Orion eyes tie-up with Vedanta smelter
The JSE-listed miner says tying up a deal with Vedanta's planned zinc smelter would be 'first prize'
By 2021, SA could have a new R2.6bn zinc and copper mine rising out of the footprint left behind in the early 1990s by Anglovaal Mining, creating momentum for the Northern Cape to become a major zinc hub.
While definitive numbers on capital expenditure and production levels are only due before June 2019, the indications are that Sydney- and Johannesburg-listed Orion Minerals has a robust project on its hands resurrecting the Prieska mine south of Upington in the Northern Cape, said COO Walter Shamu.
The 1km deep workings with 37km of tunnels is flooded and it will take up to two years to drain the mine, with Orion developing plans on how to dispose of the water, including evaporation.
In that time, a new processing plant to generate powdered copper and zinc concentrate, new winders, buildings and refurbished shaft will be completed. There is also the opportunity to start an open-pit mine to extract 1-million tons of ore near the 68m-high concrete headgear.
By 1984, Anglovaal, realising the massive ore body had started curving upwards again in a giant roll, opted not to reinvest in new machines, mine designs and mining development to extract the depths of the ore body and closed the mine in 1991.
It is this curving portion of the ore body that contains an estimated 27-million tons of mineralised deposit, grading 3.8% zinc and 1.2% copper. This would deliver about 1-million tons of zinc and 360,000 tons of copper.
India’s diversified miner Vedanta Resources, which operates the Gamsberg mine to the west where it has plans to lift annual production to 600,000 tons of zinc, wants to build an $800m smelter, processing not only Gamsberg concentrate but that from its Skorpion mine in Namibia.
The smelter could take a long time to build as Vedanta would need to come up with a solution to power it given the shortage of electricity in SA and the environmental sensitivities in the Northern Cape. This smelter could play an important role for other zinc operators in the Northern Cape.
“SA doesn’t have a zinc smelter, so when we look to sell our concentrate we have to go outside the country. If we could ship it a few hundred kilometres and not put it on a ship and compete on the market it would be first prize for us. There’s definitely room for synergies,” Shamu said.
Based on the metallurgical test work on the Prieska deposit and the past quality of the zinc and copper concentrates with its low levels of contaminants not only made it sought after by offshore smelters, but “would work well” with the concentrate coming from Vedanta, he said.
Once the Prieska mine had been restarted, there were other deposits nearby and further afield that were attracting Orion’s attention and there were hopes of replicating Prieska, which was in the top 30 of global volcanic massive sulphides, the name given to the type of deposit Orion is targeting, Shamu said.
There is a 41-million ton tailings dump rich in pyrites, which would lend itself to making fertiliser, but this would be a long time in the future, he said.