Key points
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Glencore backs Prieska copper project with up to $250 million.
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Orion aims to start production soon and generate cash flow.
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Project expected to create jobs and boost local communities.
Orion Minerals has signed a term sheet with Glencore to support the restart of the Prieska copper and zinc mine in South Africa’s Northern Cape.
The agreement covers between $200 million and $250 million in funding. Glencore will also purchase all copper and zinc concentrates produced from the project for set periods.
Funding will be provided in two stages. The first $40 million will pay for construction and startup of the Prieska Uppers.
The second stage, worth up to $210 million, will finance development of the deeper sections, known as the Prieska Deeps. Orion can also use up to $50 million early to begin underground work.
Orion prepares for first production
Orion CEO Tony Lennox said the deal puts the company on track to start production and generate its first cash flow. Starting with the Uppers will allow Orion to move smoothly into the larger Deeps operation.
“This arrangement lets us begin output while preparing for long-term growth,” Lennox said.
Glencore said it has been watching the project closely and plans to complete its due diligence quickly. Its goal is to see the mine return to production as soon as possible.
Project brings growth to Northern Cape
The Industrial Development Corporation (IDC), an early supporter of the mine, welcomed the agreement. Acting executive Rian Coetzee said the project will create jobs and strengthen the local economy.
“The IDC is excited to see Prieska move forward,” Coetzee said. “This project will bring value to communities and the wider region.”
The Prieska mine last operated in 1991. It still holds large copper and zinc reserves. With Glencore’s support, Orion is set to become a major base metals producer in South Africa. The company is also developing other projects in the Okiep region and planning long-term growth with the Jacomynspan nickel and cobalt project.
