Premier African Minerals (PAM), which owns 49% of the RHA tungsten project in Bulawayo, Zimbabwe, has signed a US$6M funding agreement from the National Indigenisation & Economic Empowerment Fund of Zimbabwe (NIEEF). The investment will be structured as share capital and PAM will simultaneously capitalise an equivalent amount from its existing loan account.
PAM will continue to manage the mine for another five years through its subsidiary ZimDiv Holdings, as well as retain control of the plant and equipment. RHA is expected to restart production later in 2019.
George Roach, CEO of PAM, noted that the funding would allow for upgrades that were expected to result in “major operating cost reductions” including an electricity grid connection.
The RHA pit was reopened in 2015 but, due to the pit failing to deliver ore at the anticipated grade, PAM achieved only sporadic production in 2016 and 2017. In January 2018, PAM started funding discussions with NIEEF, its 51% partner in the project.
Roskill’s tungsten supply model forecasts RHA to come back online this year with an initial output of 100t of concentrate (contained W), joining new tungsten projects from Saloro (Barruecopardo) and W Resources (La Parrilla), both located in Spain.
Market participants will be watching new project developments closely, as output from China – the world’s largest tungsten producer and consumer – is expected to decline in 2019, as a result of ore grade depletion at longstanding operations. Should Chinese concentrate imports increase, this could potentially create further competition for concentrates produced in the rest of the world.
Roskill’s NEW Tungsten: Global Industry, Markets & Outlook report was published in March 2019 with supply, demand and price forecasts to 2028. Click here to download the brochure and sample pages, or to access further information.