By: Christy van der Merwe
Mining Weekly: Published on 4th August 2008
The Department of Minerals and Energy (DME) has granted ASX-listed mining junior Mineral Commodities (MRC) the mining right for a portion of the Xolobeni Mineral Sands project, along South Africa's Wild Coast. The company was awarded a mining right for the Kwanyana block in the Xolobeni project, representing about 30% of the original area applied for. The mining licence was awarded to MRC's South African subsidiary, Transworld Energy and Minerals, and the remaining areas in the Xolobeni project would be held under prospecting right valid until 2010, which could be extended until applications were made to convert the remaining areas into mining rights on a block-by-block requirement.
DME spokesperson Sputnik Ratau told Mining Weekly Online that it was not yet possible to tell whether further licences would be granted, as the areas were still under consideration owing to environmental concerns. He remained assured of the feasibility of granting a licence for the smaller area. The Kwanyana block contains some 139-million tons of heavy titanium producing minerals, including ilmenite, zircon, leucoxene, and rutile. Of the four blocks making up the Xolobeni project area, the Kwanyana block had the largest measured resource. The mining right would be signed and issued on October 31, along with the Environmental Management Plan, and thereafter the company has said that it would fast-track the development of the Kwanyana block into a mining operation to produce heavy-mineral concentrate to supply the local South African producers and international markets.
It was not stated whether or not the mine development would include a beneficiation plant. Initially, MRC had indicated that it would build a smelter, which would also boost the number of jobs created in the relatively poor region of the Eastern Cape, however, the company later said that the plant would not be a part of the project. Ratau could not immediately clarify on the question of the beneficiation plant was put forward.
The project has long been met with resistance from environmentalists and those concerned for the human rights of people living in the area. The project is located in an ecologically sensitive area, dubbed a "biodiversity hotspot", and it was felt by many that eco-tourism in the area could bring more benefit to locals. The mining company's black economic-empowerment structures have also been drawn into question. However, MRC has stated that the project would do much for the development of the area, as the mine would bring with it associated infrastructure, such as roads and electricity.
Nongovernmental organisation Sustaining the Wild Coast (SWC) said it considered the fact that mining licences were not granted for all the areas "a substantial, although clearly incomplete victory", and added that interested and affected parties "await to be officially informed by DME of their decision". Ratau said that the department did not issue statements every time a mining licence was granted.
In a statement, SWC said that it did not share MRC's optimism that its grip on the prospecting rights was as tight as it would like investors to think, "because the newly enacted Integrated Coastal Management Act has come into play, which gives the Department of Environmental Affairs and Tourism (Deat) unquestioned jurisdiction in records of decision that impact on coastal areas".
Ratau said that the Deat had been involved in the granting of the Kwanyana block mining right, as was required by law. This was, however, a contentious issue as Deat officials had previously indicated environmental objections to the proposed mining in the area. SWC called on all interested and affected parties to respond with objections as soon as possible.
Editor: Mariaan Olivier
