JOHANNESBURG (miningweekly.com) – Private investment company Menar, which is awaiting Competition Commission approval following its bid for the large Metalloys ferromanganese facility in Meyerton, is looking to restart at least two of the four furnaces on the site of what was once the world’s largest ferromanganese production facility before being shut in 2020.

Bringing two furnaces back online would provide the base for the production of 500 000 t/y of ferromanganese and require a feed of one-million tonnes of manganese ore from South African mines.

“When Samancor decided to close the operations, it was purely because of issues with power availability. Now with Eskom having surplus power, the opportunity is created for ferroalloy producers and Metalloys is one of them,” Menar MD Vuslat Bayoglu outlined to Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

Menar intends changing the name of Metalloys to Khwelamet.

Metalloys was once a producer of one-million tonnes a year of ferromanganese on a property that has a gas-fired power station, which Menar would like to revive in tandem with baseload from Eskom, waste-to-power generation and solar power generation.

“We’re hoping that by either the end of this year, or early next year, we’ll get Competition Commission approval if the authorities are happy with our application. If the numbers make sense, then we will hopefully restart the operations in the next 12 months. That’s the plan,” Bayoglu revealed.

“It’s critical to make the product as green as possible and in addition to restarting the ferromanganese furnaces, we’d like to create an energy complex in the area. Hopefully this project will keep us busy next year.

“If you think about the 16-million-tonne to 17-million-tonne export capacity from South African manganese mines, a million tonnes is a sizable amount for the mines to supply for ferromanganese production. Assmang decided to close its operation in Cato Ridge, in KwaZulu-Natal. Without it, there will be no ferromanganese production capacity in South Africa, so reviving Metalloys will ensure that the country still has capacity. It will also be great for employment opportunities within the Vereeniging and Meyerton areas,” Bayoglu added.

Menar’s portfolio of mining assets spans anthracite, coal, manganese, gold, and nickel.

Mining Weekly: Given the closeness to year-end, talk us through Menar’s 2024 highlights. 

Bayoglu: I’d like to start with what we achieved with our rehabilitation projects. The rehabilitation project at Singani Colliery is almost complete. We’re at the stage of dealing with the vegetation, and hopefully by quarter one of next year, we’ll be done. We’ve finished mining our resource at Phalanndwa, in Delmas, and we started rehabilitating the two pits there immediately. We’re hoping to be done with the first pit by the first quarter of next year, so we can start working on the second area, which we call the Madala pit. Hopefully, we will complete the work on the second pit by the end of next year. These are important highlights because these are environmental liabilities and we think that as a responsible miner, we should deal with the rehabilitation once the resource is depleted.

On the operational side, we were ramping up the Gugulethu Colliery in Hendrina, Mpumalanga, where last month we produced 150 000 t of run-of-mine (RoM) coal, and washed about 90 000 t. Hopefully, we’ll reach steady-state production in January, which will be 200 000 t of RoM.  We may reach it in December, depending on what happens with the rain because rain slows us down. We employ about 400 people at Gugulethu, which is the newest coal mine in the country and the plant is going to be washing about 200 000 t a month of coal. We’ve already started exporting. The washed product is transported to Rietkuil Siding and from there, we rail it to Richards Bay Coal Terminal (RBTC). This project was pledged as a commitment to President Cyril Ramaphosa’s investment drive and we’ve delivered on our commitment. At the other operational asset, Khanye Colliery, we’ve been mining 2.4-million tonnes per annum and we’re carrying on with that. At Khanye, the focus has been on optimising the resource, the pit, the roads. We cut the costs and we make sure that we’ve got a lower cost mine. We also have a great relationship with our community, with the companies that are benefiting by supplying us services and equipment.

At Kangra, we started mining the Uthingo and Udumo adits, which are connected to the Kusipongo reserve. We bought it from the previous owners, and they were not interested in developing the Kusipongo reserve. These two adits that we developed have three sections in total and we are producing about 130 000 t of RoM a month from them. Production is going very well at Kangra. We wash everything, and then we take it to Panbult Siding and rail it to RBCT. Through Uthingo and Udumo, we have access to a 50-million-tonne reserve area, which has extended Kangra’s life-of-mine (LoM). Once we have licensed the T4 project, we will have access to a larger reserve base that will further extend the LoM at Kangra, which is an important mine for the community in Piet Retief. We have surrounding communities like Driefontein, Donkerhoek and Pixley ka Seme in the area, which are very critical for us. The mine is also critical for them.

With operations at East Manganese nearing conclusion, we are confident that we have the requisite experience to develop the Kongoni underground project in Hotazel, in the Northern Cape, once we are ready to proceed. Extensive drilling and sampling conducted over the past two years have substantiated Kongoni’s viability. But the challenge with manganese is price. Kongoni is an underground project, and it needs the right manganese price, so we’ll wait for the right manganese price before going ahead with the project. It’s going to be a great project for South Africa. As we all know, South Africa’s opencast manganese mines are going to go underground at some stage. So Kongoni will have a better chance when those mines come to a point where their cost structures will be similar to Kongoni's cost structure.

We continue to drive social projects, to benefit communities located next to our mines. For example, Khanye recently trained 32 community members to operate yellow machinery and five of these individuals have been permanently hired at the mine as articulated dumper truck operators. We also completed the refurbishment project at the Mkhambi Primary School, which is near Khanye’s operations in Bronkhorstspruit. Social upliftment projects at Kangra are also going well. We are currently implementing the second phase of installing taps for households from eight farms near Kangra. About 240 households will benefit from this water initiative once it’s completed, so in general, 2024 was good for business and we’re hoping that 2025 is going to bring us more opportunities and more highlights,

What projects are attracting investment from Menar that are within the steelmaking and anthracite sectors?

Anthracite is interesting because unlike steam coal, it is less controversial because anthracite is important for steelmaking. There are considerations about using hydrogen to make the steel green, but that makes the cost of steel four times more expensive than existing costs. Until such time as humanity finds a solution regarding making it cost effective to use hydrogen for steelmaking, I think coke and anthracite will play an important role in reducing the oxygen in iron-ore or chrome or manganese.

The carbon content of anthracite that we produce in South Africa in different mines varies between 80% and 86%. KwaZulu-Natal is the main area that is producing anthracite. We have current operations, and investments, such as Umgala, and we’re planning to produce 100 000 t of RoM from that project. We’re waiting for the water-use licence application to be granted. We have other projects as well. We invested with some partners, and we have offtake agreements, so we have a portfolio of anthracite projects that we’re interested in developing and we’re currently in production.

But to inform you a little bit about the markets, after the Russia-Ukraine war started, certain companies, especially in Europe and the US, and also in East Asia, couldn’t buy Russian product because of the sanctions, so our product became important, and we are competing with Peruvian anthracite. But production costs in South Africa are quite high because we’re mining underground and we are not able to compete with Peruvian product to the level that we should. The Peruvian product is very brittle while South African product has got a quite competitive edge because it is hard anthracite, so we’re able to supply markets like Italy, Germany, Spain, US, Brazil, Vietnam and India. South Korea, Thailand and Taiwan are also buying South African product. It’s an interesting market with a valuable product, although it’s difficult to mine. But at the end of the day, it employs a lot of people. It creates a lot of procurement opportunities for the business people in local communities. It’s an exciting business for us, and we’re trying to be there with a sizable investment.

What is the outlook for steam coal in 2025?

Unlike International Energy Agencies’ forecast, steam coal production is going up in the world. China is the leading country, with four-billion tonnes a year, and about 50% of the coal production comes from China, which is heavily investing in coal-fired capacity. China continues building coal-fired capacity while at the same time being the largest solar panel manufacturer in the world. China is a very interesting example of using fossil fuel with the latest emission reduction technologies and then including solar and wind as a complementary capacity. South Africa has a lot to learn from that example. India is following the same path by building solar capacity and coal-fired capacity, so both India and China are consuming a lot of steam coal. The US and Europe are trying to minimise using fossil fuels but we see that there are interesting developments and people are starting to question the closure of coal-fired power in countries like Germany because their power prices have gone up drastically. In Italy people are asking the same questions. Why do we stop coal-fired power stations? What is going to replace coal-fired power stations? Do we have enough gas coming in? What’s going to happen? All these questions are critical, because Europe is a massive manufacturing base. Without affordable power prices, they’ll struggle, so steam coal looks to me to have a good future in the medium to short run, but I'm not sure about the long run. If there are big gas resources or gas reserves available, then we might look to shifting from coal to gas, but at the moment, India, China, are strongly supporting the steam coal fundamentals.