Marula Mining has confirmed that its Blesberg lithium and tantalum mine in South Africa will transition to contract mining beginning in February 2025. This move follows a successful competitive tender process that took place over the past three months.
The selected contractor is expected to mobilize to Blesberg in the first quarter of 2025 and initiate large-scale conventional open-pit mining operations, alongside the reprocessing of existing stockpiles.
This will begin in February, subject to the completion of the mining contract, which is anticipated by the end of December.
In addition to this, Marula is finalizing leasing agreements with South African finance company Eqstra Corporation.
These agreements, valued at £1.33 million, will cover the majority of mine support vehicles and processing equipment that were previously leased to Blesberg by Q Global Commodities (QGC).
The final restructuring agreement and supporting documentation are expected to be completed by the end of December.
Marula’s shift to contract mining and the restructuring of equipment leasing agreements signals its commitment to scaling up operations at Blesberg and expanding the nearby Northern Cape lithium and tantalum project in 2025.
The company aims to produce high-value intermediate lithium products, as well as other critical and battery minerals such as tantalum, niobium, tungsten, and by-products like feldspar and mica.
The contractor will be responsible for conventional open-pit mining of lithium- and tantalum-bearing pegmatites, based on the mining plan and open-pit design submitted to South Africa’s Department of Mineral Resources and Energy (DMRE) in the second quarter of this year. This plan was also key to securing the Blesberg mining permit.
The mining contractor will also handle the extraction of residual mining waste stockpiles, which contain high-grade spodumene ores identified through Marula’s drilling and sampling activities.
The mining contract will be based on a standard schedule of rates, with the contractor providing all necessary mobile mining equipment to meet the planned run-of-mine production targets outlined in the approved Blesberg mine plan.
Marula’s mining plan, which was submitted to the DMRE, remains unchanged, and it forms part of the company’s mining right application currently under review.
As the mining contractor mobilizes its own equipment, Marula is restructuring QGC’s existing leasing agreement, which covers mobile mining vehicles and processing equipment on site.
This restructuring will see Marula’s South African subsidiaries, Southern African Lithium and Tantalum Mining (SALT) and Muchai Mining South Africa (MMSA), assume the leasing agreements for the necessary equipment.
This includes seven mine support vehicles and two major pieces of mineral processing equipment, currently valued at R30.8 million.
The equipment will be financed over a four-year lease term provided by Eqstra. As the new mining contractor brings its equipment to the site, the need for some of the existing mobile mining equipment will be reduced, and this will not be included in the restructuring agreement.
Marula’s board sees the successful restructuring and equipment leasing arrangements as a clear indicator of SALT’s strengthened balance sheet and its commitment to the Blesberg project.
This shift aligns with Marula’s long-term strategy, which includes the planned commissioning of a lithium acid leaching plant to produce intermediate lithium products for use in lithium batteries and other high-value lithium products.
CEO Jason Brewer emphasized the company’s adaptability in response to the changing dynamics of the lithium market in 2024.
He highlighted the ongoing discussions with a Chinese battery manufacturer and an existing lithium offtake partner to pivot towards high-value lithium product production in 2025.
Marula’s move to contract mining, coupled with its equipment financing agreements, is seen as a crucial step in achieving the targeted mine production rates and supplying the necessary raw materials for the company’s higher-value processing facilities.
Brewer expressed confidence that these developments position Marula for continued growth and success in 2025, particularly with the contributions of COO Martin Westerman and GM South Africa Henk van Zyl.
