African Mining July - August 2019 | Page 21

In conversation with capital investment with similar economic returns and a substantially increased life of mine. A phased programme of work has been prepared to review and verify the underlying design parameters, assess various optimisation opportunities and develop a proposed single solution within 12 months. In Ghana, a 50+1%-owned subsidiary of Kropz, First Gear Exploration (First Gear), is currently undertaking exploration work to confirm that the phosphate-bearing horizons of the HKK deposit in Togo extend into the Aflao area of neighbouring Ghana. Phosphates have been mined since 1961 in the southern parts of Togo by the state-owned company, Société Nouvelle des Phosphates du Togo (SNPT), near the capital city, Lomé. Following the start of mining in Togo, it was considered that these deposits may extend westwards into Ghana. This was confirmed by preliminary investigations undertaken by Geological Survey of Ghana (GSG) in the 1960s. The SNPT Kpeme mine in Togo is the single major producer in the country. The deposit produces a phosphate rock concentrate high in P2O5 with beneficiated product grade of typically 36%, P2O5 which places it at the high end of the commonly traded phosphate rock scale. The exploration project has been initiated using a phased approach, and eight additional lines of Mobile Metal Ion (MMI) sampling having been carried out post IPO expanding the total strike length covered by MMI test work to 6km. Radiometric survey over all of the MMI lines is planned to commence in Q2 2019; along with a detailed drone survey and mapping of the entire target area. What do you regard as the major opportunities and major risks or challenges in both the Congo and Ghana? Both countries offer attractive mining investment environments with the necessary infrastructure in place, safe operating environments and governments that are eager to support growth within the sector. A number of the Kropz board members have previously operated successful mining projects in various jurisdictions across Africa and we are thus cognisant of the potential opportunities these jurisdictions offer. I have found that one of the biggest challenges a company is likely to face when moving into a new jurisdiction is trying not to ‘force a fit’ with how one might have operated a project in some other location. It always takes a little time, but in the end it is well worth the effort to get to know and fully understand the culture and practices applicable to the new jurisdiction and to then find a way to merge the best of both worlds. How significant will these projects be in the development of these two countries? While we would naturally like to believe that the impact will be considerable, and that may well be the case with respect to the local communities in which we operate, the truth is that there are other www.africanmining.co.za industries such as gold in Ghana and oil and gas in RoC, that will always be considerably bigger than phosphate. However, it is also true that the impacts of these projects will not be insignificant in terms of forex generation, tax contributions, job creation and skills development and perhaps most importantly, additional food security and improved farming efficiencies. As such, we are confident that our contribution will indeed be a positive one. Will the operational and project management in the Congo (and Ghana) differ from the way you operate at Elandsfontein, and if so what will be the similarities and/or differences? The Kropz approach has always been to keep our executive management team as small as possible, and for this team to then work with, lead and guide the development of our onsite project teams. One of our core functions is to direct the corporate culture under which we operate and to ensure maximum efficiency and appropriate economies of scale. The executive management will thus continue to look after the full project portfolio, but the Kropz team will certainly have to grow in each of these jurisdictions to accommodate the new projects as they develop. Will the project be similar, and is Kropz planning to export the fertiliser? What about the infrastructure in these countries? Are the rail networks and roads, ports and electricity sufficient? The potential high-grade nature of the Ghanaian asset means that this project is likely to be somewhat different from the other two projects, as it would most likely only require the washing and classification of the ore in order to produce an attractive end product. However, the Hinda operation is likely to end up being fairly similar to what we have at Elandsfontein. All of our projects have been chosen, at least partially, on account of their ready access to appropriate infrastructure, transportation and deep-water ports. While some level of ancillary support infrastructure is always essential in projects of this nature, we are currently quite comfortable with the operating environments in which our projects are located. During the first few years of Kropz development, the majority of our production from each of these locations is likely to be sold and exported to large global industry stakeholders. However, there is potential for some degree of local value addition, beneficiation and distribution, and this is very much a part of Kropz’s longer term aspirations. We will look to manage the long-term vision one step at a time and the initial emphasis will undoubtedly be on getting the plants up and running, creating sustainable working environments, generating revenues, paying taxes and ensuring sound shareholder returns. What is the outlook for phosphate and fertiliser mining in Africa and which regions should we be keeping an eye on? With extensive natural resources, the fastest-growing population, and currently the worst returns from its arable land, sub-Saharan Africa offers considerable upside potential for phosphates and the fertiliser industry as a whole. As to which region one should keep an eye on, my simple response would be to watch Kropz, and watch the west coast of Africa. b JULY - AUGUST 2019 AFRICAN MINING 19