Shaw River in talks with potential suitors
Shaw River Manganese, developer of the Otjozondu manganese project near Otjo say it is in talks with potential investors interested in jointly developing the project.
In an interview with the Economist, Shaw River Country Manager Braam Jankowitz said the company is in talks with unnamed investors from Australia, the United Kingdom and southern Africa who are interested in the project.
Jankowitz’s comment comes at a time when minority shareholder in the Otjo project, Oreport saw its stake reduce from 16% to 12.8% after the South African-based company elected not to fund its share of the project costs Oreport’s shareholding in the project is expected to be further diluted as the project progresses towards production.
Currently, Otjozondu Holdings, a wholly-owned subsidiary of the Australian manganese focused mineral exploration company, owns an 87.2% stake in the Otjozondu Manganese Project located 150km north-east of Windhoek.
Jankowitz told the Economist: “In the recent past we have met with a couple of investors especially at Indaba (Mining Indaba) and elsewhere and the guys in Perth are busy at the moment working through the different scenarios to see which is the most suitable investor they would pick. As soon as that study is completed we will go forward with our plans for this year.”
Shaw River is also in talks with some of the local role players who are expected to own a stake in the project. Jankowitz, however, said determination of the stake which will be given to local companies is subject to the outcome of talks with the international investors. Nevertheless, he envisages a “win win situation” for Shaw River and the local role players.
“So we have gone on that route already talking to people, but obviously it is much easier once we have all financing in place, we are in production or we are busy building the plant, then it is much easier to bring those guys in,” Jankowitz said.
Shaw River and its local subsidiary were recently pleased after the Ministry of Mines and Energy decided to withdraw its notice to cancel the company’s mining licence. In October 2013, Shaw River received a notice from the mines ministry which stated that the company may be in breach of its mining license conditions and that the company had until 31 December 2013 to make submissions to the ministry, including how the company intended to remedy any such breaches.
As part of the company’s submissions to the ministry Jankowitz said they had mentioned that they will only look at local mining contractors to mine on their behalf. He said the whole business plan is very much based on a contracting model at this stage and three local companies have already been shortlisted for contract mining.
But pressed to further explain the details, Jankowitz said: “I think it will be unwise at this stage because none of the deals have been finalised. I think it would be a bit premature to say we are talking to company A in terms of shareholding, we are talking to company B in terms of mining.”
Currently the company is delineating a specific area where mining will take place. This process is expected to be completed by the end of this month or early April and start up production have been scheduled for later this year. Manganese from the Otjo project will be shipped to China, but there are also plans to market the manganese in other countries such as India and the Phillipines. Otjozondu Holdings employs between 35 to 40 people, including workers at the company’s head office in Windhoek. The number is expected to double once the mining is up and running.