Orion Minerals – Copper-bottomed Prospects

Orion Mineral’s Prieska copper-zinc project in South Africa’s Northern Cape is shovel-ready.

Orion Minerals is a globally diversified metal explorer and developer which is on track to become a new generation base metals producer through the development of its flagship Prieska Copper-Zinc Project in South Africa’s Areachap geological terrane, Northern Cape.

The company came to South Africa in 2015, and since 2017 has intensified its focus on the region – a strategy that has paid off said CEO Errol Smart.

“We have come a long way in a short space of time. In less than five years we have been able to locate, acquire, drill out, complete a high-quality Bankable Feasibility Study and fully permit a world-class modern mine, to international best practice standards. We now have a fully licenced project – one of the few projects in the world of this scale that is actually shovel ready, ready to go into construction.”

“The achievement has been particularly pleasing as South Africa has the reputation of a difficult market, with very long regulatory processes. However, we have found the Northern Cape a very user-friendly operating environment, we have been welcomed as investors and have contributed significantly to community development here. Despite its reputation, we can work well in South Africa – we knew that we were coming into a very different physical operating environment so we have adjusted the business strategy accordingly. The results have been outstanding.”

The project has already seen over R450 million in foreign direct investment until now, and is at a stage to bring in further investment of over R5.4 billion over the next three years, as the mine is projected to deliver more than R40 billion in mineral exports over an initial twelve-year life.

“This is a clear demonstration of the potential of junior mining and exploration and the significant financial benefits that it can mobilise,” noted Mr Smart.

Mr Smart highlighted the fact that the company now has an updated Bankable Feasibility Study (BFS) which delivers numerous improvements on the previously completed study, including a 43% increase in undiscounted free cash flows to AUD1.6 billion.

“Those are very sound numbers and we are ready to go, after receiving the final mining rights in August. Now we have all of the permits and approvals for the annual production of 22,000 tonnes of copper and 70,000 tonnes of zinc over an initial 12-year mine life which it is hoped can be extended to 20 years with further exploration. Prieska has become one of the few shovel-ready copper projects of scale in the world.”

Focus on community

Mr Smart pointed out that the achievement would not be possible without the support of local, regional as well as national governments and a friendly host environment in particular.  Orion considers its relationships with local communities to be equally as important as the technical and commercial needs of the organisation.

“We have a clear focus on how to use our mine and the operation to the benefit of the community around us – that is the basis we have been operating on. We have talked to local communities on a regular basis from the start, organised meetings and provided regular information to people from the surrounding towns and villages to understand the core of the project and its value to the communities in the long term, to understand that it brings financial wellbeing to the region. And I think we have succeeded, we have never had any negative reaction to the project in the four years that we have been operating here.”

The updated BFS has enhanced the project’s environmental, social, and governance outcomes. Sustainable development goals have been planned at the forefront increasing the use of renewable energy and reducing the carbon footprint. Water conservation and recycling in the dry and arid conditions at the project are now maximised. The business plan provides a clear roadmap for progressive 4IR adoption, which should deliver high productivity and personal well-being gains to our workforce.

Mr Start affirmed that the focus on efficiency, safety and renewable energy has been strong. “In five years from now, we expect to employ electric vehicles which means reduced fumes, noise as well as temperatures. Renewals and advanced technologies allow for a completely different mining environment – from day one we have started to create an absolutely modern mine that is safe, healthy and user-friendly.”

Mining potential

Summarising the progress during the past five intensive years in South Africa, he reflected that the experience has been very interesting and most rewarding. “We have established a lot of strong relationships with stakeholders, making sure that they facilitate an efficient business engagement for this strategically important flagship project for South Africa. We are demonstrating what you can do in this country.”

“We have been happy with the development of our business in South Africa. The country has its challenges but it is no worse than a lot of other countries. I have to reinforce once again that we have experienced a welcoming and friendly environment.”

In concluding, Mr Smart reflected on the promising potential of the Northern Cape, a traditional but forgotten producer of copper, which is expected to see a revival in years to come. “The Northern Cape produced 2.5 million tonnes of copper in the previous century. Because of the history, politics and changing regulations they almost gave up on copper mining in the province although it is extremely promising from the geological perspective. We see the potential for the Northern Cape to be a producer of 720,000 tonnes of copper a year. I think there is going to be a lot of development of mining in the years to come and we are proud to have basically opened the door to that development.”

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