MARNA Cloete is accustomed to the doubters. When Ivanhoe Mines, of which she is president (“CEO in South African terms,” she explains), was first searching for copper in the Democratic Republic of Congo (DRC) in the 2000s, no lender would come near the company. “Everybody was risk off,” Cloete says in an interview.
Today Ivanhoe’s Kamoa-Kakula mine, in the DRC’S copper-rich Kolwezi district, is the world’s third-largest producer of the metal, thanks in part to China’s Zijin Mining Group, which has a 39.4% stake.
China’s willingness to take a risk has been at the expense of the West, the US in particular, which now trails in the search for battery metals. Investors have also benefited. Shares in Ivanhoe Mines, listed in Toronto, are 75% higher this year, and more than 400% higher over the past five.
Ivanhoe also reopened the 800,000 tons a year Kipushi zinc/copper mine, on the DRC’s border with Zambia. The mine had been in mothballs for about 30 years but the market now needs the production.
This year, however, comes what many think is Ivanhoe’s biggest test. It will raise the curtain on Platreef, a 100,000 ounces a year platinum group metals (PGMs) mine near Mokopane. It comes soon after a big sell-off in PGMs.
So steep was this year’s price correction that industry CEOs questioned whether South Africa would ever produce as much metal again. Northam Platinum CEO Paul Dunne doubted any new mines would come on stream, including Platreef’s second phase.
Cloete, who has agreed to supply Northam with concentrate from Platreef, says the second phase is already happening. A third shaft will increase production to between 400,000 oz and 500,000 oz a year, making Platreef one of South Africa’s largest PGM mines. It will also be among the most competitive as older mines struggle with costs.
I don’t necessarily see ourselves as a takeover target. We have a very supportive shareholder base and I’m not convinced our shareholders will let go easily – Marna Cloete
“There will be a natural drop-off, which will also free up refining capacity,” she says. Platreef is in talks with Sibanye-Stillwater to supply concentrate to its smelting and refining facilities, extending an arrangement for some of Platreef’s first-phase production. “Platreef also produces copper. About 30% of its production mix is base metals,” she says.
Before mining, Friedland was an important influence in the life of Steve Jobs. The two met at Reed College while Friedland was on parole from federal prison, having been caught with 24,000 hits of LSD worth $125,000. The two bonded over Eastern mysticism at Friedland’s millionaire uncle’s apple orchard that inspired Jobs to later fame.
Asked what it’s like working with an ego like that, Cloete replies: “He’s the visionary, I’m the implementer. It turns out I’m like a politician and team builder.”
This frees up Friedland to press on, despite his 74 years. He is planning to list the Nimba iron ore mine in Guinea — Ivanhoe Atlantic — on the Australian Securities Exchange. Ivanhoe Electric, listed in New York, develops projects in copper, silver and gold in North America.
Takeover target?
Friedland’s empire is centred on Ivanhoe Capital at the top. It has been involved in more than $25bn in dealmaking, which naturally raises questions about Ivanhoe Mines’s next move.
Speaking at the FT mining summit in October, Cloete said there had been “constant knocks on the door” since Kamoa-Kakula opened. “All the majors are very interested in what we are doing.”
She added, however: “I don’t necessarily see ourselves as a takeover target. We have a very supportive shareholder base and I’m not convinced our shareholders will let go easily.”
The “sizzle on Ivanhoe Mines’s steak” is Western Forelands, a mineral deposit near Kamoa-Kakula. A feasibility study is also expected next year. “We get the feeling we will replicate what we did at Kamoa-Kakula in the near future,” says Cloete. This time, however, the project is likely to be financed with debt rather than equity, with Ivanhoe keeping a 60%-100% stake in the system’s various ore bodies.
Cloete’s background is in accountancy with a master’s degree in tax law. After a stint at auditing firm PwC, she landed up at Ivanhoe in 2006, then called Ivanhoe Nickel & Copper. Ten people worked there and a guy she thought was in to fix the water cooler turned out to be Robert Friedland, Ivanhoe’s extraordinary founder. “He was wearing a tracksuit … Well, that’s what billionaires tend to wear, don’t they?” says Cloete.
Even in a big-hat industry like mining, Friedland is significant. An arch-promoter of projects, he was chair of Diamond Fields when it was bought out by Inco for $4.3bn. His Oyu Tolgoi, a gigantic copper/gold deposit in Mongolia’s South Gobi, was mocked until it was bought and renamed Turquoise Hill Resources (leaving Friedland to retain the Ivanhoe Mines name).
A version of this article first appeared in the Financial Mail.