Works starts on new Fluorspar Mine

Works starts on new Fluorspar Mine

Nokeng Fluorspar Mine, a wholly owned subsidiary of SepFluor Limited, has announced the start of construction of the R1.7-billion Nokeng open pit fluorspar mine and concentrator at Rust de Winter, 80km north east of Pretoria.

Project finance has been raised through a mixture of debt and shareholder equity. 

Key equity participants include:

  • The African Minerals Exploration and Development Fund II SICAR (AMED II), a private equity fund managed by Explora (Luxembourg) and founded by South African mining entrepreneurs David Twist and Rudolph de Bruin, with Italian financier Carlo Baravalle;
  • Ixofluor, backed by the Lelau Mohuba Trust and headed by Sephaku Holdings founder and CEO Dr Lelau Mohuba;
  • Traxys Projects LP, the projects division of commodities trader Traxys Europe SA (Traxys); and
  • Funds managed by two of AMED II’s investors, Kuramo Capital and Tribus Capital.

The finance component of the project was arranged by Fieldstone Africa (Pty) Limited and comprises a consortium of three primary lenders:

  • Nedbank Limited as lender and facility agent;
  • Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden NV (FMO); and
  • Deutsche Investitions Und Entwicklungsgesellschaft mbH (DEG).

In addition, Concentrate Capital partners (CCP), a small investment fund associated with the engineering procurement construction (EPC) contractor DRA, has provided a small tranche of mezzanine debt. The Department of Trade and Industry (DTI) has approved an infrastructure grant of R21-million under its Critical Infrastructure Programme (CIP), primarily as a contribution towards power supply and road works.

A joint venture comprising DRA Projects SA (Pty) Limited and Group 5 Construction Limited has been awarded the EPC contract for the mine, which includes the concentrator, access roads and the ‘selfbuild’ portion of a power supply agreement concluded with Eskom. This involves the construction of a new 14km, 132kv overhead power line. Water supply to the site will be from a newly established wellfield.

Construction is expected to be concluded within a 21-month period, with commissioning beginning in November 2018 and first production in January/February 2019. At an average run-of-mine rate of 630 000tpa, the mine will produce 180 000tpa of acid grade fluorspar and 30 000tpa of metallurgical grade fluorspar.

With a total SAMREC-compliant reserve of 12.18Mt, Nokeng has an estimated life of mine of 19 years. More than 300 fixed-term jobs will be created in the construction phase and 200 permanent jobs once the mine is in operation. 

A significant portion of the early production has been pre-sold to several international fluorspar consumers who have been strongly supportive of the project and its development. A long-term agreement has been concluded with Traxys, which has a significant presence in South Africa, for the marketing and distribution of Nokeng’s production.

 

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