SEPHAKO Fluoride (SepFluor), an unlisted fluorspar development company, is to build a R1.7bn mine north east of Pretoria – a rare example of new investment in South Africa where regulatory uncertainty has crimped the ability of the country to attract new investors, or even draw expansions out of existing investors.
The mine and concentrator – Nokeng Fluorspare Mine – will produce 180,000 tonnes a year of acid grade fluorspar and 30,000 tonnes a year of metallurgical grade fluorspar from the beginning of 2019 following commissioning in November 2018.
Construction time of Nokeng will be 21 months and it will employ 300 fixed-term jobs during that period, and 200 permanent jobs when the mine and concentrator is complete. Nokeng has a life of mine of about 19 years.
SepFluor was founded in 2006 by Lelau Mohuba, a former medical doctor who has served on the boards of Incubex Minerals, Miranda Minerals and Taung Gold – companies with whom serial mining entrepreneurs David Twist and Rudolph de Bruin have had an association. Twist and De Bruin are non-executive directors in SepFluor.
Executive management of the company falls to CEO, Rob Wager, who was previously CEO of African Nickel and Metgold Ltd. He was also employed by Norilsk Nickel where he was operations director and has filled various roles for JCI, AngloGold and BHP Billiton.
The equity investment portion of the project capital is led by Twist and De Bruin through their African Minerals Exploration and Development Fund II (AMED), along with Carlo Baravalle, an Italian investor who is another non-executive on the board of SepFluor. Mohuba is also among the equity investors in Nokeng through the Lelau Mohuba Trust.
Traxys Projects, a division of commodities trading company, Traxys Europe, is also an investor in the mine. Traxys has also signed a long-term agreement to market and distribute Nokeng’s production. A significant portion of the early output has been pre-sold to several international fluorspar consumers, said SepFluor.
Fieldstone Africa arranged the debt portion of the finance. Fieldstone comprises a consortium of three primary lenders: Nedbank Ltd, the lender and facility agent as well as Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden NV and Deutsche Investitions Und Entwicklungsgesellschaft mbH.
In addition, Concentrate Capital partners (CCP), a small investment fund associated with the engineering procurement construction (EPC) contractor DRA, has provided a small tranche of mezzanine debt. The Department of Trade and Industry (DTI) has approved an infrastructure grant of R21m under its Critical Infrastructure Programme (CIP), primarily as a contribution towards power supply and road works.
A joint venture comprising DRA Projects SA (Pty) Limited and Group 5 Construction Limited has been awarded the EPC contract for the mine, which includes the concentrator, access roads and the ‘self-build’ portion of a power supply agreement concluded with Eskom. This involves the construction of a new 14km, 132kv overhead power line. Water supply to the site will be from a newly established wellfield.
Acid grade fluorspar is mostly used in the chemicals industry to manufacture hydrochloric acid while metallurgical grade fluorspar is used as a flux to remove impurities from molten iron such as sulphur and phosphorous.
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