18 April 2018
Publication: SA Mining
Date: March/April 2018
Ian Harebottle, CEO designate of Kropz, is already scoping Africa for potential phosphate expansion opportunities, this even before Kropz’s flagship project – Elandsfontein mine on the West Coast of South Africa – comes into production.
Harebottle, the former CEO of Gemfields, was instrumental in lifting the profile of coloured gemstones into a sought-after commodity and in growing Gemfields’ African footprint. Harebottle believes that the low-price phosphate environment offers Kropz the opportunity to expand its geographical footprint. “We want to be the Glencore of plant nutrients,” Harebottle said when he shared his vision of Kropz, an explorer, developer and miner of plant nutrient minerals.
Kropz will look to expand its phosphate footprint across sub-Saharan Africa, with Ghana signalled as its first area of opportunity.
Further, as the company moves from explorer and producer to product sales, Kropz will look to establish relationships with clients and peers in the sector, including Foskor, South Africa’s largest and only vertically integrated phosphate producer. It also wants to develop symbiotic relationships with international phosphate players, such as US phosphate producer The Mosaic Company, among others.
Harebottle explains that Kropz is being positioned as an “independent champion in the scarce resource market – a market which is dominated by large players, including parastatals and conglomerates”.
ELANDSFONTEIN – A PHOSPHATE PRODUCER BY YEAR-END?
Meanwhile, Kropz is confident that it will be able to deliver first ore from its Elandsfontein mine by year-end.
However, bringing Elandsfontein into production has not been without its challenges, he says. Key among these have been a large number of environmental challenges, including appeals against its mining right and integrated water use licence by the West Coast Environmental Protection Association. Further challenges include process plant glitches which saw the team “go back to the drawing board to deliver a more sustainable processing option”.
According to Michelle Lawrence, technical director of the Elandsfontein Phosphate Project, aside from the licences that are awaiting the minister’s ruling, the project is fully compliant with all permits in place.
Apart from finalising the process plant design, Kropz will in the near term also focus on raising additional capital required to bring the 1.35mt phosphate rock concentrate project to market.
The Elandsfontein project, which is located on the largest sedimentary deposit in the country, has a life of mine of 15 years.
Aside from being positioned as a lowest quartile cost producer with significant long-term growth potential, it has “all major contracts in place” (mining, plant operations and concentrate haulage) and off-take agreements.
PHOSPHATE – A STRATEGIC MINERAL
Mined phosphate, a strategic mineral to South Africa owing to its limited availability, is an essential element for plant and animal nutrition. In an earlier interview Lawrence explained that of the 210mtpa global production, South Africa only produced 1.7mtpa, which came from two operations – Foskor’s phosphate rock mine and Palabora Mining Company.
South Africa imported over 60% of fertiliser in 2015, valued at R7.3 billion, she says – and given the growing population both in South Africa and Africa, there will be more pressure on arable land to increase crop yield to feed the growing population.
Given the expected recovery of the fertiliser market by 2019, the Elandsfontein project is well placed to benefit from higher fertiliser prices when it comes into production at the end of the year, the company says.
Kropz has already secured off-take agreements with clients in South America, Australia, New Zealand and India (currently the largest importers of phosphate rock in the world).
Kropz Elandsfontein is owned 70% owned by mining entrepreneur Mike Nunn, developer of the former Tanzanite One; 5% by local black economic empowerment (BEE) group Ubuntu-Botho Investments; and 25% by Patrice Motsepe’s African Rainbow Capital. PRECIOUS POTENTIAL ENDEAVOUR FOCUSES ON FINDING MORE OUNCES crop yield to feed the growing population.