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17/04/2024
Mining News

The Chinese construction company that silently snapped up tantalite deals in Namibia

HeBei Xinjian Construction Company has silently made inroads into lithium and tantalite mining in southern Namibia.

The company was established in August 2013 in Namibia, but its parent company, HeBei Xinjian Construction Group, was founded in July 1952.

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The companies’ core business has been housing construction, decoration, industrial and civil equipment installation, plumbing, electrical and instrument installation, real estate development, overseas project contracting, labour export, import, and export trading.

This was until June 2022, when an opportunity arose to snap up Kazera Global’s shares in African Tantalum, which owned the Tantalite Valley Mine in southern Namibia.

In December 2022, HeBei Xinjian Construction acquired African Tantalum (Aftan) for US$13m. Aftan held London-based Kazera Global’s shares in the Tantalite Valley project in Namibia.

Tantalite Valley Mine

A 50-km square mountainous area located about 30 km south of Warmbad on Umeis Farm 110 and Kinderzitt Farm 132 in the Karas region is called Tantalite Valley. Warmbad, in Karasburg East constituency, is 758km from the capital city, Windhoek.

There are over 50 exploited pegmatites mined by small-scale farmers until the mid-1970s when Steen Severin, a Danish-Namibian, took over using a shelf company called Tameka Shelf-company 4.

The shelf company owned the two farms – Kinderzitt 132 and Umeis 110 – under Tantalite Valley Estates, while the Warmbad Investment Holdings, for the locals, provided labour. The Tantalite Valley Estates (49%) and the Warmbad Investment Holdings (51%) operated the Tantalite Valley project under the Namibian Tantalite Investments.

The Tantalite Valley mine received its licence 77 in February 2001. The licence is valid for the life of the mine or an initial period of 25 years, renewable up to 15 years at a time.

An Australian company, Magnum Mining and Exploration, acquired a 100% interest in Namibian Tantalite Investments in May 2006. It paid Severin N$8m (A$1,7m) for shares in Tameka and gave 15 million shares valued at ($7.1m (AU$1.5m) to Namibian Tantalite Investments shareholders.

Kennedy Ventures plc buys Afritan

When Magnum acquired the Tantalite Valley project, London-based Kennedy Ventures also bought a 75% stake (N$11,9m) in the African Tantalum Pty Ltd from some private investors in August 2014.

Kennedy Ventures paid N$8m cash and issued 4.52 million shares for the stake in African Tantalum (Afritan), which wanted to buy a 60% stake in the Tantalite Valley Project from Magnum.

Aftan would assume responsibility for funding and operating the Tantalite Valley project with an assignable 100% interest in any revenues generated in the 30 months following completion.

Kennedy Ventures met all the sales agreement conditions in December 2014.

Magnum also announced that it had gone into a joint venture through a sales and purchase agreement with Afritan for a 60% sell-down of the Tantalite Valley mine.

Afritan met all the conditions of the sales and purchase agreement in January 2015. Part of the agreement was that Afritan would manage and fund the Tantalite Valley Mine in consideration of 100% revenue until August 2017. Magnum retained a minority interest.

In July 2015, Afritan completed a long-term offtake agreement with an unnamed major leading manufacturer of electronic components.

Kennedy Ventures, through Afritan, acquired the remaining 40% interest in the Tantalite Valley Project and Tameka Shelf Company in September 2015 from Magnum for a cash consideration of N$7m, with plans to start production in Q3 2015.

Afritan shipped its first tantalite consignment of 285kgs of high-grade in December 2015 and planned to produce 10,500 tonnes monthly.

Kennedy Ventures changes name to Kazera Global

Kennedy Ventures announced that it woud start operating under Kazera Global plc on 12 March 2018.

But by June 2018, the company had suffered £1.1m losses after refinancing with £3.75m after shipping out three consignments of 51% high-grade tantalite.

In June 2020, Kazera Global increased its stake in Afritan by acquiring 25% interest in Aftan from Warmbad Investment Holdings (Pty) Ltd.

Negotiations with HeBei Construction started in March 2021 when Kazera Global said a Namibia investor had agreed to buy equity for €9,130,000 via convertible loans at €0.03142 per share.

HeBei paid the first tranche of US$ 100,000 on 26 July 2022 and another US$ 400,000 on 17 August 2022, with the final payment bringing the total to US$13m done on 20 December 2022.

The HeBei, Arcadia Minerals deal

Arcadia Minerals Ltd is a diversified exploration company targeting a suite of projects aimed at Tantalum, Lithium (Clays, Brines & Hard Rock), Nickel, Copper and Gold in Namibia.

The Canadian company owns the Swanson Tantalum Project and the Kum-Kum Nickel Project under the Orange River Pegmatite Pty Ltd in the Karas region, the Karibib Copper and Gold Project in the Erongo region under the Goas Pegmatite Exploration (Pty) Ltd, and the Bitterwasser Lithium-in-Brines Project under the Brines Mining Exploration Namibia (Pty) Ltd.

HeBei Construction was interested in the Swanson Tantalum Project under EPL 5047, about 15km north of the Orange River. The Swanson mine, under licence 223, is in the 100% HeBei-owned Tantalite Valley area.

Arcadia announced on 28 November 2022 that HeBei had agreed to invest US$7,5m into the Swanson Tantalum Project in return for a 49% interest in offtake of lithium produced as a secondary stream of product following the production of Tantalum concentrate.

The investment comprised cash, machinery and services with a minimum of US$2.5m payable to Kazera Global in cash in instalments, with the final instalment by 31 January 2023.

The transaction would become effective after HeBei had paid a minimum of US$7m to construct and commission a Multi Gravity Separation processing plant.

Hebei started the construction of the road between the Swanson Mine Site and the Plant Site in July 2023 to allow for the carriage and installation of plant and equipment – jaw crusher, cone crusher, feeder, screen and conveyors – currently sourced from Namibia, the Republic of China and the United Kingdom.

A May 2023 definitive feasibility study into the Swanson tantalum/lithium project estimates that the mine will produce an average of 12,500 tonnes a month over a life of eight years.

The DFS also put the post-tax net present value at A$15.36m, internal rate of return of 25.4%, life-of-mine earnings before interest, taxes, depreciation and amortisation of A$48.35m and annual average free cash flows estimated at A$6.38m.

Arcadia Minerals chairperson Jurie Wessels says the financials were compelling, and HeBei’s construction funding gives the Swanson project great value.

 

Source: Extractor

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