Kudumane Manganese Resources – Mining for Local Value

Kudumane Manganese Resources operates one of the largest mines of its type in the world, but its priority is to leave a local legacy.

Since it went into operation in 2012, the company has risen to be in the top five producers in South Africa, as well as the top eight globally. Their current operations in Farm York and Hotazel are producing approximately 2 million tonnes of manganese ore per year, and once the open-castable resource in this operation has been depleted an underground operation at Farm Telele will be introduced. The main components of the current operation consist of two open-pit mines, a crushing and screening plant, mine residue disposal and storage facilities, and various support infrastructure and services. Across its operational mines, Kudumane is employing over 1,000 people while also working with Asia Minerals Limited in Hong Kong to handle marketing & distribution.

While the operation’s open-pit mining is expected to have a life-of-mine of 15 years, underground mining is expected to extend that by over 100 years.

Kudumane Manganese Resources is a formidable operation in its own right, but the company is also able to draw on wider resources thanks to its position as part of the Asia Minerals Limited Group with their head office in Hong Kong, with operations in Japan, Ukraine, India, Korea, the US, and China. Including a Smelting Operation in Malaysia.

“What sets us apart is through our relationship with Asia Minerals we’re not a producer that really sells in the spot market. We build long-term relationships with our customers with most of our sales going through frame contracts,” says Thembelani Gantsho, CEO of the mining company. “At the start of the year approximately 95% of our sales are already committed and we keep the same customers year-in-year-out. We look to relationships with customers.”

Keeping it Local

Kudumane Manganese Resources isn’t simply about extracting value from the land, however. It is a core principle of the company that local communities benefit from the work the company does, and to this end, the company has worked hard on drawing talent from the surrounding area.

“We focus on ensuring we hire locally. Of our total workforce, 80% is locally employed,” Gantsho tells us. “Now there are challenges at times in hiring more senior staff from within the local community and then we have had to look outside of those communities to find those employees, but wherever possible we make sure our workforce comes from the local communities and our sub-contractors adhere to this policy as well.”

For Gantsho, this isn’t just about employing local people. It’s also about investing in and building on the local talent pool.

As he explains, “It’s a commitment we’ve made to regulators. We spent a lot of resources in training our employees and providing programs for local communities including students through bursaries and learnerships.”

KMR commits a total of 10% to the Community Trust, Employee Trusts, and SA Societies & Northern Trust.”

Of course, like mining operations all around the world, Kudumane Manganese Resources has had to protect its people and reassess the way it works in the wake of the COVID-19 crisis.

“Currently, the biggest challenge is operating within the COVID-19 environment. It’s brought about new challenges and new ways of thinking about business,” Gantsho points out. “How does one still keep to the required level of operational efficiency with increased regulation and oversight?”

For Gantsho the answer comes down to the human resources the company has worked so hard to develop.

“One of the key components is our human capital. That is very important in terms of our ability to make sure we deliver on our commitments to our shareholders,” Gantsho says. “The fact that South Africa went into a hard lockdown in early March allowed us to put in place measures to bring back the workforce in a safer environment.”

Spirit of Collaboration

This safer environment has also been made possible thanks to collaborations with a range of government and industry bodies and agencies.

“We’ve been working with the Mineral Council for guidelines, but our teams have worked hard to put in place contingency strategies that ensure we compartmentalise shifts. If there is an infection it is contained within that shift,” says Gantsho. “They can be put into isolation for the required period while another shift comes in. That is how we’ve managed while working with regulatory authorities to ensure we comply and put best practices in place.”

Indeed, with Kudumane Manganese Resources being positioned where it is, Gantsho foresees collaboration as an important part of the company’s strategy moving forward.

“We’ve moved from a place where we’re building and consolidating those gains, we’ve made to a position where we’re becoming more efficient. We’re looking at how we can extend the life of mine, finding collaborations with our neighbours, looking for synergies,” Gantsho explains. “That is a focus for the short to medium term of the business.”

It may seem odd to work with companies that, in some ways, could be seen as competitors, but Gantsho is keen to find ways to create win-win scenarios for all concerned.

“There are a number of producers coming on board which we can collaborate with  and where they can invest less by collaborating with us,” he tells us. As Gantsho points out, it all comes back to trying to build something that will ultimately benefit local communities.

“From a South African perspective, all producers have a role to play in ensuring we add to the benefit and growth of local communities,” Gantsho insists. “Whenever we are done mining, we want to leave a lasting legacy in those communities. That’s one of our driving forces. We’re not just extractors of materials.”

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