Mining: industry suffers from power cuts; new uranium prospects in Northern Cape

Eskom has been causing headaches for South African mining for some time now, and the latest figures suggest it may continue for some time still.

Production decreased by 1.9% year-on-year in September 2023, with diamonds, ‘other’ metallic minerals, and manganese ore being the most affected, though platinum group metals managed to grow despite adverse conditions.

With seasonal adjustments, mining production dropped by 0.3% in September compared to August 2023, and sales at current prices declined by 20.2% year-on-year in September 2023. Coal, gold, platinum group metals, and ‘other’ metallic minerals saw significant drops in sales.

Seasonally adjusted mineral sales at current prices decreased by 4.7% in September compared to August 2023.

Goldplat, a UK-listed gold recovery company, reports a £77,000 year-on-year drop in operating profit for Q1 2024, and has directly attribute this to power disruptions. Its operating profits in South Africa’s decreased to £759,000, while their receipts in Ghana increased to £1.11 million.

So far 21 operating days were lost due to electricity cuts and infrastructure issues, prompting the investment in diesel generators for sustained operations.

Goldplat estimates the need for £1.3 million, excluding £750,000 for generators, for repairs, maintenance, TSF completion, and environmental improvements.

The company hopes to push ahead with diversification into other commodities and regions, with feasibility studies into fine coal recovery technology, as a means of hedging against local infrastructure decay.

Goldplat CEO Werner Klingenberg emphasizes the focus on strengthening relationships outside of South Africa, and into other minerals to achieve sustainability.

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Cape Uranium

However, not all is going downhill in the sector, as Neo Energy Metals PLC raised £500,000 through the subscription of 40.0 million new shares at 1.25 pence each after its London listing.

The company, focused on uranium development in South Africa, listed in London with 1.22 billion shares admitted for trading and a starting market capitalization of around £15 million after a reverse takeover process.

Neo Energy Metals’ initial focus is on the Henkries low-cost uranium project in South Africa, with an estimated mineral resource of 4.7 million pounds of uranium.

The demand for uranium is rising globally with new nuclear power plants, particularly in Asia. Disruptions of supply following the military coups in Uranium-rich regions in the Sahel, especially Niger, has increased demand somewhat for the radioactive fuel mineral.

The company sees potential for new uranium discoveries, with less than 10% of prospective ground in the Cape uranium fields fully tested.

The additional funding highlights strong investor confidence in the company’s business model, assets, and future prospects, according to CEO Sean Heathcote.

Following admission to the Main Market of the London Stock Exchange, Neo Energy Metals will have 1.26 billion shares in issue.

The Northern Cape and parts of the Western Cape have some of the richest deposits in the region, though there is much concern about the environmental impact on the delicate Karoo ecosystem.

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