Base and Energy Metals
Copper, iron, zinc, vanadium and uranium
Base metals: Zinc, copper and iron
Base metal prices increased throughout 2020 and 2021 due to the recovery in demand coupled with liquidity in global markets. Copper hit an all-time high of US$10,460 per tonne in May 2021. Meanwhile, zinc, the galvanizing metal, was in oversupply before the pandemic but is witnessing a positive outlook due to increased demand from China and supply constraints.
Australian-explorer and developer Orion Minerals owns a significant copper-zinc deposit at its Prieska mine. The project is fully permitted and ready for construction, it only lacks funding, which should be finalized by Q3 of 2021. "By combining the Prieska project, producing approximately 22,000 mt/y copper, and the Okiep project, Orion Minerals is on a path to producing more than 50,000 mt/y," commented Errol Smart, managing director and CEO of Orion Minerals.
In Namibia, emerging copper producer Trigon Metals is constructing the open-pit Kombat mine, from which it expects its first concentrates before the end of 2021. The mine's forecasted production is 4,000 mt/y. "Because Kombat was operating previously and the main infrastructure is already in place, our production costs are low. We have higher grade resources underground, but the operation is starting as open-pit," elaborated Trigon's president and CEO: Jed Richardson.
“Vanadium demand is underpinned by its use in steel and demand is expected to grow at a rate of 2.7% through to at least 2030. According to Roskill, VRFBs are expected to increase vanadium demand by a CAGR of 56.7% by 2030.”
Fortune Mojapelo, CEO, Bushveld Minerals
Also in Namibia is the cornerstone underground zinc and lead Rosh Pinah mine, operated by Trevali Mining. In 2020, the mine achieved the highest milled tonnes in its history. Another milestone reached in 2020 was the completion of the PFS for the mine's US$93 million expansion project, indicating possible project completion in 2022. However, the Feasibility Study, published in August of 2021, indicated the execution of the expansion is expected to be from 2022 onwards, spread over 24-36 months. "Once expanded, Rosh Pinah will be a world-class asset as we are investing in modern mining techniques and technology," explained Ricus Grimbeek, president and CEO of Trevali. "For example, systems were put into place in the processing plant to automate the recovery process. We are also operating a semi-autonomous front-end loader underground, enhancing safety and optimizing the loading time."
Another base metal with exciting prospects is iron ore, which witnessed a price increase of 16% year-on-year in 2020. Iron ore mining contributes around 12% of mining volumes in South Africa, according to the Minerals Council. As economies restarted after the pandemic, there was a shortage of iron ore supply that has led to a sharp price increase of the metal.
In South Africa, the leading iron producer is Anglo American's Kumba Iron Ore, which operates the Sishen and Kolomela mines. In 2020, Kumba's production decreased by 16% year-on-year to 9.57 million mt. The company is planning a US$246 million investment in its Sishen mine to extend its life to 2040. "We are also developing our Kapstevel South mine at Kolomela while continuing our exploration programme in the Northern Cape as we develop our resource pipeline," announced CEO of Kumba, Themba Mkhwanazi.
Namibia hosts a small iron ore mining industry, with Lodestone's Dordabis leading the way. Lodestone Namibia is the country's first operational iron ore mine with a JORC resource base. Its Dordabis project is located 75 km southeast of the capital city Windhoek. It will be an open-pit operation using conventional gravity and magnetic separation processing route to produce 2.5 million mt/y of high-grade iron ore concentrates (68% Fe) with an expected life of mine of over 17 years. “We hope to start construction on the plant for the demonstration phase in early 2022, with production commencing late in the year," said Emmeric Angermund, CFO of Lodestone.
In addition to its vast platinum resources, the Bushveld Complex in South Africa is also home to high-grade primary vanadium deposits, making it the third-largest vanadium producing country after China and Russia. Historically, vanadium supply and demand has been coupled with that of steel, since vanadium is added to steel to improve its properties, which accounted for 92% of its demand in 2019. However, the long-term growth prospects for the metal are also driven by demand for Vanadium Redox Flow Batteries (VRFBs), which compete with lithium-ion batteries. It is anticipated that by 2025, demand will outperform supply by at least 20,000 tons per year. “According to Roskill, VRFBs are expected to increase vanadium demand by a CAGR of 56.7% by 2030, and today, supply is already becoming constrained and there is limited new supply expected from greenfield projects given high barriers to entry, ” commented Fortune Mojapelo, CEO, Bushveld Minerals. “The medium to long-term market fundamentals of vanadium remain attractive and existing primary producers such as Bushveld Minerals are best positioned to deliver new supply.”
Vanadium mining in South Africa is dominated by junior players, such as Bushveld Minerals, Vanadium Resources and Ironveld. Vanadium Resources' Steelpoordrift project is the world's largest vanadium deposit. Measured, indicated and inferred resource currently stands at 660 million mt, with 350 million mt in the measured and indicated categories. "The resource is also extremely high-grade with an in-situ grade of approximately 0.74%, compared to other deposits with an average in situ grade of roughly 0.50%," added CEO Eugene Nel.
Meanwhile, the vertically integrated Bushveld Minerals' resource base is approximately 550 million mt, operated by its subsidiary Bushveld Vanadium. The LSE-listed company is also developing the world's largest electrolyte plant outside of China. “We are leveraging our low-cost scalable production base to build a leading downstream vanadium-based energy storage platform to enable us to play a key role across the VRFB value chain,” highlighted Mojapelo. “We commenced with building an electrolyte manufacturing plant that will see us produce electrolytes for the vanadium redox flow batteries (VRFB) market.”
“Our proprietary U-pgrade process is a beneficiation process that increases the grade prior to leaching by removing the bulk of the non-bearing uranium minerals, reducing the mass through the process to the point where we have less than 5% of the mass going to the leaching stage.”
Murray Hill, Managing Director & CEO, Elevate Uranium
The radioactive metal was a top performer in the first half of 2020, mainly due to global supply disruptions in Canada and Kazakhstan.
Uranium mining is of considerable importance to Namibia's mining industry, as the country's uranium mines supply 10% of global uranium production. From 2000 to 2018, uranium was only second to diamond mining in its contribution to GDP, according to the Namibian National Planning Commission (NPC). Namibia was ranked as the fifth-largest uranium producer in the world in 2018.
Namibia's largest operating uranium mining companies are Swakop Uranium, majority-owned by China General Nuclear, Rössing Uranium, Langer Heinrich Uranium and Orano Mining Namibia. Uranium-focused juniors include Bannerman Mining Resources, Reptile Uranium and Elevate Uranium.
Bannerman Mining Resources' Etango-8 project completed its scoping study in 2020. The project's initial studies in 2015 envisioned a 20 million mt/y throughput, however, it is to be developed as an 8 million mt/y operation instead, which decreases capital costs significantly. "We are at the end of a PFS which is expected to deliver approximately 3.5 million pounds of triuranium octoxide per year over an initial operating life of about 15 years," highlighted Werner Ewald, managing director of Bannerman.
The company raised A$12 million in early 2021 to finance taking the project forward to a definitive level.
2020 was also a pivotal year for ASX-listed Elevate Uranium, formerly Marenica Energy, which made two discoveries at the Hirabeb and Koppies projects. The company raised A$5.4 million in November 2020, which will fund exploration campaigns in Namibia and define drill targets.
Elevate's unique patented beneficiation process, known as U-pgrade, decreases capital and operational costs by 50% relative to conventional processing, according to Elevate's managing director, Murray Hill. "It increases the grade prior to leaching by removing the bulk of the non-bearing uranium minerals, reducing the mass through the process to the point where we have less than 5% of the mass going to the leaching stage," elaborated Hill.
Image courtesy of Vedanta Zinc International