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Send  Print  Share  RSS  Twitter  26 Feb 2011

MINING: Zuma Opens New Govt Mine

 

So instead of nationalisation, Zuma and his cronies are opening their own mines run by outsiders. No, of course that's not the nationalisation of mineral resources, stupid.

Ogies, Feb 26 (I-Net Bridge) - South Africa's President Jacob Zuma reiterated that government has made no provision in its policies to nationalise the country's mines, but stressed that this did not prevent it from “participating actively” in the mining industry.

Speaking at a sod turning ceremony to launch a state-owned mine at Vlakfontein in Ogies, Mpumalanga, on Saturday, Zuma said “we are happy” to launch this new company.

The Vlakfontein mine will be operated by African Exploration Mining and Finance Corporation (AEMFC), the state-owned mining company.

Officiating at the launch of the Vlakfontein mine, Zuma said AEMFC would improve the security of coal supply to Eskom, the electricity utility.

The president said the ultimate goal of the government was to consolidate all the state's mining assets under one umbrella.

“The state must actively participate in the mining industry,” Zuma said, adding that its role could no be confined to regulation.

He said South Africa had one of the richest resources of mineral wealth in the world, estimated at 18 trillion rand.

During his state of the nation address earlier this month, Zuma said government had endorsed AEMFC as the state-owned mining company that "will undertake the mining of minerals of strategic significance". These minerals include coal, lime and uranium.

During the initial years, the Vlakfontein mine would produce about 800,000 tons per year and this would increase to 1.68 million tons in the later years.

Sizwe Madondo, CEO of AEMFC, said nothing could stop the company from ramping up production to three million tons a year, adding that much depended on Eskom's appetite.

Madondo said the mine would start production in June 2011.

Central Energy Fund (CEF) Group of Companies, a state-owned entity that owns AEMFC, provided 130 million rand in capital expenditure and part of this capital would be used to build the crushing and screening plant, pollution control measures, power supply and other surface infrastructure.

Madondo said government's ownership of a mine was not a new phenomenon as the previous regime before 1994 also owned mining assets in the name of “security of supply”.

Energy Minister Dipuo Peters described the opening of the mine as a “milestone”. Peters said CEF needed to “baby-sit” AEMFC until it could stand on its own.

Madondo said AEMFC was engaged in contract negotiations with Eskom to supply its power stations with coal.

About 150-200, including contractors and own workers, will be employed during the mine construction phase. This count will reduce to about 120 when the mine is operational.

The total resources for the project are estimated at 56 million geological in situ tons, which includes an estimated six million tons of inferred resource, 33 million tons of indicated resource and 17 million tons of measured resource.

Over twenty exploration holes were drilled as part of the exploration and eight more are required to convert the entire resource into the measured category.

The Vlakfontein project is the “most advanced” of AEMFC's projects. It is near completion, the company said.

Madondo said the company was seeking to play a role in beneficiation and diversify into platinum group metals (PGMs).

In its annual report for 2010, CEF said AEMFC had made progress in building in-house drilling capacity, which formed the backbone of its exploration activities and it was anticipated to become operational in the 2010-11 financial year.

For the period, AEMFC posted a loss of 14 million rand (2009: 10 million rand).

Minister of Minerals and Resources, Susan Shabangu, was also present at the opening ceremony.

End

I-Net Bridge, Tel: +27-11-280-0832, newsdesk@inet.co.za

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