Russian Renova Group is considering enhancement of its South African manganese operations

Renova group, one of the biggest private Russian conglomerates, headed by Viktor Vekselberg, with substantial presence in oil, energy, utilities, telecoms, mining and other sectors, including shareholding in the world's biggest aluminum producer Rusal, and in one of the world’s top-ten private oil producers TNK-BP, owns in South Africa the Transalloys manganese smelter in Mpumalanga and 49% of the United Manganese of Kalahari (UMK) manganese mine in the Northern Cape. Renova’s investments in those South African assets to date are close to $250-million.

The group is considering strategic options to enhance its global presence in the manganese business, Renova supervisory committee member Vladimir Kremer tells Mining Weekly Online in a video interview, and particularly through boosting of it's South African operations. Renova has extensive interest in developing of mining projects on the African continent, but manganese remains key focus area.

As part of this strategy Renova is evaluating the feasibility of building of a sinter plant to compliment it's mining operation at UMK and beneficiation operation at Transalloys. The plant would convert low-value fine fraction of manganese ore into high-value sinter product.

According to Kremer, apart from a well-known problem of a strong Rand, logistics, electricity supply and double-digit price increases remain the major challenges for the South-African manganese producers for the near future, particularly for those involved in beneficiation.

UMK’s manganese production is expected to rise to 2.7-million tons in 2012, but because of the current shortage of rail capacity, UMK would have to transport over a million metric tons of manganese to the ports of Port Elizabeth and Durban on road. The building of the sinter plant is meant to partially offset high transportation costs as well as to contribute to the increase in production of silico-manganese at Transalloys.

Partially owing to the need for energy security for Transalloys, Renova is also considering involving itself in generating power in South Africa as an independent power producer through co-generation at Transalloys as well as through development of large-scale solar farms, leveraging proprietary thin-film photovoltaic technology.

Renova intends to develop this new business in alliance with it's BEE partners in UMK represented by the company Magestic Silver Trading that owns the remaining 51% stake in UMK. That relationship, according to Kremer, is a true example of successful implementation of South Africa's BEE strategy, that has been proven by development of a R1.25bn mining project at UMK.

Kremer also sees potential for a possible partnership between South Africa’s State-owned rail enterprise Transnet and a State-owned Russian rail counterpart to boost manganese logistics, and willing to facilitate the process within the framework of the South-African-Russian Business Council which he co-chairs from the Russian side.