and Epiroc is driving this change toward emissions-free mining.”
Emissions-free mining equipment
Ivanplats plans to use all battery-electric vehicles in their mining fleet at Platreef. “We want to be at the fore-front of utilising battery electric, zero-emission equipment at all of our mining operations,” said Marna Cloete, Ivanhoe President and CFO. “This partnership with Epiroc for emissions-free mining equipment at the Platreef Mine is an important first step towards achieving our net-zero carbon emissions goals while mining metals required for a cleaner environment.”
Boomer M2 Battery face drill rigs and Scooptram ST14 Battery loaders are built in Sweden, and are automation ready and equipped with Epiroc’s telematics solution Certiq. The equipment will be delivered early in 2022. Epiroc will also provide on-site operator and maintenance training to Ivanplats.
Epiroc will offer its complete fleet of underground mining equipment as battery-electric versions by 2025, and its full fleet for surface operations as battery-powered versions by 2030.
The COVID-19 pandemic has given rise to a unique set of challenges within the mining industry and the rest of the world.
By Dr Nombasa Tsengwa*
Aspects of our daily lives, as well as the global economy, have all been forced to undergo significant changes to keep up with the pandemic.The opportunity presented to businesses by the pandemic, in many cases, has been the push needed to drive pace over perfection when it comes to technology testing and adoption.
Migrating from mechanised mining to automation
Exxaro’s migration from mechanised mining to automation began long before COVID-19; the pandemic has accelerated the pace of our digital transformation journey, but it’s something we have prioritised for a while. Our Belfast mine is digital and connected, using data science, automation, and connected workers to increase throughput, streamline operational costs, and promote innovation and sustainability. We’ve rapidly deployed ‘the new way of working’ – which is digital – leading to reimagined business models and enabling remote work.South Africa’s world-class mining industry can generate additional wealth and create new employment opportunities on a large scale. As the pandemic continues and vaccination programmes are being implemented in some countries, we must not lose momentum from this accelerated digital transformation. Technology and automation can help us increase productivity, safeguard our workforce, decrease costs, and help fight climate change, thus contributing to South Africa’s economy.An obvious strategic step for Africa’s mining companies is to now focus on technological advancements that promote workplace safety, reducing the risk of health and safety incidents. New technology has had to be implemented and fast-tracked to adapt operations and processes to evolving conditions; this includes the detection and pre-screening of COVID-19 to keep the mines and surrounding communities safer. Health and safety risks can be alleviated not only through improved health and sanitisation systems, but by the business’ ability to move operations online to a cloud-based platform, making it easier to continue operations anytime and anywhere. Enhanced business practices also help to identify areas of concern that need to be addressed and allow for immediate intervention – a critical component in ensuring business continuity.This means that when the next COVID-19-type event occurs, mining companies would be less affected, as operations can continue remotely, with employees separated by a healthy distance or by screens.
Ensuring Africa’s mining sector does not fall behind
Internationally, automation and tech are being embraced in the mining sector as “Mine 4.0” is adopted. We must ensure that Africa’s mining sector keeps up with this digital transformation, otherwise, we will not be able to compete when it comes to pricing or productivity.Labour and the mining industry need to work together to establish a way forward that preserves health and safety, increases productivity, and has the best interests of mining communities at its centre. Both labour and industry should consider how to accelerate implementation of automation and remote operations, which could have mitigated the closure of operations of some mines as a result of the COVID-19 pandemic.
Operating machinery remotely is physical distancing at its most extreme, as it ensures that employees can work away from their colleagues and away from areas where they are most at risk. If industry and labour work together to retrain and upskill labour for these new technologies where possible, it will benefit all stakeholders – employees, businesses, communities, and our country.
Dr Nombasa Tsengwa is the MD of Minerals at Exxaro Resources. (Credit: Exxaro Resources)
The choices made by mining companies need to be beneficial to the long-term outlook of the business. We are responsible for deploying these new technologies in a socially responsible manner while remaining mindful of potential ethical issues that may arise as a result, like unemployment, wealth distribution, and the unintended invasive potential of connected gadgets.Due to the size of the industry and the nature of the business, making the necessary changes to facilitate choices and changes like digital transformation requires a hefty investment. These investments often involve financial assistance with extended repayment periods, making rapid changes difficult to adapt to as businesses need to consider the long-term cost implications. Businesses can mitigate financial risks by using scenario modelling; looking at controllable uncertainties for demand and supply and the triggers affecting revenue and cost; and formulating response plans that consider the capital expenditures these plans require. Once the decision has been made to invest in new and innovative technologies, business will be able to reap the benefits of a hyperconnected world.With an exceptional minerals endowment, the South African mining industry has the potential to supply more commodities to world markets, if we can harness tech and automation.
Economic transformation and the environment
Research shows that environmental damage is lower in low-income countries, however, as incomes begin to rise, so does the potential for environmental damage. As industries grow and develop, they begin to have a more damaging effect on our environment.Finding ways to develop industries in an environmentally friendly manner needs to become a priority and, as such, investment needs to be made in green technology. The Paris Agreement seeks to promote sustainable economic development and growth while actively finding ways to reduce the impact of global warming. Exxaro is committed to doing our part in reducing our carbon footprint and fighting global warming, which is why one of our goals is to be carbon neutral by 2050. On our journey to sustainability, we’ve found that embracing new, green technologies is key to achieving these goals.
Creating a safer environment for employees and surrounding communities
Tech and automation can also help safeguard the health and wellbeing of communities. In the wake of the COVID-19 pandemic, the industry has implemented stricter health and safety protocols to protect employees and stakeholders. Technology has been leveraged to set up pre-screening measures, contact tracing, and even smart PPE. In this way, mining businesses are shaping healthier workplace behaviours that should continue long after the pandemic.The pandemic and the threat of climate change have shown us that the African economy cannot grow and develop without proper investment into new technologies – that is true for the mining sector, and all other sectors of the economy too. This will require an ongoing commitment from both the public and private sectors to ensure that Africa is not left behind when the Fourth Industrial Revolution takes place.
Manufacturer and supplier of bricks, Brikor Limited has acquired a 40% shareholding to the value of R50 million in Zingaro Holdings – a business that provides multi-product road transportation services for bulk commodities. Zingaro Holdings primarily operates in South Africa and mainly services short to medium distance routes in Gauteng, North West, Mpumalanga and Limpopo, with a fleet of more than 100 specialised vehicles.“Zingaro Holdings is well-positioned with substantial market share. There are also many synergies between Brikor and Zingaro Holdings and the Brikor board of directors believe it will ensure additional income and profit opportunities for the combined group,” says Garnett Parkin, Brikor CEO.Zingaro Holdings also specialises in providing turnkey services for mine activities, such as loading, hauling, stockpile management and haul road maintenance by using a wide range of specialised trucks and earth-moving equipment. Its specialised vehicles include tipper, low-bed and flat-deck trucks as well as various plant and mining equipment.
“The company has shown exceptional growth of around 20% per annum since 2013, with significant growth in revenue of 111% for the financial years 2016 to 2017. During the following financial year, revenue increased by 42.5%,” Parkin says.According to Parkin revenue growth is expected to stabilise at an increase of between 8% and 9% annually for the foreseeable future.Brikor also has an option until 30 April 2023 to buy the remaining 60% shareholding in Zingaro Holdings for R90 million in exchange for Brikor shares at an issue price of 15 cents per Brikor share.
Chris Griffith has been appointed as the new CEO and executive director at Gold Fields. Griffith succeeds Nick Holland and will take over on 01 April 2021.“We are delighted that an experienced executive of Chris’s calibre will join Gold Fields. He has deep-rooted operational mining experience and an impressive track record of delivering safe operational performance and leading effective change,” commented Cheryl Carolus, Gold Fields’ chairperson.Holland, who was due to retire on 30 September 2021 after 13 years as CEO of the company, has agreed to retire six months earlier to facilitate the leadership transition. “Nick has defined Gold Fields as it is today; a global, highly profitable and sustainable company, which is widely considered a leader in its field. In 2008, two-thirds of our production came from South Africa; in 2020 approximately 90% emanated from outside of South Africa with all our mines highly mechanised and increasingly automated,” Carolus said.Griffith, 55, was previously CEO of Anglo American Platinum. He resigned from this position in April 2020 to pursue other career opportunities and is currently on gardening leave until the end of March 2021.
“Creating value for shareholders is paramount, but at the same time the environmental and social sustainability of our Company and value creation for all stakeholders has taken on increased significance. We are confident that Chris is the right person to take the business forward,” Carolus said.Prior to Anglo American Platinum, which he led as CEO since 2012, Griffith spent four years as CEO of Kumba Iron Ore, another company in the Anglo American stable. A graduate mining engineer from the University of Pretoria, he had joined Anglo American in 1990 from JCI.In a statement, the Board paid tribute to Holland’s leadership at Gold Fields, which he joined as CFO at the formation of the Company in 1998 and led as CEO since 2008. Carolus highlighted that Holland prioritised safety and wellness at all the operations and during his tenure Gold Fields, has seen a marked improvement in its safety record. “At the same time environmental, social and governance issues have been fully integrated into the day-to-day management of the business, further entrenching Gold Fields’ vision of global leadership in sustainable gold mining.”“On behalf of the Board and all our 17 000 employees we want to thank you for the leadership you’ve shown over the past two decades and more. The Gold Fields of today is a testament to your vision, strategy and leadership,” Carolus concluded.
