South African mining regulations are more geared towards major mining houses; this contributes to lower levels of investment in greenfield exploration  and remote brownfields development opportunities, says globally diversified metals explorer and developer Orion Minerals MD and CEO Errol Smart.

He says the mining regulations do not create an environment that is conducive for junior miners and explorers and, as a result, they are not incentivised to operate in South Africa.

The country’s mature mining environment is dominated by major mining houses, along with secondary growth of black economic-empowerment mining companies resulting from transformation efforts of the Majors.

There is almost no exploration-driven mining development, which has resulted in previously discovered or even mined, projects being neglected, adds Smart.

However, he asserts that while the mining and related regulations can be administratively burdensome, the environment is not unplayable and the rewards are potentially “enormous”, as South Africa offers significant opportunity that is supported by primary infrastructure.

Orion Minerals has two advanced projects in the Northern Cape – the Prieska Copper-Zinc Project and the Okiep Copper Project.

A significant contributor to pursuing these projects is infrastructure, which makes the region easier to explore and, eventually, develop into a mine.

The Northern Cape province is a large, remote area of South Africa, it has many renewable-energy projects; primary infrastructure, such as roads and rail; a well-established communications network; and an “incredible mineral endowment”.

Smart adds that an advantage in the Northern Cape is an electricity grid connection that, despite challenges with State-owned national electricity utility Eskom, still deliver grid supply between 60% and 80% of the year, unlike other remote areas in the world with no power supply at all.

He acknowledges that deteriorating infrastructure and loadshedding is a significant challenge, particularly for existing operations.

However, greenfields mining operations can design their mines to be appropriate for the environment in which they operate. This includes integrating solutions to mitigate the impact of unreliable electricity, such as changing mining operating cycles according to electricity availability and using renewable energy, to bridge the gap.

Prieska
Mined between 1971 and 1991, the Prieska mine produced over 400 000 t of copper and one-million tonnes of zinc.

Smart adds that Prieska closed in 1991, owing to its depth – 1 200 m at the time – proving challenging to mine economically, and that the geometry of the orebody had changed making it more challenging to mine.

As a result, the mine required a different mining method and recapitalisation.

However, since the mine closed, new mining methods have been developed, and the metallurgical techniques used currently add better efficiency.

According to Prieska’s five-year plan, the mine is on track to reach 20 000 t/y of copper and 70 000 t/y of zinc in concentrate production.

Orion hopes to eventually produce about 40 000 t/y of copper equivalent, which was the mine’s previous production rate.

The company is completing an updated feasibility study on its accelerated development strategy at Prieska, with early dewatering and trial mining under way to provide early access to cash flow.

It has drawn down R167-million on its first project financing from development finance institution Industrial Development Corporation of South Africa (IDC) and mine financing company Triple Flag Precious Metals Corporation.

“We hope to publish an updated bankable feasibility study within the next six months, which will include early mining and early production, and we could be seeing production in less than 12 months,” says Smart.

Orion will revise its feasibility study and ensure that expectations are demonstrated, which will enable the company to draw $80-million of funding from Triple Flag Precious Metals.

Orion also has a A$60-million “in the money” share option scheme in place that expires on the November 30, 2023, which will be used to build the first metallurgical plant and continue with trial mining to eventually progress it into trial production.

Okiep
Orion acquired the Okiep copper project in 2021, which was followed by a rapid scoping study on a Joint Ore Reserves Committee-compliant resource exceeding 11-million tonnes at a grade of 1.4% copper.

This Okiep mining district produced between 30 000 t/y and 60 000 t/y of copper from a cluster of mining operations. Orion has secured about 75% of those mineral deposits in the district and is doing the bankable feasibility study on the first three of the deposits.

The company is finalising its design and planning, which should be submitted for independent expert review later this month, before being published.

The IDC is a 43% funding partner on the project and Orion is aiming to bring the mine into production as quickly as possible to incrementally reach the original production profile of 40 000 t/y of copper , in high-quality copper sulphide concentrates.

Smart notes that the designs for the mine’s tailings storage facility, tailings management, water management took slightly longer than anticipated, resulting in the study being one month behind schedule.

However, these efforts will result in additional dividends, owing to the strong environmental management that will underpin the project going forward.

Smarts adds that while the Okiep mining district has a history of copper mining, it also has large tungsten mines and graphite deposits that have yet to be fully explored. Recent drilling has also indicated nickel-rich copper mineralisation in the district.

Despite a focus on copper production, there is significant potential for other minerals, making Okiep an attractive opportunity. Exploration will continue alongside efforts to stabilise and generate cash flow from operations.