BUSINESS - COMPANIES
| 2013-08-08Rosh Pinah, Skorpion seek common ground on zinc deposit
CHAMWE KAIRA AND LUQMAN CLOETE
ROSH PINAH Zinc Corporation, which is majority owned by the London listed trading company, Glencore and Skorpion Zinc owned by Vedanta Resources, are trying to find common ground on how they can jointly develop the Gergarub zinc deposits. The Gergarub lies close to the mines, which are adjacent to each other.
The Namibian was informed by sources close to the talks on the Gergarub that the two companies are trying to interpret the terms of an agreement signed in 2005 by the previous owners of the mines, Exxaro and Anglo American.
Exxaro sold its shareholding in Rosh Pinah to Glencore last year. Local company, PE Minerals is the other shareholder.
In 2010 Vedanta Resources completed the acquisition of the Skorpion Zinc Mine from Anglo American plc.
The Namibian understands that the mines, which are now under new owners are trying to resuscitate the 2005 agreement by their previous owners before they can jointly develop the project. The differences are also compounded by the fact that Skorpion mines zinc sulphide in an open pit mine while Rosh Pinah mines zinc oxide in an underground mine.
“How the two mines will prospect at the Gergarub deposit is another taking point,” a source said in an interview who preferred not to be mentioned.
The source the two mines will decide in 2014 whether they will jointly develop the project.
“They have to decide on the structure of the joint venture, the percentages involved. Basically, it would take about four years to start mining,” said the source.
Another source said “dispute” over the Gergarub centres around who has the right for the off-take of the deposits found near Rosh Pinah.
In 2005, the parties entered into 51% for Skorpion and for 49% for Rosh Pinah joint venture partnership, and also agreed to share the drilling cost based on the shares each party owned.
Other sources said Rosh Pinah was the first to drill at the site where the deposit was found. It apparently only drilled one metre deep and had abandoned the drilling. Skorpion Zinc is aid to have found the deposit after it had drilled two metres down in the same area where Rosh Pinah had abandoned the drilling.
Sources said Skorpion now claims that it discovered the deposit, and plans to upgrade its refinery at a cost running into billions of dollars to process both sulphide and oxide zinc. But Rosh Pinah claims that according to the joint venture agreement, it has the right for sulphide zinc and therefore should set up a its own refinery. Construction work at the new Gergarub mining project, which lifespan is estimated at 11 years, is expected to start within two years following the completion of a feasibility study.
Attempts to get a comment from Skorpion Zinc General Manager, Satish Kumar failed as he did not respond to an emails sent to him. Koen Wium, a board member for the PE Minerals declined to comment saying the parties were bound by a confidentiality agreement.
ROSH PINAH Zinc Corporation, which is majority owned by the London listed trading company, Glencore and Skorpion Zinc owned by Vedanta Resources, are trying to find common ground on how they can jointly develop the Gergarub zinc deposits. The Gergarub lies close to the mines, which are adjacent to each other.
The Namibian was informed by sources close to the talks on the Gergarub that the two companies are trying to interpret the terms of an agreement signed in 2005 by the previous owners of the mines, Exxaro and Anglo American.
Exxaro sold its shareholding in Rosh Pinah to Glencore last year. Local company, PE Minerals is the other shareholder.
In 2010 Vedanta Resources completed the acquisition of the Skorpion Zinc Mine from Anglo American plc.
The Namibian understands that the mines, which are now under new owners are trying to resuscitate the 2005 agreement by their previous owners before they can jointly develop the project. The differences are also compounded by the fact that Skorpion mines zinc sulphide in an open pit mine while Rosh Pinah mines zinc oxide in an underground mine.
“How the two mines will prospect at the Gergarub deposit is another taking point,” a source said in an interview who preferred not to be mentioned.
The source the two mines will decide in 2014 whether they will jointly develop the project.
“They have to decide on the structure of the joint venture, the percentages involved. Basically, it would take about four years to start mining,” said the source.
Another source said “dispute” over the Gergarub centres around who has the right for the off-take of the deposits found near Rosh Pinah.
In 2005, the parties entered into 51% for Skorpion and for 49% for Rosh Pinah joint venture partnership, and also agreed to share the drilling cost based on the shares each party owned.
Other sources said Rosh Pinah was the first to drill at the site where the deposit was found. It apparently only drilled one metre deep and had abandoned the drilling. Skorpion Zinc is aid to have found the deposit after it had drilled two metres down in the same area where Rosh Pinah had abandoned the drilling.
Sources said Skorpion now claims that it discovered the deposit, and plans to upgrade its refinery at a cost running into billions of dollars to process both sulphide and oxide zinc. But Rosh Pinah claims that according to the joint venture agreement, it has the right for sulphide zinc and therefore should set up a its own refinery. Construction work at the new Gergarub mining project, which lifespan is estimated at 11 years, is expected to start within two years following the completion of a feasibility study.
Attempts to get a comment from Skorpion Zinc General Manager, Satish Kumar failed as he did not respond to an emails sent to him. Koen Wium, a board member for the PE Minerals declined to comment saying the parties were bound by a confidentiality agreement.
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