Africa-Press – Eswatini. The investment of over E150 million towards resuscitation of the Ngwenya Iron Ore Mine has been projected to bring vast economic benefits into the kingdom.
Apart from the creation of 400 jobs when the mine becomes fully operational, it has been forecasted that there could be an average annual contribution of E50 million in Pay As You Earn (PAYE) and other taxes together with royalties projected during the first five years.
This was disclosed in the environmental audit report (EIA) for which details resuscitation plans of the mine. The report has since been made available at Ngwenya Town Board and other public offices in the country. The liquidator had assigned R3 Services to conduct the environmental audit and submit the report in compliance with the environmental audit, assessment and review regulations 2000.
It has been disclosed that mining activity in Eswatini has generally been muted for the past decades. The report stated that there was a welcome jolt in the activity in 2011 when the Ngwenya iron ore mine started operating. The Central Bank of Eswatini reports indicate that the Ngwenya Iron ore mine contributed significantly to minerals exports during its operations.
“As a result of the reopening of the iron ore mine, an average annual contribution of E50 million is projected in PAYE, taxes and royalties for the first five years of operation,” reads the report in part.
The report indicated that at the height of its operation in 2012 the mine also almost single-handedly contributed one billion Emalangeni to the Eswatini exports in this sector.
According to the report, there unfortunately has been no activity to substitute this contribution in the period following the mine’s closure in 2014. It was said this gap in the economy was the prevailing status quo.
Production
It was mentioned that iron ore production, which commenced in the last quarter of 2011, recorded a 22 per cent increase to 1.26 million metric tonnes in 2013 from 1.03 million metric tons in 2012. The iron ore mining company, according to the report invested a sum of E300 million in 2012 and 2013 commissioning a treatment plant and grinding plant that was aimed at improving its product quality.
“The completion of the two plants resulted in more iron (and less waste) extracted and transported compared to the previous year when the project was initiated. The improvement in quality significantly enhanced the value of sales of iron ore,” an extract from the report read.
It was stated that extracts worth E558.6 million were exported to Mainland China in 2013 compared to E393.7 million exported in 2012. The report stated that weak global demand and oversupply kept minerals prices on a downward trend in 2015.
It has been disclosed that due to the drastic fall in minerals prices particularly iron ore prices, iron ore production was terminated in September 2014 and it remained closed. It was estimated that the closure of the iron ore mine resulted in an average loss of at least E400 million worth of revenue in 2016 alone and this figure was projected to have increased over the years.
The report stated that government invited investors through the liquidator to take up the business opportunity, which has tangible economic benefits to the nation.
“The package for Mwelase Mining Eswatini included a mining lease together with all the necessary statutory permission transferred from SG Iron Ore Mining Pty Ltd to Mwelase Mining Eswatini Pty Ltd in order to resume the operations without any time delays.
The liquidator will then clear all the debtors of the SG Iron Ore Mining Pty Ltd from the liquidation proceeds and Mwelase Mining Eswatini Pty Ltd will be free from any liabilities of the previous operator,” it was disclosed.
It was also stated that the past operations liabilities inclusive of environmental liabilities lied with the liquidator, however as an on-going concern, the site would be brought to a better workable environment consistently being improved during the resuscitating operations.
According to the report the Mineral Management Board (MMB) succeeded in getting Mwelase Mining Eswatini Pty Ltd as an investor to take over the operations and submitted their recommendations to His Majesty King Mswati III, who approved for the grant of mining license to process these iron ore dumps.
The deadline for the submissions of comments in the released report which contains the comprehensive mitigation plans for the proposed resuscitation of the mine is October 10.
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