The Platreef platinum mine in Limpopo Province, South Africa, on Tuesday. Ivanhoe Mines is investing US$1.2-billion in the first two phases of the project.Supplied
Mining tycoon Robert Friedland has opened the first phase of a US$2-billion platinum mining project in South Africa, marking the beginning of production from a mine that was 37 years in the making.
Mr. Friedland, the founder and executive co-chairman of Vancouver-based Ivanhoe Mines Ltd. IVN-T, was accompanied by South African President Cyril Ramaphosa as they cut the ribbon on Tuesday at the Platreef mine.
The billionaire mogul described the project as “the world’s largest undeveloped precious-metals mine” and one of the lowest-cost sources of platinum, palladium, rhodium, nickel, copper and gold.
When Tigray became a ‘Wild West’ of illegal gold mining, Canadian firms staked a claim
Activist investor Elliott Management takes large stake in Barrick, supports splitting company
South Africa, once the world’s biggest mining powerhouse, has suffered decades of declining production and labour disputes in the sector. But its government is keen to tout the Platreef project as a harbinger of better days.
“It gives us a glimpse of the bright future of South Africa’s mining industry,” Mr. Ramaphosa told the opening ceremony at the mine. “We maintain that mining is a sunrise industry that must continue to play a critical enabling role in our nation’s development.”
The mine’s concentrator plant, he said, shows that South Africa is “positioning itself as a strategic partner in the global energy transition and the next wave of green industrialization.”
South African President Cyril Ramaphosa at the 47th ASEAN Summit in Kuala Lumpur, Malaysia, in October.Hasnoor Hussain/Reuters
Ivanhoe is investing US$1.2-billion in the first two phases of the Platreef project, with the second phase scheduled for production in late 2027. The third phase, if approved, would cost a further US$800-million.
“The Phase 1 mine is just a baby first step to an operation that we’ll be making 10 times larger, over two further phases of expansion,” Mr. Friedland said in an announcement in late October.
Mr. Friedland first made his fortune in the early 1990s when one of his companies found the Voisey’s Bay nickel and copper property in Labrador, which it later sold to Inco for $4.3-billion.
He later developed a world-leading copper and gold project in the Gobi Desert of Mongolia, in which Rio Tinto RIO-N eventually acquired a majority stake. Most recently he has focused on Africa, including the multibillion-dollar Kamoa-Kakula copper project in the Democratic Republic of the Congo.
The platinum mine is his first major project in South Africa, a country known for its complex political environment, strong trade unions and community-rights groups, and stringent rules on Black economic empowerment.
Ivanhoe Mines founder Robert Friedland at a conference in Cape Town, South Africa, in 2022. The Platreef mine is his first major project in the country.SHELLEY CHRISTIANS/Reuters
In a sign of the political challenges that Ivanhoe has faced in the country, the Platreef opening ceremony on Tuesday was picketed by local residents who complained about a lack of jobs and community benefits from the project. One of their signs read: “Stop undermining us.”
Some residents said they felt sidelined and forgotten. “Our area is poor,” 47-year-old Annan Mogongoa told the Daily Sun, a South African newspaper. “You can’t even tell that we live next to big mines.”
Ivanhoe, which holds 64 per cent of the South African company that owns the platinum mine, says the mine employs more than 2,000 people, largely from local communities. It says a 26-per-cent stake is held by its broad-based Black economic empowerment partners, including 20 local communities with 150,000 residents.
The company has been careful to cultivate links with influential politicians in South Africa, including Mr. Ramaphosa, who served as a member of Ivanhoe’s board of directors for years and owned about $1-million in company shares at one point.
Mr. Ramaphosa, a powerful insider in the ruling African National Congress since the apartheid era, eventually resigned from Ivanhoe’s board in 2013 when he became the ANC’s deputy leader. He announced that he would transfer his shares to a non-profit organization.
Another top ANC politician, former South African president Kgalema Motlanthe, became an Ivanhoe Mines director in 2018.
A wider view of the Platreef platinum mine. Ivanhoe says the mine employs more than 2,000 people, largely from local communities.Supplied/Ivanhoe Mines
The platinum project, first envisioned by earlier owners in the 1980s, has been much delayed. A decade ago, the company told investors that it expected production to begin in 2019 or 2020, but it took a further five years to reach that milestone.
“The rescheduling was mainly based around capital expenditure plans related to other projects,” Ivanhoe spokesman Matthew Keevil told The Globe and Mail.
“We have been spending quite a bit of time and money at Kamoa-Kakula over the past five to six years and it is not typical to build two tier-one mines at the same time,” he said. “PGM [platinum-group metals] prices also relatively bottomed over that period, while copper obviously has had a moment in the sun.”