Wednesday, May 25, 2022

Operating big conglomerates like Debswana becoming prohibitive

Ahead of the Botswana Resource Conference in a few weeks’ time, it is proving difficult to operate big mining companies such as Debswana as juniors have better results to show since they have leaner operational costs and are efficient oriented to match the demands dictated by the international mineral markets.

While the small miners are showing off, Debswana is conspicuously absent on the list of presenters at the Botswana Resource Sector Conference at the end of the month that will update the mining community of its developments over the past year, signifying the difficulty of operating mining conglomerates vis-à-vis the international mineral markets.

Among the list of presenters on the resource sector conference will be junior miners Lucara Diamond Corp which reports good progress at its Karowe mine, previously known as AK6 project. The company says activities across the engineering, procurement, construction and development of the operations team advanced the project significantly in 2011.

Lucara says by end of 2011 the Karowe project has advanced in engineering, procurement and fabrication activities were essentially complete and project construction stood at 90 percent complete.

Lucara says delays were blamed on the steel industrial action in July in South Africa but commissioning “is expected early in the second quarter of 2012.”

As at the end of February this year, Lucara says the project had achieved more than 1.5 million hours without a lost time in injury. The company says archaeological monitoring of all construction areas continued and no artefacts were discovered on site or at the Boteti housing sites in Letlhakane.

Following the completion of the 25km power line from Orapa sub-station to Karowe mine site late last year which was handed over to Botswana Power Corporation, the mine was switched to the grid power to support commissioning activities and ramp up of full production. As at December 2011 an ore stockpile of 230 000 tonnes had been established to support commissioning.

The process plant operations and maintenance was also given to contractor, Minerals Operations Executive (Minopex) which is working with the operations staff. The operations senior management, technical and support staff were successfully recruited while in Gaborone the sales and marketing offices were completed and senior staff recruited. The company is in the process of installing security and stock control systems.

In the same vein, Gem Diamonds reports that its Ghaghoo Mine in the Central Kalahari Game Reserve has gone very well. Gem Diamonds Botswana which holds a 25 year mining licence has approved a budget of $85 million for Phase 1 of the Ghaghoo underground mine with a production capacity of 720 000 tonnes per annum. The company says the objective of Phase 1 is to confirm the grade, diamond prices and the recovery process including the use of autogenous milling which is expected to increase diamond liberation.

“A decline was settled on as the most cost effective access method for the underground mine and construction of Phase 1 began in mid 2011, with production on schedule to commence in mid-2013,” the company says in its report. Construction of 220 houses has been completed for staff. Power and water is being supplied by generators sourced from the mining lease area.

Earlier this year, coal miner African Energy reported the excavation of a bulk sample from the 320m box cut at its Sese thermal project, 50 km south west of Francistown. Coal from the bulk sample has been sent to South Africa to undertake the first combustion trials to confirm the characteristics for typical industrial users that form part of African Energy’s regional target market. This initial trial is a key step before undertaking further trials at specific industrial coal consumers in Botswana and neighbouring countries such as South Africa, Zambia and Namibia.

The company has appointed Industrial Coal Africa (ICA) as its coal marketing manager with the responsibility for marketing and logistics on the Sese Project. During the past six months, African Energy has been assessing option for exporting coal from Botswana to ports on the east and west coasts of Africa utilising the existing rail network that is in the region.

An agreement was reached with Botswana Railways to undertake a trial shipment of Sese coal to Matola Coal terminal at the east coast port of Maputo in Mozambique. The trial shipment successfully reached Matola in April via Zimbabwe and will help the company discover new markets in the Asian markets.

These small mining companies are expected to showcase their new developments at the Botswana Resource Sector conference to be held in a few weeks’ time proving that being a small miner can pay substantial rewards in the modern challenging mining landscape while conglomerates have become stagnant over the years.

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