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Tharisa Amec Foster Wheeler Wood
Precious Metals  
20 November 2017

Tharisa Minerals sets foundation for future growth opportunities

On the back of eight years of successful PGM and chrome production Tharisa Minerals is set to grow both organically and through the expansion of its portfolio.

Tharisa Minerals CEO, Pheovos Pouroulis interview with Mining Review Africa editor, Laura Cornish:

This article is published in Mining Review Africa Issue 11 2017 - read it here!

AUTHOR: Editor of Mining Review Africa, Laura Cornish.

“Tharisa Minerals is an 11 year old mid-tier, large-scale open pit PGM and chrome concentrates co-producer with an integrated marketing, sales and logistics platform.

"We are cash generative and a dividend payer and will continue this momentum through our 74% owned Tharisa mine,” Pouroulis starts.

The mine is situated on the south western limb of the Bushveld Complex and is neighboured by Samancor Chrome, Lonmin and Sibanye Platinum.

Uniquely positioned

“From the outset we positioned Tharisa Minerals as a strategically competitive business with a unique project, targeting multiple reef horizons to produce PGM and chrome concentrate – neither as a by-product,” the CEO explains.

Platinum miners typically target the UG2 and Merensky reefs. Chrome miners typically target the LG6 and MG1 and 2 reef horizons.

“Tharisa Minerals identified from the outset that the middle group (MG) of reef horizons was a complete package from 0 – 4, containing both chrome and PGMs, with potential to extract maximum value from this entire resource.”

Most MG reef horizons are not generally mined because they are perceived to be low grade.

The consequent delivery of a large scale, open pit, multi-seam mine provides flexibility and more importantly a dual revenue stream that a by-producer doesn’t have which unlocks full ore body potential and revenue – “this is our differentiating factor.”

Naturally, the operation of integrated processing circuits to extract high content chrome and PGM material completes the company’s value proposition.

A closer look at the operation

Tharisa mine has a huge 877.7 Mt resource (98.9 Mt in reserve of which 80.2 Mt is open pit).

This resource declaration has been verified to a depth of 750 m, which incorporates one of the world’s single largest chrome resources.

This equates to a long life 18 year open pit operation, which is impressive considering the average depth of PGM mines is well below 750 m and requires significant capital spend and a larger labour intensity.

The 5 Mtpa ROM mechanised operation comprises a 5.5 km strike length exploited through an east and west pit which in 2017 will produce 147 400 oz of PGM material and 1.3 Mt of chrome concentrate (approximate steady-state production).

On 1 October 2017 Tharisa Minerals successfully transitioned to an owner operator model, having completed the purchase of mining equipment from its former contract miner MCC Contracts.

This saw the company employ an addition 900 MCC employees and certain equipment items.

“The contractor mining model was appropriate while the Tharisa mine was in development since it reduced the upfront capital spend on a fleet, enabled Tharisa Minerals to understand its ore body fully and allowed the company to determine the optimal fleet requirements for mining its specific ore body,” says Pouroulis.

“By taking direct control of its mining operations, Tharisa Minerals will now be better placed to control reef grades, thereby, delivering improved quality ore to the processing plants and optimising the feed and recovery within the plants,” adds Pouroulis.

As a result of the transition and the benefits of optimisation programmes, Tharisa expects to produce 150 000 oz of PGM concentrate and 1.4 Mt of chrome concentrates in FY2018.

Long-term sustainability

While an 18 year lifespan is significant in the mining sector, Tharisa Minerals has already explored the option of transitioning to an underground mine in year 15.

“For now we have scheduled two of our five reefs to be developed on an underground basis using mechanised bord and pillar mining.

But this is far into the future and will require review in about 10 years’ time where we will properly determine the economics of mining two of the five reefs. So while this is in our economic model, it is only conceptual and part of our long-term sustainability plan.”

Growth opportunities

Pouroulis always knew that the Tharisa operation would be a starting point and a platform to grow the business.

In the short to medium term there are various organic growth opportunities and in the longer term expanding beyond operating a single mine he reveals.

For now, the company is underway with a feasibility study to mine and process the UG1 reef which has a low PGM content and similar chrome content to certain MG reefs.

“We will have feedback in the next calendar year in terms of project viability although we can already confirm this will require a standalone processing circuit which will likely average around 50 000 tpm.”

Beyond this there are various additional organic growth opportunities to realise process improvements and use new technologies to unlock value from the existing footprint through research and development initiatives. (Tharisa Minerals has a dedicated R&D subsidiary).

“Because we are strong in the PGM/chrome space it is also logical to grow in this space. The recent acquisition of the Lonmin K3 chrome plant is a good example. Ultimately we would like to produce considerably higher volumes of PGM and chrome concentrates.”

Beyond organic growth opportunities, Tharisa Minerals’ strategy includes diversification and more substantial growth and is open to all commodity opportunities across the globe as long as they ultimately fulfil the company’s business philosophy – to be a low cost quartile producer with large-scale open pit tonnages.

It should also be quick to market and a good return on investment.

“Our skills set is development from Grassroots through to exploration and further along the value curve, but we will consider any viable opportunity, including producing assets.”

Partnering for excellence

In 2012 MDM Engineering, Amec Foster Wheeler’s South African mining company, now Wood, were involved in the design and execution of the Tharisa Genesis plant.

The first ground was broken in June 2011, with the full capacity achieved in December 2012.

Designed specifically to treat the MG chromite layer of the Bushveld complex, the 100 000 tpm chromite recovery circuit comprising of crushing, grinding and primary removal of chrome concentrate from spirals was installed ahead of the later-constructed PGM concentrator plant.

The initial extraction of chrome, and the smaller PGM circuit and associated capital costs assist Tharisa to be in the lowest quartile of the cost curve and to process lower PGM and higher chrome grades than more typical PGM operations in South Africa.

MDM Engineering pride themselves on bringing innovative, fit for purpose solutions and processes like this and adding long term value to our clients.

This is what made the combination of Tharisa Minerals and MDM Engineering a successful combination during the execution of the Genesis project.

Wood is again engaging with Tharisa to look at other innovative means to develop further benefits.

Feature image credit: Tharisa Minerals

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