The “iron lady” of South African mining, Daphne Mashile-Nkosi, says the open pit launched by her Kalagadi Manganese mining company last week will make it the country’s largest exporter of beneficiated manganese, one of the most sought-after critical minerals in the world.
“Our open pit takes Kalagadi to a different level, it’s a game changer for us,” she says.
The new mine, together with a sinter plant that will process its output, is the realisation of a vision she has pursued since becoming South Africa’s first new-order licensee to sink an underground shaft, which she did near Hotazel in the Northern Cape 16 years ago.
“It’s been tough, but I knew when I started it [would be],” says Mashile-Nkosi, who has a reputation as one of the toughest, most combative miners in the industry. “I’m assertive, I stand my ground, I don’t take nonsense from anybody. Sometimes you have to stick to your guns. Unfortunately, we live in a country where, as a woman, I’m expected to be submissive.”
I don’t take nonsense from anybody. Sometimes you have to stick to your guns. Unfortunately, we live in a country where, as a woman, I’m expected to be submissive
After taking over the running of the Kalagadi mine after her husband and co-founder, former Robben Island prisoner Stanley Nqobizizwe Nkosi, died in 2008, she was written off as a widow without a clue.
“Our proposals were rejected, our efforts brushed aside.”
Undaunted, she sank a 385m vertical shaft in 2009, the only one of the post-1994 new-order licensees to have done so, she says. But by 2012, she realised that exporting raw manganese at low prices was a mug’s game, and commissioned a sinter plant that produces low-volatile, high-grade manganese used for steel production and increasingly for batteries.
Kalagadi has been selling beneficiated manganese from its sinter plant into international markets, becoming, she says, the biggest sinter exporter to China.
But the 100,000t the underground mine produces every month is way below the sinter plant’s 3Mt per annum design capacity. Hence the open pit, which will produce 160,000t a month.
“Between the two, I’ll be producing around 300,000t. Probably by next year, I’ll be the biggest producer of sintered, low-volatile high-grade manganese in South Africa.”
Its superior grade makes it highly sought after, she says.
“People are looking for it, we don’t have enough to feed demand. We’re going to be the last man standing if the manganese price is low because our product is of a higher grade, 45%, 46%. Everyone else is 42% and below.”
Surplus manganese that can’t be fed into the sinter plant will be sold as raw ore. But such is the price differential — $125/t for ore vs about $160/t for sintered manganese — that she’s determined to ramp up sinter production from 1.6Mt a year to the plant’s full design capacity.
The only thing that can spoil the party is the crippling level of Eskom tariffs. Globally superior the product may be, but remaining competitive at these levels is “tough”.
Her team met electricity minister Kgosientsho Ramakgopa this week and handed him a study showing how much they’ve lost because of Eskom tariffs. “How many smelters have shut down or are in care and maintenance because of these tariffs? We need to deal with this issue urgently.”
Mashile-Nkosi points out that her sinter plant, the largest in the world in terms of output, uses the same energy as a smelter.
“So we need lower tariffs if the government really wants us to beneficiate. These tariffs don’t augur well for South Africa Inc. If you sell raw ore, it means the specialised skills we’re developing, your metallurgists, artisans, mechanical engineers, process engineers, will be sitting without jobs. Because at some point, if there is no intervention from the government, our sinter plant will shut down. We’ll be exporting jobs, which will not assist the economy of the country.”
Another example of South Africa’s economic self-harm, she says, is the entirely foreseeable and avoidable fate of steel producer ArcelorMittal.
“I find it strange that as South Africans we have Arcelor shutting down because of cheap Chinese imports being dumped here, because all the components of making steel are in South Africa, including manganese.
“What’s wrong with us when we have the skills, when we knew this was the backbone of our industry?”
When she advertises for artisans, she gets hundreds of CVs from Vereeniging, Vanderbijlpark and Newcastle — the centres where ArcelorMittal has plants.
Mashile-Nkosi has had a fraught relationship with Arcelor, her once 50% shareholder, and with her oldest and biggest funder, the Industrial Development Corporation. “We still have a problem with the IDC, but we’re talking at least. A new management and board that are coming in will have to try and resolve the issue.”
She has no investors for Kalagadi’s open pit, which is self-funded.
“We can’t afford to attract private investors because once your balance sheet is what it is, we are unable to raise capital. So we are a cash business at Kalagadi. What we sell today, we use to buy machines and equipment to open the pit. We’ve managed to do that and we’ve survived.”
For more than five years she’s been fighting attempts by the IDC to force her company into business rescue because of a R7.1bn debt owed 50-50 to IDC and African Development Bank, which the IDC has argued she’s in no position to repay.
“We’ve gone to court to try and get that restructured. We gave IDC a proposal last year in October, but they have not responded as yet. Hopefully, that’s because of their own internal problems. Maybe the new board and management are still applying their minds.
“But even now, we’re unstoppable. We are going to do well with or without them. The Kalahari basin represents 85% of manganese reserves in the world and I am right in the belly of the basin.”
Revenue from her open pit and the sinter plant it feeds will enable her to begin repaying her debt. She has achieved her dream and confounded her doubters, she says.
“I have not only seen the mountaintop, I am there.”
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