THE MINERAL ABUNDANCE OF THE LIMPOPO PROVINCE –

REPUBLIC OF SOUTH AFRICAPresented By: Oliver BarkerFor:LIMPOPO ECONOMIC DEVELOPMENT AGENCY (LEDA)

LIMPOPO MINERALS CONFERENCE AND TRADE SHOW

2015

Outline of talk1. Introduction – Overview2. Focus – The Mineral Resources of Limpopo3. The Platinum Industry4. The Coal Industry5. Chrome and Chromium6. Base Metals – Copper - Iron Ore – Vanadium7. Industrial Minerals – Andalusite – Phosphate -

Mica and Feldspar8. Dimension Stone and Limestone 9. Exploration and Mining Activity10.Key Mineral Production in Limpopo11. Industry Challenges

Introduction –Where What How

1. Where is Limpopo Situated?2. What is its geographical setting?3. How does the minerals industry impact on the Province

Loca

lity

Map

and

Reg

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l Inf

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ure

1.

Magisterial Districts of Limpopo Relative to Surrounding Provinces & Countries

Zimbabwe

Botswana

Gauteng Province

North-West Province Mpumalanga Province

Modified After: Wikipedia 2015

Mopani

Vhembe

Capricorn

Waterberg

Sekhukhune

Magisterial Districts of Limpopo Province

Municipalities of LimpopoDistrict Local

Mopani Greater Giyani, Greater Letaba, Greater Tzaneen, Ba-Phalaborwa, Maruleng

Vhembe Musina, Mutale, Thulamela, Makhado

Capricorn Blouberg, Aganang, Molemole, Polokwane, Lepelle-Nkumpi

Waterberg Thabazimbi, Lephalale, Mookgophong, Modimolle, Bela-Bela, Mogalakwena

Sekhukhune Ephraim Mogale, Elias Motsoaledi, Makhuduthamaga, Fetakgomo, Greater Tubatse

Population of 5,404,868 (2011) (census) with a currently estimated total of 5,630,500 (2014) 4% growth which ranks it 5th in South Africa. The Province comprises 5 districts and 26 Municipalities

It has a population density of 3/km2 (110/sq mi) which ranks it 5th in South Africa.

The density is very skewed with intensely populated areas around the major towns and cities and low densities in deeply rural areas and

mountain ranges

Economic Growth Rate of USA, China & EU 2000 – 2018 Compared with South Africa

Note SA Above that of the US, EU & Sub-Saharan Africa

Growth in Africa starts overtaking advanced economies

Growth Rate Comparison Limpopo VS South Africa

Growth Rate Comparison Limpopo VS South Africa

3.7

3.7

3.5

3.0

2.6

2.6

2.5

2.3

2.3

3.3

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

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KwaZ

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Nat

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East

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Mpu

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Sta

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Nor

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Nor

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GD

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% c

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Real annual economic growth rate per region (2003-2013)

Source: SSA

Growth Rate Comparison Limpopo VS South Africa

2.6

2.5

2.4

2.3

2.1

2.1

1.7

1.7

1.1

2.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0G

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Nor

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Lim

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GD

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Real annual economic growth rate per region (2013)

Source: SSA

Mining Statistics –Resources of Limpopo

in ContextThe Chamber of Mines Annual Report for 2013 -2014

In the past decade, the mining sector has contributed just over R2.4 trillion to the country’s GDP and R2.4 trillion to the country’s export earnings, in real money terms (COM 2014 AR)

The Mineral Resources of Limpopo in Context

The mining industry contributes 14% to FDI in 2013, down from 25% in 2010. The potential for this to improve is hampered by the escalation of a labour, electricity and regulatory challenges. The downgrade of the SA debt rating during 2014, places it, on average just within the investment grade rating. (Just above junk status!)

Mining is the Flywheel of the Economy

Mining is the Flywheel of the Economy

Lim

popo

’s Ke

y M

iner

al H

erita

gePl

atin

um, C

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oal &

UG

Platinum/Chrome Mines & Projects in Limpopo

Coal Mines & Projects + CBM & UCG?

Limpopo’s Mineral Heritage1 Precious Metals: Platinum group elements

(pge): (Merensky and Chromite Reefs)Platinum, palladium rhodium, etc and gold

9 Tin (Rooiberg Area, Waterberg)

10 Industrial Minerals and Dimension

Stone2

Nickel and Copper with pge (EspMogalakwena Mine PlatReef)

Brick ClayScheelite,Vermiculite,Silicon,FeldsparGranite, (Blackand other colours)Emeralds Corundum,Limestone

3 Copper and Phosphate (Palabora)

4Iron ore, (magnetite) (Bushveld, Banded Iron Formation and Palabora)

5 Chromite (Bushveld Complex)

6Blend coking and, steam coal, (With associated uranium in the Springbok Flats

7 Diamonds (Venetia)

8 Antimony (Tzaneen Region)

Platinum Resources & Reserves

Total SA Coal reserves: 67Bt Total SA PGM (Pt/Pd) reserves: > 9 934 t

1.Limpopo Province is host to 41% of the national reserve base

2.North West Province accounts for a further 24%

3.Mpumalanga makes up 35% by difference

4.Resources of Platinum are estimated at 29,206 tonnes and Palladium at 22,115 tonnes

Coalfield Statistics (2012)

Coalfield or Portion of a

coalfield

1.Limpopo Province is host to 50,634Mt of Coal or 76% of South African ROM Resources

2.Waterberg OC on its own is 54% of the SA total

3.Note: the “Total” is for the whole country)

4.For modifying factor see report issued by the CGS in 2012 (Unpublished)

Run OF Mine (Mt)

Coal and Platinum Mines of Limpopo

Waterberg Coalfield

48 coal prospecting rights

1Tcf Gas

Northern Limpopo Coalfields

Vele Mine and Makhado Project (Coal of Africa)

Springbok Flats Coalfield

24

Springbok Flats

Coalfield1. The Basin lies about

90km north of Johannesburg, 40km from Pretoria

2. The basin covers and area of about 930 000ha

3. It is about 209km in length and 50-60 km in width

4. The field has substantial coal bed methane (CBM) and uranium potential

In-Situ Coal Resource Estimate –Springbok Flats Coalfield

Regions and Areas Areas From Maps

1 NE Region 3,245,614,384

2 NE Shallow Area 1,131,701,793

3 NE Deep Area 2,113,912,591

4 Central Region 1,673,598,490

5 Central Shallow Area 911,118,699

6 Central Deep Area 762,479,792

7 SW Region 2,917,139,888

8 SW Shallow Area 1,906,749,599

9 SW Deep Area 1,010,390,28910 Total Resource Area

(1+4+7)7,836,352,763

Eastern Limb Platinum and

Chrome Mines1. There are +40

projects or mines on the Eastern Limb

2. The area is important historically as it was here that the Merensky Reef was discovered (3)

3. Outcrop in Limpopo of the Platinum and Chrome reefs is over 180km in length

4. There are at least three significant chrome operations north of Steelpoort in Limpopo

Steelpoort

Western Limb Platinum &

Chrome Mines in Limpopo

271.Two Smelters are

located in Limpopo in the W Bushveld. These are at the Northam Mine and at Union

2.Northam is the deepest Platinum Mine in South Africa operating at 1670m from surface

3.Anglo Platinum has the Union Mine up for sale

Northern Limb Platinum Belt

1.Mining on the Northern Limb has been opencast (Mogalakwena Mine A15

2.PTM Waterberg project continues to be explored;

3.New mine (Platreef Resources) is under development at Mokopane

4.There are 17 recorded projects along the Northern Bushveld at present;

Magnetite iron ore projects are also being investigated west of the Platreef line in the Main Zone of the Northern Limb of Bushveld Complex

Minerals and Metals Identified in Limpopo Province

Strategic minerals and others deemed to be of high economic importance are:

Coal Chromium Copper

Gold Iron Nickel

PhosphatePlatinum Group Metals (pgm) Tin

Vanadium Uranium

Other minerals of economic potential are:Andalusite Antimony ManganeseLead Zinc Silver

Molybdenum DolomiteBuilding Stone

Clays - Kaolinite Bauxite MicaFeldspar Quartz FluorsparLimestone

Tin Fields

Uranium

Diamonds

Magnetite/ Vanadium BIF Iron Ore

Copper Potential

Andalusite

Magnetite and

Vanadium

Phosphate Glenover

Phosphate/Mica / Mt

Palaborwa

Proposed Transport Corridors and Special Economic Zones in Limpopo

Musina Development

Zone

Tubatse Development

Zone

Lephalale Energy Coal Development

Zone

Beneficiation

Platinum, Coal, Iron Ore and Chrome are extensively beneficiated in Limpopo and in South Africa before being sold

1.Beneficiation including smelting and refining is well developed with 5 smelters and 3 refineries.

2.Northam exports its smelted products to Germany for refining

3.The SelousMetallurgical Complex (SMC) in Zimbabwe services all the Zimbabwe mines

4.Kalplats project is still under evaluation in the Stella Layered Complex, Northern Cape

Platinum in Southern Africa

PGM: Potential and Status

South Africa is the largest producer of platinum minerals in the world. Russia is a large palladium producer, the only viable substitute for platinum. South Africa’s dominance in international production of platinum is expected to continue for many decades

• Estimated Reserves•Pt: 203.3M troy ounces,(6,323 tonnes)•Pd 116.1 million troy ounces(3,611 tonnes).

• Inferred resources•Pt: 939 million troy ounces(29,206 tonnes)•Pd: 711 million troy ounces(22,115 tonnes).

.(SAMREC Cawthorn Reserves: Proven and Probable)

Coal Production & Beneficiation Outlook In Limpopo

COALCoal

All SA Coal is beneficiated andconsequently over 40% of productionis lost to ash stockpiles (over 70% in thecase of the Waterberg coalfield).Between 2000 and 2014 coalproduction rose from 226Mmt to263Mmt, an annual increase of2,6Mtpa over this 14 year period. Theexport of coal has averaged 39% oflocal sales over a 27 year period toDecember 2014 and currently standsat 68Mtpa. The planned increase to91Mtpa has not materialised due tothe world wide slow down in demandand low prices.

Coal gasification (UCG) remains anopportunity for ultra deep coal depositsas are present in the Waterberg,Springbok Flats and Northern LimpopoCoalfields. A pilot project is currentlybeing developed in the Free State

The dominant receiver of coal remains Sasol for theirproduction of synfuel, and to Eskom for theproduction of electricity. Both outputs from Sasoland Eskom are largely sold to local consumers.

New coal to liquid processing plants may beestablished but only in SA due to the low cost of oilat present $40-50/B (11/15).

Chromite Mining &Beneficiation In Limpopo

MINERAL Production and BeneficiationChromitite South Africa is the largest chrome ore producer in the world. More than

90% of chrome ore is converted to ferrochrome. Ferrochrome, is destinedfor the stainless steel producers in China and Japan.Beneficiation of Limpopo chrome takes place at Steelpoort , Lydenburgand in Middelburg where high chrome steel is manufactured incombination with Magnetite iron ore mined at Stoffberg LimpopoSouth Africa produces stainless steel goods locally and export these intoother markets internationally. Tubatse is planned to be a majordevelopment zone for Ferrochrome in future

In Limpopo, Chromite has been mined along the entire outcrop betweenSteelpoort (Winterveld)and the Olifants River (Jagtlust) for more than 60years . At Grasvally, south of Mokopane, high grade chrome was minedfor many years.

Iron Ore: Potential and Status

MINERAL Level of Beneficiation in South Africa

Iron Magnetite iron ore has been mined near Roosenekal in Limpopo formore that 40 years. The product is railed to Middelburg where it iscombined at Middelburg Steel and Alloys to produce ferrochromeand high grade steel.

New magnetite projects are being investigated in the northern limbof the Bushveld Complex and close to the Botswana border.

In the Sekhukhune area vanadium is located in association withmagnetite but intense human settlements have resulted in thedeposits being sterilized due to the costs of moving and relocation ofresidents

Environmental ConcernsMining activities pose a number ofenvironmental concerns that includenoise, dust, air, land and waterpollution and competition with farming.

Increasing Operating CostsDeep level underground and largeopencast mines (e.g. Northam &Palabora) use significantly more dieseland electricity in order to accessdeeper ore bodies. This increasesoperating costs and impacts negativelyon profit

Railway capacity

constraints at Transnet

Deep level mining

Safety concerns

Electricity supply

shortages

Industry Challenges

Railway capacity

constraints at Transnet

Deep level mining

Safety concerns

Environmental concerns

Increasing operating

costs pressures

Skills shortages

Key Industry Challenge

s

Electricity supply

shortages

Safety concerns

Skills ShortagesThe South African mining industry is competing with the infrastructure industry andother resource rich countries such as Canada, Australia and Chile and north of ourborders in Africa for mining engineers, geologists and artisans.

IN SUMMARYThe Limpopo Province is endowed with a vast array of mineraldeposits ranging from gold, diamonds, chrome and coal to platinumand copper.The South African Chamber of Mines indicates that the Limpopoprovince has approximately 90 operating mines, 50 of which are smallto medium sized mines.The Eastern and Northern limbs of the Bushveld Complex arethe hosts to a massive concentration of pge (platinum groupelements), chromite, magnetite, vanadium, copper, cobalt and nickel.In the Limpopo Mobile Belt north of the Soutpansberg hostsdiamond, copper, corundum and graphite mines have been exploredfor and developed for almost a century.The Limpopo Province is also home to the Waterberg coal basinwhich hosts approximately 54% of South Africa’s remaining coalresourcesA host of other minerals have been discovered and are beingprospected for in the Limpopo Province

Kealeboga – Thank you

Any question?