Mine excursion
property, which will be used to produce a
maiden mineral resource estimate (MRE).
However, there are gaps and unanswered
questions, as very little exploration work
has been completed in the past,” says
Coetzee. It does seem, by looking at the
stopes and tunnels, that the old-timers,
much like the artisanal miners of today,
followed the seams more on instinct than
according to drilling results and mine
planning. The more recent and haphazard
artisanal tunnels intersperse the greater
historical workings everywhere — an
indication of the substantial value left in
the ground.
Did the bubble burst?
Although Desert Lion Energy plans
to mine the pegmatites from several
open pits at first, it is possible that the
company could decide to probe the
deeper-dipping seams by means of
underground methods in the future
— but that would depend entirely on
the price of lithium. And, as we have
seen since August, the lithium price
has bottomed out to levels that make it
unprofitable even to mine the stockpiles
on site, which Coetzee was doing at the
time of Mining Mirror’s visit.
The plan was to generate enough
material from the surface stock to
supply Chinese offtake partner and
lepidolite converter Jaingxi Jinhui
Lithium Company for a full year or
so, from which enough capital would
be generated to start mining from the
open pits. Desert Lion Energy delivered
its first shipment of 30 000 tonnes of
lithium concentrate to the Port of Walvis
Bay in April this year.
Yet, it seems as if all the hype about
lithium has caused its own downfall. A
proliferation of lithium mines in Australia
and an oversupply in China have
temporarily disrupted the market. Desert
Lion Energy had to suspend all mining
activities by the end of August (just after
Mining Mirror visited the project), soon
after the company was awarded a Phase 2
mining license by the Ministry of Mines
and Energy of Namibia, which meant it
could start mining in situ material. The
lithium market remains strong, though,
with growth of 12–14% year on year.
Desert Lion Energy’s mining license has
been granted for an initial 10-year period
and covers an area of 68.7km², which
includes the area where the Rubikon and
Helikon mines are located.
Although all activities have ceased, Tim
Johnson, CEO of Desert Lion Energy,
remains hopeful that the market will
turn and that the project will be back on
track soon. “We will continue developing
the asset and have started negotiations
to reprice the offtake agreement with
Jaingxi Jinhui. Pricing depends on the
product and on the form in which we
restart the operation,” he told Mining
Mirror during a telephonic interview
after news broke that mining at Desert
Lion Energy had been put on hold. The
company stated in a press release that it
is reassessing its strategy and has ceased
all operations at its hard-rock property in
Namibia.
The company’s strategy, before the
price slump, was to pursue a staged
approach to developing the asset,
to de-risk production and generate
near-term cash flow. It processed
stockpiled material to produce a coarse
lithium concentrate (1.7% to 2.0%
lithium oxide [Li2O]) and was in the
process of constructing a flotation plant
to produce a high-grade concentrate
of about 4% Li2O. These two steps
formed part of stage one, while the next
stage of production (Phase 2) would
Screening the waste stockpiles at one of the mining sites.
www.miningmirror.co.za
NOVEMBER 2018 MINING MIRROR
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