Platinum in South Africa 2008 - June 2008 - Creamer ...
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June 2008 Platinum in South Africa 2008
Platinum
Contents June 2008
Sources of platinum 1
South Africa 1
Russia 2
Canada and North America 3
Zimbabwe 4
Global Market 5
Platinum demand 5
Automotive demand 5
Jewellery demand 6
Industrial and investment demand 6
Platinum supply 6
Platinum price 6
Outlook 7
Legislative and policy environment 8
South African PGM production: Western Limb 15
South African PGM production: Eastern Limb 16
Platinum projects currently under development in South Africa 17
Main participants
Anglo Platinum 21
Impala Platinum 31
Lonmin 39
Northam Platinum 43
Aquarius Platinum 46
African Rainbow Minerals Platinum 50
Royal Bafokeng Resources 53
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Platinum
Contents June 2008
Junior platinum companies and explorers
Jubilee Platinum 54
Lesego Platinum 56
Mmakau Mining 57
Nkwe Platinum 58
Platmin 59
Platinum Group Metals 60
Ridge Mining 61
Wesizwe Platinum 62
Xstrata 63
The material contained in this report was compiled by Hilary Klopper and the Research Unit of Creamer Media (Pty) Ltd, based in
Johannesburg, South Africa. To contact Creamer Media call +27 11 622 3744 or email subscriptions@creamermedia.co.za.
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Platinum June 2008 List of abbreviations ACP – Angloplat Converting Process Afplats – African Platinum Angloplat – Anglo Platinum AQPSA – Aquarius Platinum South Africa Arm – African Rainbow Minerals ArmGold – African Rainbow Minerals Gold BEE – black economic empowerment BIC – Bushveld Igneous Complex Bits – bilateral investment treaties BMR – Base Metals Refinery BRPM – Bafokeng Rasimone Platinum mine CTRP – Chromite Tailing Retreatment Plant DME – Department of Minerals and Energy DTI – Department of Trade and Industry EMPR – environmental management programme report EPM – Eastern Platinum Mine ETF – exchange-traded fund GFSA – Gold Fields South Africa ICSID – International Centre for the Settlement of Investment Disputes Implats – Impala Platinum IRS – Impala Refining Services Kalplat – Kalahari Platinum Lonplats – Lonmin Platinum MFIC – Molopo Farm Igneous Complex MMZ – main mineralised zone MPRDA – Mineral and Petroleum Resources Development Act MSB – massive sulphide underground body Mvela – Mvelaphanda Resources Nkwe SA – Nkwe South Africa oz – ounces PCMZ – peridotite chromititic mineralised zone PGM – platinum-group metal PLA – Platinum Australia PMR – Precious Metals Refinery PPRust – Potgietersrust Platinum PSA – pool and share agreement PTM – Platinum Group Metals Rom – run of mine RBN – Royal Bafokeng Nation RBR – Royal Bafokeng Resources www.researchchannel.co.za
Platinum June 2008 RPM – Rustenburg Platinum Mines SavCon – Savannah Consortium SMC – Selous Metallurgical Complex UG2 – Upper Group 2 ULP – ultralow profile WBJV – Western Bushveld JV Zimplats – Zimbabwe Platinum Mines 4E PGM – four element platinum-group metals – platinum, palladium, rhodium and gold www.researchchannel.co.za
Platinum June 2008
Sources of platinum
Platinum is only produced in five countries around the the largest metals-bearing intrusions in the world, the
world. Of these South Africa and Russia are the largest Bushveld Igneous Complex (BIC).
producers, with small amounts of the metal also being
produced in the US, Canada and Zimbabwe. The Bushveld Igneous Complex
Key:
Platinum supply by region 2003-2007 Anglo Platinum
Impala
Million ounces Lonmin
PPRust
Polokwane
Others
Lebowa
Messina
Paschaskraal
South Africa Russia North America Others Amandelbult Twickenham
Northam
Marula
Modikwa
7 Union Kennedy’s Vale
Der Brochen
Two Rivers
Booysendal
6
Waterval Crocodile River
Bafokeng- Everest South
Rasimone Impala Sheba’s
5 Rustenburg
Ridge
Blue Ridge
Pretoria
Kroondal Pandora
Marikana Lonmin
4
Source: Johnson Matthey
3
2 The BIC hosts over one-half of the world’s platinum,
chromium, vanadium and refractory minerals.
1
The complex covers over 66 000 km2, and is divided
0 into an eastern and western limb, with a further north-
2003 2004 2005 2006 2007
ern extension, known as the northern limb. The intru-
sion is located in the northern reaches of South Africa,
Source: Johnson Matthey Platinum 2008
cutting through the Mpumalanga, North West and Lim-
popo provinces. It has a series of distinct layers, three
South Africa of which contain economic concentrations of platinum-
group metals (PGMs). PGMs include iridium, osmium,
A total of 5,29-million ounces of platinum were pro- palladium, platinum, rhodium, and ruthenium.
duced in South Africa in 2006, and platinum research
company Johnson Matthey stated that 5,04-million The principal PGM-bearing reefs in the BIC are the Me-
ounces were be supplied by the country’s mines in rensky reef and the Upper Group 2 (UG2) reef, which
2007. occur around the eastern and western limbs of the
complex. A third PGM-rich layer, the Platreef, is found
only on the northern limb at the north-eastern bound-
PGM Supplies: South Africa ‘000 oz
ary.
2007 2006
Platinum 5 220 5 290 The Merensky and UG2 reefs contain most of the
Palladium 2 795 2 905 world’s known reserves of PGMs. The Merensky ore-
Rhodium 695 690 body, which is about one metre thick and has a thin
Source: Johnson Matthey Platinum 2007 Interim Review
seam of chromite along the top and bottom, has been
the principle source of PGMs since it was first worked
Precious metals research and consultancy, GFMS, in 1925.
indicated in its GFMS 2008 Platinum Survey that
platinum production from South African mines in 2007 The UG2 reef, the structure of which is fairly uniform
was 5,07-million ounces. throughout the BIC, is rich in chromite, but lacks the
Merensky’s gold, copper and nickel by-products,
South Africa’s platinum mines are converged on one of though its PGM reserves may be almost twice those of
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1Platinum June 2008
the Merensky reef. The exploitation of the UG2 orebody technological developments in the South African gold
began in the 1970s. mining industry have made deposits feasible at a depth
of four kilometres and this technology could be trans-
The Merensky and UG2 reefs are narrow, and both have ferred to PGM mines over time.
been mined using narrow reef methods, with many op-
erations continuing to use these methods today. How- It is estimated that 200-million ounces of PGMs have
ever, mechanical and hybrid techniques are progres- already been mined and, between the depths of 1 000
sively being implemented by new and existing mines, m and 5 000 m, 6,8-billion ounces of PGMs still remain,
whereby drilling may be carried out either using con- which, at current extraction rates, could meet demand
ventional hand-held pneumatic drills, or by means of for at least 780 years.
low-profile machines equipped with specialised drilling
equipment. The ore is subsequently cleaned from the
stopes using low-profile load-haul-dump vehicles. Russia
The Platreef, at between 5 m and 90 m thick, is much Platinum production in Russia declined to 910 000 oz in
wider than the other reefs, and is mined using open- 2007 from 920 000 oz in 2006.
pit methods. The Platreef was not exploited on a large
PGM supplies: Russia (‘000 oz)
scale until 1993. Opencast mining is also used on a
smaller scale to exploit the UG2 and Merensky reefs 2007 2006
where they outcrop. Platinum 910 920
Palladium
In 1999, a new estimate of the platinum and palladium
resources of the BIC was published in the South Afri- Primary production 3 050 3 220
can Journal of Science, estimating proven and proba- State sales 1 490 700
ble reserves of platinum and palladium at 203,3-million Rhodium 90 100
ounces and 116,1-million ounces respectively. Inferred Source: Johnson Matthey Platinum 2007 Interim Review
resources were estimated at 939-million ounces of plat-
inum, and 711-million ounces of palladium.
Platinum supplies from Russia come from three main
These figures stand to increase if other PGM-bear- sources: Norilsk Nickel, which produces platinum as
ing reefs in the BIC are mined, or if mining extends to a by-product of nickel mining in northern Siberia; allu-
depths below two kilometers. Drilling programmes are vial platinum producers, mainly in the far east of Russia;
investigating the Merensky and UG2 horizons below and sales from government-controlled stocks.
three kilometres, although a significant amount of ex-
ploration work will have to be carried out before these The large alluvial platinum deposits in Russia’s Ural
potential down-dip extensions can be categorised as a Mountains have been exploited since 1823. The de-
PGM resource. posits once represented the richest known underground
sources of platinum, but have since been stripped of
The capital investment required to work such deposits the highest-grade ore. From the 1920s, production
could be considerable, as working temperatures and from the Urals started to decline, to a point where the
transportation costs increase with depth. However, deposits now account for less than 1% of Russian plat-
Estimate of platinum and palladium reserves and resources in the BIC as of 1999
Region Proven and probable reserves million ounces Inferred resources million ounces
Platinum Palladium Platinum Palladium
Northern BIC – Platreef 9,9 11,3 136 136
Eastern BIC – Merensky reef 10,9 4,8 286 165
Eastern BIC – UG2 chromitite 38 32,7 306 301
Western BIC – Merensky reef 66,2 30,6 114 56
Western BIC – 78,3 36,7 97 53
UG2 chromitite
Totals 203,3 116,1 939 711
Source: Johnson Matthey
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2Platinum June 2008
Russian PGM mining districts and refineries
UNITED
KINGDOM NORWAY
SWEDEN
Kola Koryak
Peninsula
FINLAND
GERMANY
Norilsk/Talnakh
POLAND
BELORUSSIA
Prioksk Central Urals
RUSSIA Kondyor
Yekaterinburg
Krasnoyarsk
KAZAKHSTAN Novosibirsk
MONGOLIA CHINA
Source: Johnson Matthey Platinum 2004 pgm refinery pgm mining district
inum production. However, the region remains of inter- and, as a result, no platinum shipments were made in
est as a prospective source of platinum. Investigations the beginning of 2007. The Russian contracts were re-
are being conducted into the possibility of exploiting al- portedly being met from stocks abroad or metal leased
luvial platinum in the central Urals area that was too fine or bought from elsewhere, with no indications of when
grained to have been recovered by earlier mining op- shipments might return to normal.
erations. Formerly unmined placer deposits that have
been buried under sediment may also exist, whilst the
poorly explored northern Urals area offers the potential Canada and North America
to host as yet undiscovered alluvial platinum fields.
In 2006, North American platinum production fell by
Russia’s most important source of PGM reserves are 5% to 345 000 oz and, according to Johnson Matthey,
the PGM-containing copper-nickel deposits on the it fell further, to 325 000 oz, in 2007, owing to lower
Tamyr Peninsula, in northern Siberia. Exploitation of production from the former Canadian Inco mines, now
these deposits began in 1935. owned by Companhia Vale do Rio Doce, and the Still-
water mine, in the US.
In 1960, valuable copper-nickel deposits were discov-
ered at Talnakh. Four mines were developed there, all PGM supplies: North America (‘000 oz)
of which are still in operation. Small quantities of PGMs 2007 2006
are also produced from copper-nickel deposits on the
Platinum 325 345
Kola Peninsula and, in recent years, significant quanti-
ties of platinum have been produced from two alluvial Palladium 990 985
operations in the far east of Russia. The larger of these, Rhodium 17 17
Kondyor, is located in a crater-like bowl surrounded by Source: Johnson Matthey Platinum 2007 Interim Review
mountains in the Ayano-Maisk region of Khabarovsk.
The Koryak deposit is found on the Kamchatka Pe- The majority of PGMs produced in Canada are by-prod-
ninsula. Both operations are far-flung and experience ucts of nickel mining. The Sudbury Basin, in central On-
harsh winter weather. As a result, mining takes place tario, was discovered in 1883, and has the largest num-
only during the summer season, usually from May to ber of PGM-producing mines in the country. PGMs are
September. also extracted from the Raglan nickel mine,
in northern Quebec, and from a nickel complex, in Man-
Johnson Matthey has reported that in January 2007, itoba. In all of these orebodies, palladium is the princi-
new legislation was passed in Russia abolishing export pal PGM.
quotas for PGMs. As yet the new regulations have not
been finalised and approved by the relevant authorities PGM production in the US is restricted to the Stillwater
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3Platinum June 2008
and East Boulder mines, located west of Nye, in Mon- The Great Dyke is an igneous intrusion 30 km wide and
tana. The metals are extracted from the high-grade J-M 550 km in length, spanning almost the length of Zim-
Reef, with palladium accounting for about 75% of the babwe in a north-to-south direction. The dyke exhib-
PGMs mined, with the remainder being platinum. its horizontal layering, with distinctive zones of cer-
tain rock types being evident, and PGM-bearing ore is
found between the surface and 500 m in depth.
Zimbabwe There is the potential for platinum production in Zimba-
bwe to increase significantly in coming years, although
Johnson Matthey reported that Zimbabwe (and oth- the country’s political tensions and ambiguity on indig-
ers) produced 270 000 oz of platinum in 2006, while on enous equity ownership may impact on company plans
the back of increased production at both the Ngezi and to enter the country.
Mimosa mines, production for the country rose to 280
000 oz in 2007. However, the country’s economic crisis Junior greenfields explorer African Consolidated Re-
is impacting negatively on the industry, and a delay in sources, however, has insisted that the actual risk of
the completion of Mimosa’s incremental expansion has operating in Zimbabwe is not nearly as severe as is
been experienced. Further, Ngezi and Mimosa have perceived, and likens mining in Zimbabwe to “being
both experienced electricity supply problems. alone in Aladdin’s Cave.”
Platinum was discovered in Zimbabwe’s Great Dyke in Further, the weakening economic situation in the coun-
1925, but initial efforts at mining were for the most part try has made certain aspects of the exploration proc-
unsuccessful, and it is only in recent years that plati- ess cheaper, which could serve as an incentive to com-
num production has reached significant levels. panies to re-enter the country.
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4Platinum June 2008
Global Market
According to Johnson Matthey, the world’s largest refin- es in 2007, was up on the previous year’s demand of
er and fabricator of platinum, platinum demand in 2007 4,14-million ounces, and with global light vehicle pro-
was 7,03-million ounces. Platinum supply for the year duction set to exceed 70-million units in 2008, John-
was 6,55-million ounces, resulting in a supply shortfall son Matthey anticipates that demand will rise further, to
of 480 000 oz. According to the GFMS Platinum Survey 4,24-million ounces. However, the rising platinum price
2008, the shortfall was owing to a 370 000 oz drop in has led carmakers work towards cutting the amount of
South Africa’s production, the Survey predicts that the platinum required in autocatalysts, with development
market will suffer further setback in 2008 owing to the focusing on the use of palladium as an alternative to
South African power crisis. Demand in 2007 was up platinum.
on the previous year’s demand for 6,7-million ounces,
while supply was down, from almost 6,8-million ounces. The ongoing increase in the use of diesel engines in
Europe is a significant force behind the increase in de-
Platinum demand mand for platinum. Over 90% of the 2,11-million ounc-
es of platinum used in European autocatalysts in 2007
Automotive were used in diesel vehicles. Diesel vehicles made up
52% of passenger car sales in 2007, with some nation-
The automotive industry, which uses platinum in auto- al markets reflecting that three out of every four cars
catalysts, continued to dominate usage of the metal in purchased were diesel.
2007. Autocatalysts assist in the reduction of exhaust
pollutants. Platinum demand from the US automotive industry
Platinum demand from this sector, at 4,23-million ounc- remained relatively steady at 900 000 oz in 2007. Ve-
Platinum supply and demand
‘000 oz 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Supply
South Africa 5220 5290 5115 5010 4630 4450 4100 3800 3900 3680
Russia 820 890 890 845 1050 980 1300 1100 540 1300
North America 340 345 365 385 295 390 360 285 270 285
Others 280 270 270 250 225 150 100 105 160 135
Total Supply 6660 6795 6640 6490 6200 5970 5860 5290 4870 5400
Demand by application
Autocatalyst: Gross 4235 4140 3795 3490 3270 2590 2520 1890 1610 1800
Recovery (885) (855) (770) (690) (645) (565) (530) (470) (420) (405)
Chemical 395 380 325 325 320 325 290 295 320 280
Electrical 435 400 360 300 260 315 385 455 370 300
Glass 355 410 360 290 210 235 290 255 200 220
Investment: Small 25 25 30 30 30 45 50 40 90 210
Large 50 (65) (15) 15 (15) 35 40 (100) 90 105
Jewellery 1595 1620 1965 2160 2510 2820 2590 2830 2880 2430
Petroleum 230 185 170 150 120 130 130 110 115 125
Other 490 490 475 470 470 540 465 375 335 305
Total Demand 6925 6730 6695 6540 6530 6470 6230 5680 5590 5370
Average Price (US$) 1256 1143 897 846 691 540 529 545 377 372
Source: Johnson Matthey Platinum 2008)
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5Platinum June 2008
Jewellery demand
Demand for platinum 2003-2007
Million ounces
For the fifth consecutive year, platinum demand from
Autocatalyst Jewellery Investment
the jewellery sector fell in 2007, to 1,59-million ounces.
Industrial
(net) The strong and unstable market has posed a challenge
7
to jewellery manufacturers and retailers. Although con-
sumer purchasing of platinum jewellery remains solid,
6 stock rationalisation has been reported by the industry.
The recycling of used jewellery in the Asian market has
lead to headline demand figures, which fall below the
5
rate of manufacturing output.
4
Industrial and investment demand
3
In the industrial sector, demand for platinum grew by
2 2,14% in 2007, to 1,95-million ounces. Demand from
each of the chemical, electrical and petroleum refining
1 sectors rose, but platinum purchases by the glass in-
dustry fell.
0
2003 2004 2005 2006 2007
The use of platinum in hard-disks remains the driving
force behind an increased demand for the metal in the
Source: Johnson Matthey Platinum 2008
electrical industry, while global economic growth has
driven the need for the metal in bulk chemicals, explo-
hicle sales for the year were poor owing to credit re- sives and fertilisers.
strictions arising from the country’s sub-prime lending
crisis. However, demand for platinum was bolstered by Platinum supply
increased use of the metal on medium and heavy duty
diesel trucks. Falling demand for light duty vehicles is Global supplies of platinum fell by two per cent in 2007
likely to cause a one to two per cent drop in their man- to 6,55-million ounces. A large contributor the decline
ufacture, which will impact negatively on the US de- was a 370 000 oz reduction in the amount of platinum
mand for platinum, as will the continuing switch from sold by South Africa, as well as declines in production
platinum- to palladium-rich three way catalysts. from Russian and North American operations. Output
from Zimbabwe rose marginally in the year.
Demand for platinum in the Japanese automotive sec-
tor in 2007, at 615 000 oz, was slightly up on the previ- According to Johnson Matthey, output at South Afri-
ous year’s demand for 605 000 oz. Japan has lagged ca’s three biggest platinum producers was less than
behind other regions in replacing platinum in autocata- expected – safety concerns caused shutdowns at An-
lysts with palladium, although the large difference in the glo Platinum’s operations, a Lonmin furnace was out
price of the two metals means that the use of palladium of commission, and a strike at Impala Platinum in the
as a substitute is gaining momentum. third quarter of 2007, all of which led to reduced pro-
duction.
China was expected to become the largest Asian mar-
ket for passenger cars in 2007 with sales growing by Factors negatively affecting the industry in South Afri-
one million cars to 5,4-million, increasing autocatalyst ca, such as unstable power supplies, could lead inves-
platinum purchases to 210 000 oz. tors to cast their eyes towards Russia.
Globally, about 885 000 oz of platinum was reclaimed Platinum Price
from autocatalyst recovery in 2007, and this is set to in-
crease going forward owing to the rise in platinum load- Overall, the movements in the platinum price during the
ings on European diesel vehicles sold since the end of first nine months of 2007 reflected the growing tight-
the last decade. ness of the market. Months of relative calm were fol-
lowed by spells of high volatility linked to the wider eco-
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6Platinum June 2008
Platinum price 1999 - 2008 Outlook
Yearly 6/2/1998 – 6/2/2008
Plat Comdty – Last Price n.a. 2 000 Heavy-duty diesel is likely to remain a major driving
1 800
force behind an increase in platinum use, with the next
1 600 stage of European emissions regulations set to come
1 400
into force at the end of 2008, and US legislation set to
1 200 tighten in 2010, leading to a greater amount of platinum
1 000 being used in autocatalyst formulations.
800
600 The replacement of platinum by palladium in petrol cat-
400 alyst formulations should continue into 2008. Never-
Dec 31 99 Dec 29 00 Dec 31 01 Dec 31 02 Dec 31 03 Dec 31 04 Dec 30 05 Dec 29 06 Dec 31 07 Jun 2 08
theless, some support for platinum demand will come
Australia 61 2 9777 8600 • Brazil 5511 3048 4500 • Europe 44 20 7330 7500 • Germany 49 69 9204 1210 • Hong Kong 852 2977 6000
from rising vehicle manufacturing in China and India.
Japan 81 3 2301 8900 • Singapore 65 6212 1000 • US 1 212 318 2000
Source: Bloomberg)
The cost of platinum and the price differential between
nomic climate and issues relating to platinum supply. platinum and gold will continue to be a challenge for
jewellery manufacturers and retailers. Recycling of jew-
Doubts over supply led to a dramatic rise in the price of ellery in China and in Japan is likely to continue.
platinum in the first two months of 2008, with the price
reaching a record high of $2168,50/oz on February 21, The electricity crisis in South Africa has dampened
2008. Owing to the South African industry’s growth be- growth forecasts in the industry. In January all platinum
ing hampered by the country’s electricity supply crisis, mining operations came to a halt for five days, when
platinum supply in 2008 is set to remain tight, and pric- producers decided that it was not safe to continue min-
es are expected to remain high. ing and processing operations owing to a lack of guar-
anteed power. Although South Africa’s power utility Es-
Further, Johnson Matthey has stated that the subprime kom has guaranteed the mining industry some 90% of
mortgage crisis, which has contributed to weakness in its electricity supply, the market is expected to remain
the dollar, supported precious metal prices in 2007. volatile throughout 2008.
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7Platinum June 2008
Legislative and policy environment
The Mineral and Petroleum Resources Development nomic empowerment charter that will form part of the
Act (MPRDA), which came into effect on May 1, 2004, Department of Minerals and Energy’s (DME’s) regula-
was drafted in an attempt to formulate a regulatory tions and criteria for awarding prospecting and mining
framework for South Africa’s mining and minerals in- licences. The development of the charter was provid-
dustry. The aim of the legislation is to correct histori- ed for in section 100 of the Mineral and Petroleum Re-
cal imbalances in the industry caused by the legacy of sources Development Bill, under the heading ‘Trans-
apartheid, without threatening its attractiveness to do- formation of the Industry’, which stated that within six
mestic and international investors. months of the Bill taking effect as an Act, the Minister
of Minerals and Energy must have developed a char-
The Act follows international trends in minerals regu- ter that sets the framework, targets and timetable for
lation, especially those seen in Canada, Australia and effecting the entry of historically disadvantaged South
North America, and centres around the provision that Africans into the mining industry. The charter estab-
all mineral rights will revert to the State, representing a lishes how to achieve equitable access to South Afri-
move away from the previous system where ownership ca’s mineral and petroleum resources for all South Af-
of mineral resources lay in the hands of private com- ricans, and outlines how the creation of employment
panies. and the advancement of social and economic welfare
can take place through the appropriate use of these
The intention of this development is to ensure increased resources. The charter also sets a framework that en-
access to mining activity for historically disadvantaged sures that the holders of mining and production rights
people, and to enable the State to put an end to the contribute towards the socioeconomic development of
hoarding of mineral rights, with a use-it-or-lose-it prin- the areas in which they are operating.
ciple ensuring that if a company fails to use its mineral
rights it will lose those rights after a certain period. The charter has been the source of much specula-
tion and agitation among many in the industry, but is
This will affect mining companies holding unutilised re- considered necessary in order to correct the racial im-
serves, as well as those who own projects that have balance of the South African mining industry, which
been shut down due to unprofitability. In addition, the remains white controlled. There has been some con-
principle allows the State the discretion to force the fusion about how the mining charter will be affected
holder of mineral rights to abandon development proj- by the Broad-Based Black-Economic Empowerment
ects if it is of the opinion that the project is not produc- Codes of Good Practice, which outline what compa-
ing at its most efficient levels. nies need to do – in terms of ownership, management
control, employment equity, skills development, prefer-
The Act also answers the need for broader access to ential procurement, enterprise development and socio-
geological, geochemical and geophysical information, economic development – to fulfil government’s black
which, in the past, was held by the entity that conduct- economic-empowerment (BEE) policy requirements.
ed the exploration and was protected by restrictions Regarding this, a tentative agreement was reached in
on disclosure. Through this, and improved access to April 2005, between the Department of Trade and In-
mineral rights, the Act is designed to bring an end to dustry (DTI), the DME, and the Chamber of Mines, to
the situation in which a few large companies domi- the effect that the mining charter be left as is until the
nate South Africa’s mining industry, and is intended to rights conversion process is concluded, and the Minis-
stimulate the development of South Africa’s junior min- ter of Trade and Industry confirmed, in December 2006,
ing sector, which is currently small and compares un- that the codes of good practice will not affect the min-
favourably with junior mining sectors in other parts of ing transformation charter until at least 2009. Mean-
the world. while, mining companies have been requested by the
DTI to align their procurement and enterprise-develop-
Junior mining companies are also expected to benefit ment policies with the spirit of the codes of good prac-
from the proposal in the Act that requires evidence of tice.
the participation of historically disadvantaged people in
applications for prospecting and mining rights. The mining charter requires that 15% of the ownership
of existing mining industry assets must be held by his-
Government and industry have drafted a socioeco- torically disadvantaged South Africans within five years,
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8Platinum June 2008
Scorecard for the broad-based socioeconomic empowerment
charter for the South African mining industry
Description 5-year target 10-year target
Human resource development
1 Has the company offered every employee the opportunity to be functionally Yes No
literate and numerate by the year 2005 and are employees being trained?
Has the company implemented career paths for HDSA employees including skills Yes No
development plans?
2 Has the company developed systems through which empowerment groups can be
Yes No
mentored?
Employment equity
Has the company published its employment equity plan and reported on its annual
Yes No
progess in meeting that plan?
3 Has the company established a plan to achieve a target for HDSA participation in
management of 40% within five years and is implementing the plan?
Has the company identified a talent pool and is it fast tracking it? Yes No
4 Has the company established a plan to achieve a target for women participation in
mining of 10% within the five years and is implementing the plan?
Migrant labour
5 Has the company subscribed to government and industry agreements to ensure
Yes No
non-discrimination against foreign migrant labour?
Mine community and rural development
Has the company cooperated in the formulation of integrated development plans and
Yes No
is the company cooperating with government in the implementation of these plans for
communities where mining takes place and for major labour-sending areas? Has there
been effort on the side of the company to engage the local mine community and major
labour-sending area communities? (Companies will be required to cite a pattern of
consultation, indicate money expenditures and show a plan).
Housing and living conditions
6 For company-provided housing has the mine, in consultation with stakeholders,
Yes No
established measures for improving the standard of housing, including the upgrading
of the hostels, conversion of hostels to family units and promoted home ownership
options for mine employees? Companies will be required to indicate what they have
done to improve housing and show a plan to progress the issue over time and is
implementing the plan?
7 For company-provided nutrition has the mine established measures for improving
Yes No
the nutrition of mine employees? Companies will be required to indicate what they
have done to improve nutrition and show a plan to progress the issue over time and is
implementing the plan?
Procurement
Has the mining company given HDSAs preferred supplier status? Yes No
Has the mining company identified current level of procurement from HDSA Yes No
companies in terms of capital goods, consumables and services?
8 Has the mining company indicated a commitment to a progression of procurement Yes No
from HDSA companies over a 3–5 year time frame in terms of capital goods,
consumables and services and to what extent has the commitment been implemented?
Ownership and joint ventures
9 Has the mining company achieved HDSA participation in terms of ownership for equity 15% 26%
or attributable units of production of 15 per cent in HDSA hands within 5 years and 26
per cent in 10 years?
Beneficiation
Has the mining company identified its current level of beneficiation? Yes No
10 Has the mining company established its base-line level of beneficiation and indicated Yes No
the extent that this will have to be grown in order to qualify for an offset?
Reporting
Has the company reported on an annual basis its progress towards achieving its Yes No
commitments in its annual report?
www.researchchannel.co.za
9Platinum June 2008
and 26% within ten years. While the charter does not IThe mining rights for established operations will offer
provide clarity on the issue of new mining projects, a security of tenure for an initial 30 years, renewable for
meeting, held in July 2004, between the DME, labour additional 30-year periods. The Act provides for the
unions and mine resource owners, resolved this issue. provision of a retention permit, allowing the company
Agreement was reached that all new mining projects granted the mineral rights to retain the rights without
where the mineral rights were previously State-owned developing them for a period of three years, renewable
must have a 51% BEE shareholding within the one year for two years, if market conditions are poor. The new
transitional period, and a 26% BEE shareholding if the prospecting rights are valid for a period not exceeding
mineral rights were formerly privately held. For pending five years, with a possible one-off renewal for another
applications for prospecting rights the same criteria will period of a maximum of three years and, once pros-
apply. All applications for rights not falling into these pecting has been completed, the company must reap-
categories that are in the custodianship of the State will ply to convert these rights into mining rights if it wishes
be subject to a minimum 26% BEE participation. to establish operations.
The targets for the participation of historically disadvan- All new mining licences, including those for existing
taged individuals must be reached by individual compa- mineral rights properties, will require evidence of a BEE
nies, but companies can earn offset points whereby the plan, a social plan, and an environmental management
ownership target will be moderated should the compa- plan.
ny facilitate value-addition downstream opportunities.
This will be clarified in the future promotion of benefici- Under the MPRDA, a transitional period allows current
ation legislation. The charter also requires companies holders of mineral and mining rights to convert their
to procure from BEE companies, engage in skills uplift- old-order rights to new-order rights.
ment, improve worker housing conditions, and develop
social plans for retrenched workers. These obligations Mineral rights holders, which did not hold prospecting
cannot be used to offset equity obligations. permits or mining authorisations and which were not
actively prospecting or mining on their properties were
Further to requiring the involvement of historically dis- given a year from the date on which the Act came into
advantaged people, which will be facilitated through effect to apply for prospecting or mining rights under
the empowerment charter, the Act also requires that the new legislation. Mineral rights holders, which did
companies consult with government should they wish not apply within this period lost their rights, and any
to beneficiate locally produced minerals outside the other persons or groups will be able to apply directly to
country. This provision is designed to promote the use the State for prospecting or mining rights for the areas
of mineral resources for sustainable economic devel- formerly covered by those rights.
opment, and to avoid the trap that many developing
countries fall into of exporting jobs through the expor- Mineral rights holders, which were actively prospect-
tation of unbeneficiated minerals. ing or mining on the properties to which their old-order
rights related (with the necessary permits or authorisa-
Based on this, the granting of mineral rights will be in- tions from the DME) were given two and five years re-
fluenced by the involvement of historically disadvan- spectively, from the date on which the MPRDA came
taged people, and by plans to beneficiate the miner- into effect, to convert their old-order rights to new-or-
als locally. der prospecting or mining rights.
To give effect to the charter, a scorecard has been re- An application has to be lodged at the relevant DME re-
leased by which companies will be evaluated to deter- gional office, depending on where the land is situated.
mine whether they have complied with the provisions Within 14 days of lodging an application for the con-
contained in the charter and the Act, and thus to de- version of prospecting or mining rights with the DME, a
termine whether their old-order mining rights should be decision as to whether or not this application has been
converted to new-order rights. The entire scorecard accepted will be made by the department. If an appli
will be taken into account in the adjudication by the cation is rejected, the process ends there. In the case
Minister of Minerals and Energy. When considering ap- of prospecting rights, if the application is accepted, the
plications received on the same date, the Minister will mining company is given 30 days to consult with in-
give preference to applications from historically disad- terested and affected parties, and to give the results
vantaged people. of this consultation to the DME. In respect of a mining
right, the mining company is given 180 days to consult
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10Platinum June 2008
with interested and affected parties. Then, depending the Act to put in place the necessary supporting infra-
on whether it is an application for a mining title conver- structure to implement it. A Minerals and Mining De-
sion or prospecting right, the mining company is given velopment Board, consisting of no fewer than 14 and
either 180 days or 60 days respectively to devise an no more than 18 members, was established in 2005 to
environmental management plan. Once this has been advise the Minister on the sustainable development of
submitted to the DME, the department has 120 days to the country’s mineral resources, as well as on the trans-
assess the application. The applicant is informed with- formation and downscaling of the industry. The board
in 30 days for prospecting rights, and 180 days for min- also plays a role in dispute resolution, and in partner-
ing rights, as to whether the application is granted or ship with the Mining Qualifications Authority, promotes
rejected. If granted, the applicant is called to come and the development of human resources.
execute the right, which takes place prior to the reg-
istration of the relevant right. The applicant must then To facilitate the passage of the new regulatory environ-
lodge the right granted and executed for registration ment, the Act provides for transitional arrangements
within 30 days of the execution date. This closes the li- that will be used to phase in the new framework. These
censing process. will ensure that security of tenure is protected, and will
give the holders of old-order rights and OP26 rights the
Mining companies are discontented over the time taken opportunity to comply with the Act.
to be awarded new-order rights, and the lengthy appli-
cation process has been identified by some as causing In spite of the transitional mechanisms, however, un-
widespread uncertainty among mining and exploration certainties remain regarding the practical implementa-
companies operating in South Africa. Towards tack- tion of the Act, and business has expressed concerns
ling such concerns, the Director-General of the DME over this.
indicated in September 2006 that mineral rights would
be granted to mineral explorers within six months from In late-2006, the DME launched a review of the MPR-
the date of application lodgement, while mining-rights DA and, based on submissions made by the mining in-
applications would take 12 months to finalise. In May dustry, is developing certain amendments to the legis-
2007, the Minister of Minerals and Energy, in her bud- lation, although it has stressed that such amendments
get vote in Parliament, reported that the DME had re- will not alter the spirit of the law, but will rather seek
ceived 11 447 applications for prospecting and min- to remove identified obstacles to mining investment.
ing rights since the new legislation was introduced, and One such amendment will see mining companies hav-
that there was no longer a backlog in the processing ing a period of 180 days after April 30, 2009, in which
of these. However, figures continue to show that de- to lodge claims with the DME before mining rights are
cisions on whether to grant or refuse a number of ac- expropriated.
cepted applications remain outstanding. Other concerns that have been voiced by business with
regard to the MPRDA include what they have identi-
Legislation, separate from the MPRDA, aimed at over- fied as broad discretionary powers granted to the Min-
hauling the registration of mining titles and setting up ister, and the absence of clearly defined recourse to the
a central office to regulate all mining and prospecting courts in the event of having to challenge a ministerial
rights has been passed. Known as the Mining Titles decision made by virtue of these powers.
Registration Amendment Act, this law seeks to bring
registration in line with the MPRDA, and aims to estab- Government, however, holds that, in comparison to the
lish a central point for the registration and recording of Minerals Act of 1991, the Act limits the extent of dis-
all mining titles. cretionary power by containing objective statutory re-
quirements that will be used to determine whether a
The MPRDA represents a significant move away from company is granted prospecting or mining rights. Gov-
the old regulatory regime, and the DME is required by ernment also emphasises that, as a fundamental right
Progress on rights applications made between May 2004 and November 2007
Received Accepted Rejected Granted Refused Withdrawn
Prospecting rights 7 703 6 019 1 539 2 835 2 067 281
Mining rights 1 807 1 596 182 336 309 105
Permit applications 3 990 3 339 559 1 374 822 207
Source: Compiled from the DME’s monthly update on applications (November 2007)
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11Platinum June 2008
contained in the South African Constitution, recourse Holdings Limited, Marlin Corporation Limited, and Red
to the courts is implied, and is not excluded under the Graniti SA (Pty) Limited. These investors have lodged a
new Act. request for compulsory international arbitration against
the South African government under the World Bank’s
Concerns have also been raised over what is perceived International Centre for the Settlement for Investment
as overregulation of the industry, demonstrated in the Disputes (ICSID) in Washington. The ICSID granted the
Act’s requirement that companies consult with govern- request in January 2007.
ment should they wish to beneficiate locally produced
minerals outside the country. Government feels justi- The request for international arbitration was made un-
fied in this, however, as it provides incentives for the lo- der South Africa’s bilateral investment treaties (Bits)
cal beneficiation of minerals. with Italy and the Belgo-Luxembourg Economic Union.
The request points out that by extinguishing the owner-
Further, business is concerned that, through the use- ship of the investors’ South African mineral rights with-
it-or-lose-it principle, mineral resources previously held out providing prompt, adequate and effective compen-
by companies that were likely to exploit them over a sation, the entry into force of the MPRDA constituted
long period, may now be developed in the next few an unlawful expropriation of their investments. Like-
years, increasing supply to the market and disrupting wise, the Mining Charter’s forced divestiture of 26%
the delicate supply-and-demand balance, thereby ex- of the investors’ investments to historically disadvan-
erting downward pressure on metals prices. taged South Africans, as a condition of the conversion
of the investors’ old-order rights to new-order rights
The Mineral and Petroleum Resources Development under the MPRDA, constitutes a violation of the Bits’
Amendment Bill of 2007 has been criticised for wors- requirement that the investors receive fair and equita-
ening regulatory uncertainty in South Africa’s mining in- ble treatment. In the investors’ view, the Mining Char-
dustry, with some experts indicating that the Bill fails to ter discriminates against foreign investors in favour of
introduce any measurable objectives into the MPRDA’s historically disadvantaged South Africans, and thus vi-
licensing requirements and contains certain legislative olates the Bits’ equitable treatment requirements.
proposals that will aggravate the MPRDA’s underlying
problems. The environmental policies of the MPRDA are expected
to ensure responsible mining practices, to some extent,
An example of this is the empowerment of the Minister although the enforcement of these policies will be the
of Minerals and Energy to refuse to convert an old order ultimate determinant of their effectiveness.
mining right, as an applicant must now provide docu-
mentary proof as to how it intends giving effect to the Everyone applying for a prospecting or mining right
MPRDA’s empowerment, social and labour objectives. must lodge an environmental management programme
report (EMPR) evaluating the impact of the proposed
As at August 31, 2007, 94 judicial review applications operations on the environment and on the socioeco-
had been instituted against the DME’s refusal to grant nomic conditions of affected people. For this EMPR to
either a prospecting or mining right, and, as of the same be approved, applicants must make the prescribed fi-
date, the High Court had only refused to grant one judi- nancial provisions for the management of environmen-
cial review application. tal impacts, and for rehabilitation.
In a legal challenge to the MPRDA, the consequenc- The Act empowers the Minister to force a permit hold-
es of which remain unclear, mining lawyer and vice- er to take urgent remedial action to deal with an envi-
chairperson of the International Bar Association Peter ronmental hazard, and the Minister is even authorised
Leon, contended in February 2007 that the MPRDA is to use State funds to pay for this, although the money
in breach of 42 international investment treaties signed must be recovered from the permit holder.
by South Africa since 1994. Such treaties are intended
to protect foreign investments from expropriation, ex- Although certain other environmental provisions are
cept in the case of prompt and effective compensation, made in the Act, it does not represent a definitive piece
and require foreign investments in South Africa to be of environmental legislation, and the interrelationship
subjected to fair and equitable treatment. between the Act and other environmental laws remains
important.
Based on this, under international law, a €266-million
claim has been brought by the Italian investors in Marlin Firstly, environmental rights are included in the Con-
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12Platinum June 2008
stitution, which requires that environmental consid- formula is gross sales minus the cost of transporting
erations are accorded appropriate recognition in the the final product to the buyer.
South African economy.
The amendments also alter the tax base of the royalty
To substantiate these environmental rights, the Nation- to earnings before interest and tax (Ebit) and not the
al Environmental Management Act explicitly outlines previous earnings before interest, tax, depreciation and
principles for cooperative environmental governance, amortisation (Ebitda), which has a much higher value.
and mining companies find themselves subject to this The mining industry had objected to the use of Ebitda
piece of legislation. claiming that it took no account of considerable capi-
tal investment, particularly by deep-level gold mines.
One of the most significant environmental challenges Under Ebit, the mines will be allowed 100% capital ex-
faced by the mining industry relates to water and, in or- pensing, as is the case for income tax.
der to define responsibility in this area, companies fall
under the National Water Act. In terms of the final draft of the bill, marginal mines
would get automatic relief as their royalty rate will de-
As a result of this, it has been noted that environmental cline as their profitability falls. However, the government
law in South Africa appears fragmented and, on occa- will also enjoy the benefit of commodity price booms.
sion, contradictory, with the result that uncertainty ex-
ists as to what is required of mining companies with re- The Treasury has taken steps to protect the integrity of
gard to environmental protection. the Bill in the light of the move to the lower value Ebit,
by introducing a minimum rate of 0,5% into the formu-
South Africa’s mining sector will soon fall under a royal- las.
ty regime. The Mineral and Petroleum Royalty Bill was
released in early 2003, and since that time has been re- Refined formula rates will typically range from 1,7% to
vised, taking into account consultations with the sec- 2,5%, depending on the profitability of the mines, and
tor. there will be a maximum rate of 5% in cases of high
profitability. Unrefined formula rates will range from
The first two drafts of the Bill proposed that royalties 2,2% to 3,3%, with a maximum of 7%.
be levied on turnover, and set specific royalty levels for In June 2007, the Diamond Export Levy Bills were ta-
specific minerals. Miners strongly rejected this system, bled in Parliament, providing for a levy on the export
claiming that it would reduce the viability of existing op- of rough diamonds from South Africa. While the impo-
erations, increase pay limits and, consequently, cause sition of an export tax is already contained in the Dia-
job losses. Further, the industry claimed that the legis- monds Act of 1986, amendments to the Diamonds Act
lation could substantially increase hurdle rates for new in 2005 have resulted in the need for amendments to
and organic growth projects and, ultimately, threaten the export levy on rough diamonds.
the long-term viability of the industry.
The export levy on rough diamonds in the Diamonds
The third version of the Bill, tabled in December 2007, Act of 1986 is currently set at 15%. However, this Act
proposed a levy based on profitable earnings. The provided for relatively generous exemptions. The pro-
approach incorporated the use of a single formula in posed Diamond Levy Bills of 2007 reduce the export
terms of which the royalty rate for each company would levy on rough diamonds to 5% but tighten the relief
vary depending on the ratio of earnings to sales. provisions, thereby laying a foundation for increased
effectiveness. It should also be noted that the reduced
Final amendments to the Bill were released in May 5% rate was not intended to undermine the power of
2008, and the royalties will become payable on miner- the levy as a deterrent. According to informal police es-
als transferred as of May 1, 2009. timates, diamond smuggling costs are between 2,5%
and 5% of gross diamond values. Therefore, the cur-
The Cabinet-approved amendments introduce a dis- rent 15% rate merely enhances smuggling; whereas,
tinction between the royalties imposed on refined min- the proposed 5% rate is high enough to deter unpol-
erals, such as gold, and unrefined minerals, including ished exports without hidden benefits for smuggling.
diamonds, gas and oil, which will have separate formu-
las. Platinum group metals could fall into either catego- The proposed relief measures ensure that the local
ry depending on whether they had been refined before supply of rough diamonds is commensurate with lo-
they are sold. For refined metals the tax base for the cal demand. The core element of these incentives is to
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13Platinum June 2008
encourage producers to supply the local market with order to reduce the exporting of unprocessed mineral
rough diamonds so that they can export the remainder products and to promote local value-addition. The pro-
free from the levy. cess of drafting this bill has been slowed in order to al-
low for greater engagement with industry, which seems
Still to come is the Promotion of Beneficiation Bill, opposed to the idea, claiming that it is not reasonable
which is expected to provide incentives for upstream to expect those involved in primary extraction to get in-
companies that facilitate downstream investments, in volved in beneficiation.
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14Platinum June 2008
South African PGM production: Western Limb
WESIZWE
Rustenburg is the largest of Anglo The Impala lease area is Impala Wesizwe will start construction of
Platinum’s mines. Underground largest operation and produced a the Frishgewaagd Ledig mine in
operations produced 665,000 oz of record 1,086,000 oz of platinum in 2008. Merensky Reef and UG2 will
refined equivalent platinum from the second half of 2007 from a mix of be mined from underground via two
69% UG2 and 31% Merensky at a Merensky and UG2 ore. shafts. Steady state output could
4E average grade of 3.98g/t. reach 350,000 oz of 4E per year by
There are currently 14 active shafts 2016 with first production scheduled
Various replacement projects and a and plans are in place to maintain for 2011.
UG2 expansion project could help production between 1.1 and
output grow to an annual 900,000 oz 1.2 million oz.
of platinum over a number of years.
FY 2007 output was 440,000 oz of
pgm and this should grow to 500,000
oz, with over 90% of the UG2 ore
coming from underground mining.
Lonmin’s Marikana operations
produce the majority of its pgm
(752,000 oz of platinum in
concentrate in 2007) from
underground UG2 and Merensky ore.
Development of three new shafts
should allow enough extra production
over the next five years to more than
offset the decline in output from
current operations.
ELANDSFONTEIN
Pandora is a joint venture between
Lonmin, Anglo Platinum (42.5% Xstrata acquired 74% of the
each) and Mvela Resources and the Elandsfontein mine in 2007. This
Bapo-Ba-Mogale tribe (7.5% each). started operation the same year with
the first mining in January and the
Development is being phased and first concentrate produced at the end
current mining is from the Marikana of the year.
lease area. 2007 output was 52,000
oz of platinum or 98,000 oz of pgm The mine will initially recover solely
(bought by Lonmin). Output could open pit UG2 ore and output should
eventually expand to an annual rise to an annual 176,000 oz of
440,000 oz of pgm. platinum.
Source: Johnson Matthey Platinum 2008
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15Platinum June 2008
South African PGM production: Eastern Limb
Twickenham (100% owned by Anglo
Platinum) started operations in 2005
and produced 9,300 oz of equivalent
refined platinum last year as well as
a similar amount of palladium.
The recommencement of development
has been approved this year which
would allow expansion of current
operations and mining of UG2 ore.
-
-
The Sheba’s Ridge project is 65%
owned by Ridge Mining and 35% by
Anglo Platinum. The IDC will take a
26% stake for funding the feasibility
study. When developed, it will feature
an open pit, mining nickel-rich ore.
In pgm terms, this deposit is very
palladium-rich. Annual output could
rise as high as 395,000 oz of pgms,
of which 274,000 oz would be
palladium.
Everest is owned by Aquarius. It
consists of an open cast pit and one
decline, both mining UG2 with an
average 4E grade of 2.89g/t. The
Anglo Platinum will sell its share of mine had its first full year in 2006
Booysendal to Mvela Resources in and produced 99,000 oz of platinum.
2008. This will subsequently be sold Concentrate is sold to Impala.
to Northam. 4E resources are
estimated at 103 million ounces. The open pit will close in 2008 but
Production could start in 2011 with more underground ore will be mined.
the possibility of output reaching Steady state production of 225,000 oz
300,000 oz within three years. of pgm is forecast in the near term.
Source: Johnson Matthey Platinum 2008
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16Platinum June 2008
Platinum projects currently under development
Major platinum projects currently under development in South Africa
Owner Project name Location Projected Value Duration Status
annual output
African Rainbow Two Rivers Mpumalanga 120 000 oz/y R1,3-billion The mine was expected Not stated
Minerals (55%) / Platinum (platinum) to reach full production
Impala Platinum in the first quarter of
(45%) 2008.
Anglo Platinum Western North West Not stated $286-million First production is PTM has reported that the
(37%) / Africa Bushveld joint Province expected in 2010 WBJV Project 1 feasibility
Wide (26%) / venture study, mine design, and
PTM (37%) engineering are advancing
in accordance with the
prefeasibility study. The
permitting and the licensing
of the project are behind
the prefeasibility study
schedule and are expected
in 2008.
Anglo Platinum Rustenburg UG2 North West 227 000 oz/y R2,4-billion The revised phase 2 The project is on schedule
phase 2 project Province (platinum) project is expected
to reach steady-state
production in 2008.
Anglo Platinum Waterval Phase North West 52 000 oz/y Not stated Steady state Not stated
3 project Province (platinum) production is expected
in 2009
Anglo Platinum Townlands ore North West 70 000 oz/y Not stated Steady state production The project is in its
replacement Province (platinum) is anticipated in 2014 execution phase and
project progressing towards
steady state production
Anglo Platinum Paardekraal No North West 120 000 oz/y R2,3-billion Steady state production Construction of the
2 Shaft project Province (platinum) is anticipated in 2015 man and materials shaft
commenced in September
2007 and is on schedule.
Anglo Platinum Amandelbult Limpopo 106 000 oz/y R1,5-billion Steady state production The project has
East Upper UG2 Province (platinum) is anticipated in 2012 commenced and is on
project schedule
Anglo Platinum Potgietersrust Limpopo 230 000 oz/y R5,8-billion Not stated Progression of the project
Platinum Province (platinum) is dependent on the
(PPRust) North successful relocation of
Expansion people from the expansion
project area. Anglo Platinum is
facing opposition to its
relocation project by as
many as 55 families, which
are refusing to relocate.
Anglo Platinum Brakfontein Limpopo 120 000 t/m R1,1-billion The project began The Brakfonetin Merensky
Merensky Province (ore) in July 2004 and is project is well advanced,
Project scheduled to reach with first production
steady state production expected in the middle of
in 2009. 2008.
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