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South Africa Becomes Top Investment Destination, Orion Minerals CEO Says

Copper Projects Boost Country’s Global Investment Appeal

by Adenike Adeodun

“The sun is finally shining on us,” Orion Minerals CEO Errol Smart declared during a recent Australia/South Africa webinar. He emphasized how South Africa has become one of the world’s most compelling short-term investment stories. This optimistic outlook is significantly advancing Orion’s Prieska copper project and the high-grade Okiep copper project, both key players in the global copper market.

“Global macroeconomics strongly favor copper,” Smart noted during the webinar, which was covered by Mining Weekly. He highlighted that trial mining at the Prieska copper and zinc project is already underway, with Okiep following closely behind.

Both projects have bankable feasibility studies (BFSs) at a time when the rand is strengthening, interest rates are moderating, and there is a semblance of medium-to-long-term certainty in the economic outlook. This is bolstered by the new government’s commitment to promoting economic growth and stability.

The Northern Cape, which hosts Orion’s brownfield and greenfield base metals projects, has historically produced over 2.5 million tons of copper. Currently, 160 people are on-site at Prieska, with ore being elevated to the surface daily.

Orion, listed on both the Johannesburg Stock Exchange (JSE) and the Australian Securities Exchange (ASX), plans to have plants in place and commence production by the end of 2025. Seventy-five percent of Orion’s equity trading occurs on the JSE, with the remaining 25% on the ASX.

Production is expected to begin 12 to 18 months after project funding is completed. The BFSs are nearing completion, with an independent review expected by August. The Minerals Corporation is acting as the independent debt financier for the BFS, and discussions are ongoing with equity financiers and potential offtake-related financiers.

Existing resources and reserves will be the foundation for mining operations. Current feasibility studies indicate the potential to produce 50,000 tons per year of copper equivalent for 17 to 18 years. Concurrently, efforts to grow resources and reserves will aim to increase output beyond the 50,000 tons per year mark.

Orion’s shares are fully fungible, allowing for buying on one exchange and selling on another. The company, with a market capitalization of R1.3 billion (A$110 million), has roughly six billion shares issued. Of these, 44% are in trading accounts on the JSE and 56% on the ASX. South Africans hold 43% of the shares, Europeans 33%, and Australians 23%. Europeans prefer to hold shares on the ASX.

“The South Africans understand the local environment better and trade actively. We have a massive retail following in South Africa, with over 30,000 South African retail shareholders,” Smart noted. He also highlighted the expected increase in JSE trading due to the new government’s policies.

Orion’s largest shareholder, with 17.9%, is Tembo Capital, a European fund managed from London. The Delphi Group, a German fund, holds 12.6% of the shares. South African mining company Clover Alloys, primarily involved in chrome mining, holds 8.8%, and Thomas Borman, formerly of BHP Billiton, owns 5.4%.

The company’s chairperson, Denis Waddell, resides in Perth, while Smart is based in South Africa. Director Godfrey Gomwe, former CEO of Anglo Coal, and Director Anthony Lennox, former MD of Rio Tinto’s Phalaborwa copper mine, are key figures. Director Mark Palmer, representing Tembo, is based in London.

“Yesterday, JP Morgan moved us from underweight to overweight,” Smart enthused. This change reflects confidence in Prieska’s robust mining infrastructure, which includes a ready-made shaft descending to a depth of 1,100 meters.

The planned investments in Prieska and Okiep signify a bright future for Orion Minerals and South Africa’s mining sector. With substantial resources, strategic planning, and robust infrastructure, these projects are set to position South Africa as a top destination for mining investments.


Source: Mining Weekly

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