By Allan Seccombe, Business Day Live. Photo: Thinkstock
Botswana mines minister Onkokame Kitso Mokaila anxious for the transaction to be concluded
AFRICAN Rainbow Minerals (ARM) and Norilsk Nickel Africa should conclude an agreement in the next two months to send nickel concentrate to SA’s neighbour for smelting, clearing the way for the next stage of a $337m deal.
State-owned Botswana Copper Limited is buying Norilsk Nickel’s stake in the Nkomati Nickel mine in Mpumalanga and Botswana mines minister Onkokame Kitso Mokaila is anxious for the transaction, unveiled last October, to be concluded.
Mr Mokaila has written to SA Mineral Resources Minister Mosebenzi Zwane, asking him to expedite the transfer of mineral rights once ARM has made the application under Section 11 of the Mineral and Petroleum Resources Development Act.
ARM would be in a position to file the application once the concentrate agreement was in place, CEO Mike Schmidt said on Friday.
JSE-listed ARM, a diversified miner, was in talks with Norilsk Nickel about an agreement to send nickel concentrate for treatment at its Selebi Phikwe smelting complex in Botswana and those talks were well advanced, he said.
"We have to get technical and commercial agreements in place and we are far advanced.
"I’m of the opinion that in the next month or two, there should be an acceptable deal on the table," he said.
Each smelter is unique and part of the technical work is to ensure Nkomati’s concentrate is a good fit with Botswana Copper’s operations. Botswana Copper intends to build a nickel refinery to become a hub for treatment of the metal.
Nkomati did not have the critical mass or critical life of mine to sustain a refinery, Mr Schmidt said, adding the mine had reserves for 10 more years of mining.
While there were resources to tap into, these would need an underground operation and higher nickel price, he said.
Nkomati Nickel produces about 20,000 tonnes a year of nickel in concentrate. It also produces about 110,000 oz a year of platinum group metals, 1,000 tonnes of cobalt and 9,000 tonnes of copper.