consolidation still coming

Wesizwe says platinum mine plans on target

March 8 2012 at 05:00am
Dineo Faku

PLANS to develop and grow Wesizwe Platinum’s Frischgewaagd-Ledig mine in the North West were proceeding on time, and on budget, group chief executive Jianke Gao said yesterday.

“At the same time we are working on other projects to expand Wesizwe, we are looking at cash generating projects. It is possible that we can establish joint ventures or acquisitions in southern Africa, but it will depend on opportunities we encounter,” he said.

Wesizwe is a junior mining company whose sole asset is the Frischgewaagd-Ledig mine in the Bushveld Complex, which is under construction. The company expects to start mining by 2018, and ramp up production to 350 000 ounces of platinum a year, with the life expectancy of the mine being 35 years.

It received an $877 million (R6.7 billion) injection from the Jinchuan Group, a Chinese consortium with global interests. Jinchuan, the biggest nickel producer in China, owns 45 percent of Wesizwe.

Gao said the Wesizwe strategy would be announced in June after approvals from board members.

The platinum sector has experienced increasing costs and the platinum price has come under pressure, which means that Wesizwe will have to revise its capital expenditure for the project.

Corporate Solutions mining analyst Peter Major said Wesizwe “has a bigger wallet and they are in a good position to take stakes in junior companies if they wish to do so”.

Gao said he was confident of a better future for the firm.

“We have a good asset and good management, we are confident that the market conditions will improve. Mining production will start only in 2018, and by then the world economy would have picked up, and there would have been a strong recovery in the industry because of demand for autocatalytic converters,” he said.

He asserted that only locals would be employed at the mine, with a handful of experts from China filling posts on a temporary basis. It would have 3 500 workers at full production.

Before his appointment at Wesizwe in May, the Chinese-born Gao managed Jinchuan operations in Zambia.

Wesizwe shares ended unchanged at R1.35 yesterday.