Manganese prepayment plans boost Otjozondu mine
By Business Reporter
PREMIER African Minerals’ 19 percent-owned subsidiary, MN Holdings, has advised that the offtake partners of the Otjozondu project in Namibia are reviewing an existing uncommitted credit facility to increase prepayment for manganese ore from the project.
MN Holdings is the owner and operator of Otjozondu mine, which is situated 450km east of Walvis Bay.
The offtake partners want to pay two equal tranches of US$300 000 each in the coming months.
This planned increase in offtake finance will ease the funding requirements that MN Holdings has to increase the mine production rate.
In a statement release last week, Premier African Minerals said the prepayment will also help fund the lead time between production, shipment and final payment on outturn at the destination port.
Local logistics, to some extent still affected by Covid-19, are limiting shipments to a load per week, each containing about 1 405t of manganese lump ore.
To help overcome this, Otjozondu plans to relocate the container loading facility to Walvis Bay from where it is currently situated at Okahandja. The mine will then have ore railed in bulk to Walvis Bay.
Premier African Minerals explains that this eliminates the need to rail empty containers to the load siding, takes out any potential demurrage charges associated with any rail delays or other breakdowns at the loading siding, and will allow for continuous filling of containers at Walvis Bay and a much more rapid turnaround of bulk rail cars from the siding.
“This is a significant step in the eventual change to bulk shipment as opposed to containerised, with important cost and efficiency benefits.”
Earlier in the year, Premier African Minerals agreed to acquire an additional two percent stake in MN Holdings which has an exploration target of 30 million metric tonnes grading 23 percent-27 percent of manganese.
At the time Premier African Minerals chief executive George Roach said: “This is another small step on the way to becoming independently cash generative, which will assist in our plans for the restarting of production and in due course, the long-awaited exploration and development of Zulu Lithium.
“MNH is one of very few manganese producers able to lay claim to remain cash positive and profitable through the recent fall in manganese prices, and with the recent reversal and more positive outlook for manganese, our association with MNH bodes well for the future.”
In July last year, Premier African Minerals and Cambrian agreed to provide a US$1.35 million loan with an annual interest of 10 percent to MNH.