By Mbatjiua Ngavirue Plans by Otjozondu Mining to develop a new manganese mine at the small Otjozondu settlement 100 kilometres northeast of Okahandja are at an advanced stage. The company expects the Ministry of Mines and Energy to grant it a mining license before the end of this month, after which actual production will start. Preparation of the mining site has already started, as well as the sourcing of earthmoving equipment from Rex Quip, and two jigs from Gravmax in South Africa. The company has apparently already spent roughly N$10 million on exploration and preparatory work with the investment needed for the first phase of the new mine estimated at N$30 million. The company will only make the N$30 million investment once Mines and Energy grants the mining license, with approximately half the amount coming in the form of a loan from Bank Windhoek. Otjozondu Mining held a consultative conference in Windhoek this week to consult major stakeholders involved in the project, including Bank Windhoek, Nampower, TransNamib, Namport and other partners. Speaking at the conference, Minister of Mines and Energy Erkki Nghimtina said he was happy to see that a company that only recently applied for a mining licence is ready to start mining so soon. Nghimtina said the new mine would have important downstream benefits because it would provide not only direct employment, but also work for contractors and service providers. The new Otjozondu mine, he added, is only one of four or five other new mines the government expects to open within the next two years, which he hopes will lead to increased employment opportunities. Manganese mining at Otjozondu came to a virtual standstill in 2002 when previous operator Purity Manganese scaled down its activities after retrenching 130 workers. Mining experts however never regarded Purity’s mining as a serious operation because the company only produced low-grade ore, making it economically unviable. Purity Mining eventually collapsed in 2005 amid charges of fraud brought against Israeli owner Boris Bannai in a U.S. federal court for failing to deliver manganese a customer had already paid for. The new company Otjozondu Mining – backed by a consortium of reputable, well-established regional and international mining and metals trading companies – appears to have a more promising future. The consortium consists of a group of Namibians led by David Shimwino, MetalCorp Group of Germany and Henbase 3366 (Pty) Ltd, an associate company of the company that owns the Swellendam Manganese mine in South Africa. The majority shareholder in Otjozondu Mining, MetalCorp Group, is a German-based international company involved in mining, metallurgical processing and metals trading in 18 countries around the world. Chief Executive of Otjozondu Mining Dr Hans Wilhelm RÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¼nz says the company based the decision to revive mining at Otjozondu on two factors. Firstly, the significant increase in demand for manganese from the rapidly expanding economies of China and India, which has led to good prices for manganese. Although the price for manganese has fallen from its most recent peaks, all the projections available indicate prices are likely to remain good in the medium and long-term. Otjozondu Mining has a secure long-term contract with international metals trader Oreport for delivery of manganese F.O.B. at Walvis Bay. RÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¼nz said that the company could make a good profit at the F.O.B. price it receives from Oreport, and would still make money even if there were a slight fall in prices. Improved geological surveying technology is the other factor that influenced the decision to invest in the new mine. He said new satellite imaging technology led to the discovery that manganese reserves at Otjozondu are much larger than previously thought. The company has applied for a mining license on 7,000 hectares that were part of the first EPL of 27,000. Mines and Energy has granted the company a further three EPL’s on an additional 110,000 hectares in the surrounding area. According to RÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¼nz, Otjozondu Mining has found proven reserves of 15 million tonnes of manganese ore on the first EPL. The ore is in the form of both nodules and hard rock bodies, with 10-20 percent in the form of nodules and the rest in hard rock. The 15 million tonnes of proven reserves is an assumption based on 550,000 tonnes of nodules found as proven reserves on 300 hectares alone. Otjozondu Mining is busy preparing the site for a processing plant on 200 hectares it has secured through a long-term rental contract. RÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¼nz said that after beneficiation the ore produced at Otjozondu would have manganese content of 48 percent, which is considered very high-grade ore. Once mining commences, the company will transport manganese ore from Ojtozondu by heavy road motor-trucks to Okahandja from where TransNamib will transport it by rail to Walvis Bay. The company drilled boreholes on the 200 ha and found sufficient water to meet all the needs of the mine.