Richards Bay Minerals (RBM), which as SA’s largest mineral sands producer extracts titanium, iron, zircon and rutile from the vast mineral-rich sands of KwaZulu-Natal (KZN), has had a tough time expanding its operations in recent years.
A joint venture between mining behemoth Rio Tinto and SA communities, the company has had to put its Zulti South expansion project on hold since 2020 due to security concerns, which came to a head when GM Nico Swart was assassinated on his way to work in 2021.
However, MD Werner Duvenhage said the social environment has since turned around, with RBM’s relationship with local communities and provincial government strengthening over the past 12 months.
He expects the $500m Zulti South expansion to receive Rio Tinto’s blessing by the middle of this year after the pilot plant built to test the project’s viability has operated without community disruptions since last year.
Can you provide any updates in terms of the Zulti South expansion project?
The Zulti South project was approved by Rio Tinto in 2019, but because of disruptions and violence that took place around the operation, it has been suspended.
Last year, we commissioned a refresh of the feasibility study. We received those results in January, and now we’re going through an independent review within Rio Tinto. We hope to have it approved by midyear by the Rio Tinto board and then by the RBM board.
On October 1, we went into the area to start opening up roads and building sites and erect overhead power lines. That’s been going on for over four months now with no disruptions, no threats and no violence. As a matter of fact, the community is quite engaging.
How have you addressed the crime, corruption and violence threatening your operations? Have your relations with local communities improved since 2021?
People often say we have problematic communities [in SA mining], but our communities are not that different to any others in the world. However, organised crime got into the community, which was as bad for us as it was for them.
We received excellent support from national government, especially on the policing side. That has quietened things down and was very well received by the community on the ground, because their lives got a lot safer.
We do have a court case against our community trust, which we want to be restated. That case’s outcome is pending, so the relationship [with the trust] is tense, but with the community on the group it’s excellent. We’ve been sharing a lot more information with them. We ensure we keep them up to date with what we are doing.
In terms of crime and corruption, companies shouldn’t be turning a blind eye to these kinds of things. We can’t just ignore it; we need to report it [to the authorities] so that action can be taken.
Environmental targets aside, to what extent is the switch to renewables driven by concerns about Eskom’s performance?
Environmental goals are the starting point, but it’s also about security of supply. Plus, in all the agreements we’ve put in place so far, including the wheeling rates, the cost is cheaper than what we now pay Eskom on average.
In a business like ours, we need to think about who we are competing with, what countries also have smelters doing the same thing as us. I’ve been in presentations previously where Eskom would point to the cost of power in Belgium or Germany and say, “why are you guys complaining?” — but those aren’t the countries we are competing with.
Do you feel positive about the latest tariffs approved by Nersa or is it safe to say the cost of electricity is still a serious concern for your business?
It’s still a serious concern. It’s way over inflation, and it has been like that for many years now. Power now makes up almost 30% of our cost base.
Have you seen the SA environment or the mood in the boardroom improving since last year’s elections?
I do feel the external environment from a government perspective has improved over the past 12 months. Over the past few years, we’ve developed a strong working relationship with national government, and we’ve always had a good relationship with local government.
Our relationship with provincial government in KZN was lacking a bit, and in the past 12 months it has improved quite a bit as well.
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