Orion’s R5.3bn copper and zinc mine a step closer
The Prieska project will boost SA’s copper and zinc output sharply when the mine comes into production by 2024
Orion Minerals expects its Prieska mine, which will be in production from 2024, to boost SA's copper production by a third and its zinc output by half.
The Prieska mine in the Northern Cape, which was halted 30 years ago, will be restarted in a R5.3bn project that is likely to attract a partner for the Australian company.
Orion, which is listed on the Sydney and Johannesburg bourses, released an updated bankable feasibility study, which shows the total establishment cost rising by 5%. It changes the way it deals with fluid coming from dewatering the mine and switches to an owner-mining model instead of a contractor.
Based on the outline for the first 11 years and six months of the project, which will repay its investment in 28 months, Prieska will provide a significant lift to SA’s base metals output. It will on average produce 59,130 tonnes a year of zinc in concentrate compared to SA’s output of 115,000 tonnes in 2019, according to Minerals Council SA data. It will generate 19,652 tonnes of copper annually, compared to the 56,000 tonnes SA produces from primary copper mines as well as the by-product of platinum group metals mining.
“This feasibility study has delivered some really good numbers. This is a solid project by world standards,” Orion CEO Errol Smart said in an interview. The project is like nothing else in the world, with the 900m shaft sunk and lateral tunnels waiting to be used once the mine is pumped clear of water.
“We have all the infrastructure. We have power, water, roads and a nearby rail siding despite being remote. The shaft and declines are in exceptional condition,” Smart said. “Not only that, we have an orebody that is a 2.5km long, uninterrupted, continuous slab of mineralisation averaging 9m wide. You just don’t get orebodies like this. People normally mine scattered slabs of orebodies,” he said.
One of the big changes to the project is the way the water from the mine will be handled. Originally, Orion was going to try to evaporate it but it has now opted for a water treatment plant to raise its quality to agricultural standards for the irrigation of crops and livestock as well as for use on the mine. Much interest has been received from third parties and empowerment partners wanting to build a modular plant to treat the water and then charge Orion a fee.
Orion has decided to do the mining itself, so it has increased expenditure on mining equipment to R576m from R450m. “We are believers in the mining abilities of South Africa and there are a lot of mechanised miners in the country now. We don’t have to rely on contractors or foreign companies to do it for us,” said Smart.
The mine will employ 840 people when it reaches steady-state production. During construction it will have 1,200 people in employ.
Orion is in intensive talks with third parties to build a 55MW wind and solar energy plant to provide the mine with the 35MW it needs. The government has said companies can build renewable energy plants of any size as long as it was for self-consumption, which is what Orion plans.
The cost of the plant will be picked up by the third party, with Orion paying a fee for electricity that would be cheaper than that provided from Eskom, the state-owned monopoly.