Home | News | E7BN MINING PROJECT STOPPED, LICENCE REVOKED

E7BN MINING PROJECT STOPPED, LICENCE REVOKED

14/01/2024 17:24:00 Mfanukhona Nkambule

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BULEMBU – The mining licence given to a Mauritius- based company to extract gold from tailings at Bulembu has been revoked.

It could not be immediately ascertained why the Minerals Management Board (MMB) advised the King to cancel the licence.Asked what happened to the mining project that was launched by His Majesty the King in 2016, Robert Biyela, the Commissioner of Mines, said a decision was taken in 2022 to revoke the licence. When he was asked about the reasons for cancelling the licence, Biyela said it was difficult to give details on a matter concerning a person who was still alive and could be the one better suited to shed light on what actually happened, leading to the revocation of the lease.

Lloyd Birell, the Chief Operating Officer of Salamander Mining, had not responded to questions on why the licence was revoked or whether they were happy with the Board’s decision. Kobolondo Mining’s ambition was to make use of the minerals available at the defunct Bulembu Havelock Mine, in the northern part of Eswatini.

Defunct

Minerals such as gold, magnesium, chrysolite, nickel and chrome that need to be extracted from the tailings are believed to be in abundance at the defunct mine. EmaSwati in the northern part of Eswatini had anticipated job opportunities after the King had launched the project. “The licence for the mining project to which you are referring was revoked in 2022,” the commissioner said. He did not answer the question on why the licence was revoked.

A business paper prepared for investment institutions dated July 2020 and seen by this publication states that the Kobolondo project status had completed the following:

Scoping phase (completed);
Competent persons report (completed);
Resource evaluation (completed);
Environmental Impact Assessment (completed);
Environment licence (pending – subject to orphanage relocation plan);
Salamander Mining, which prepared the report on the Kobolondo project, stated that it (project) was a high yielding investment opportunity with an investment of E1.8 billion (US$100 million) required for the first phase.

The first phase was to see roaster production at 20 000 tonnes per month, translating to 240 000 tonnes per year. At that level, the project had a net present value of E7 billion (US$400 million). According to the documents, during the initial phase, the company had anticipated producing 493 700 tonnes of magnesium sulphate per annum, with a revenue of E2.597 billion. It is said that the investment also included the provision of seed funding to restart the Eswatini Gold Mining Industry, the value of which was exponentially incremental to the returns from the mining project.

Kobolondo Mining (KMS) is an Eswatini-registered company jointly owned by Salamander Mining International (SMI), the Ingwenyama in Trust for the Nation and the Government of Eswatini. Salamander is based in Mauritius.

Rehabilitate

KMS had been granted a mining lease to rehabilitate the tailings and extract, process and upgrade commercially viable minerals, primarily magnesium, nickel and iron, over the extended lease period of 20 years. It must be said that Kobolondo Mining had also obtained a mining lease to rehabilitate the abandoned chrysotile tailings facility at Bulembu, which remained from the now defunct Bulembu Havelock Mine. This also happened in November 2016.

The company was unveiled to the Bulembu traditional authorities and Bulembu Ministries by the Minerals Management Board (MMB) during a function held at the Bulembu Community Hall. The then MMB Chairperson, Winston Lomahoza, highlighted that they made a thorough analysis of the scope and implications of the intended work and came to a conclusion that this was a beneficial endevour to the Eswatini nation and government.

This was after the company had submitted a proposal to rehabilitate the dumps. Lomahoza said the MMB conducted a due diligence in March 2015, at an operation owned and operated by a technical partner of the company, Birrell Mining International (BMI) at a gold mine in Pilgrims Rest in the Mpumalanga Province, South Africa, to show the gold processing and beneficiation. “BMI demonstrated that they can efficiently recover gold from an ore or gold bearing or like the dumps at Bulembu. The Board confirmed that BMI is a specialist dumps reclamation entity with operations found in South Africa,” remarked Lomahoza. “BMI has a state-of-the-art plant, equipment and expertise in the field of reclamation of dumps.”

Invest

The then Hhohho Regional Administrator (RA), Prince Tshekedi, now late, had said the King had seen it fit to give the Bulembu Mine a second chance. He thanked Kobolondo Mining for choosing to invest in the country at a time when the country needed jobs. It must be said that His Majesty King Mswati III granted Kobolondo Mining a 10-year mining lease for the rehabilitation of the tailings.In terms of the Mining Act, Kobolondo Mining could have been owned by the King in trust of the Eswatini nation (25 per cent), government (25 per cent) and the remaining 50 per cent held by Kobolondo Mining International (KMI) based in Mauritius.

But, it has turned out that Salamander Mining jointly owns Kobolondo Mining. In June 2017, Kobolondo Mining and Bulembu Ministries Eswatini (BMS) reached an agreement that gave the former the right to purchase the farm and infrastructure of Bulembu. That was subject to certain conditions and regulatory approvals.

Activity

The BMS had purchased the village and surrounding farm in 2006 and infrastructure of Bulembu following the closure and liquidation of the Havelock Asbestos Mine. At the time, the village was almost deserted, with limited economic activity. What remained was the remnants of the old mining community and its operations. Over the past years, BMS restored the town of Bulembu through a joint strategy of community care and community enterprise. This was achieved through starting several businesses, including Bulembu Honey, Bulembu Water, Bulembu Country Lodge, a dairy and a timber business. Development resulted in the village of Bulembu having an integrated and comprehensive childcare programme for 380 vulnerable children.

Welfare

Following the granting of the licence to rehabilitate the abandoned tailings dump, BMS’s priority was to ensure the welfare of the children in their care, away from the environmental hazards normally associated with rehabilitation activities. The relocation planning process was expected to take some 18 months. According to the agreement, Kobolondo was expected to finance the relocation of the childcare programme in early 2019, in anticipation of the rehabilitation and resultant production processes.

In addition, Kobolondo was expected to make annual corporate social responsibility contributions to BMS for the life of the project to assist with the ongoing sustainability of the childcare programme.Kobolondo was to continue to work closely with BMS in managing the relocation to a new site. That was to include minimising the impact on the community, as well as those who were to remain in the village.

One of the executives of BMS had said at that time: “The agreement that we signed will see the continuation of the good work started by BMS, as well as the rehabilitation activities at Bulembu by Kobolondo, in line with His Majesty’s wishes within the mining lease.”
Sue Elsey, who was the CEO of Kobolondo, had mentioned that the next 18 months would involve a great deal of hard work and discussions with all those involved in the planning for the relocation and the village.

Kick-start

At that time, it was projected that a sum of E550 million could have been the adequate capital to kick-start the project. Word went out that the venture could eventually give back billions of Emalangeni in dividends and taxes of several years.This is due to the fact that there were presumably 48 million tonnes of unrehabilitated mining dumps at Bulembu area and these were said to be rich in minerals, particularly the gold. As it were, the project was necessitated by the fact that the asbestos mining dumps posed a danger to the environment and humans. It was mentioned that the rehabilitation would not only bring in revenue, but would also restore the environment by rehabilitating the mine dumps.