Alphamin’s reluctant Chief Executive Officer
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Alphamin’s reluctant Chief Executive Officer

Boris Kamstra’s aversion to disappointing people almost resulted in him turning down a job that he now clearly adores.

Named by a Dutch father with a particular penchant for Slavic names, the Alphamin CEO is, however, today evidently at home,

in the position that requires skills as varied as wooing potential investors in a Toronto boardroom to navigating the rutted 38km-long dirt road to Alphamin’s Bisie tin mine in the Democratic Republic of Congo.

Saying he initially fought “tooth and nail” against being placed in the position that would involve managing the development of the Bisie mine,

Kamstra was concerned that his engineering background had not equipped him to deal with the public relations (PR) demands required of the CEO of a Toronto-listed group.

“I’m an engineer, and an engineer’s userface is written in MS-DOS. We’re not great in terms of PR.

And yet, within me there was this turmoil because I believed in this project right from the outset – as soon as we’d started to get some traction during the due diligence process.

“I realised this was going to be a challenge and I really wanted to be a part of it. More so than sitting in an advisory position.

They eventually said to me, ‘Right, you’re it,’ and I’m absolutely thrilled they did,” he told finweek during an October media visit to the Bisie project.

Kamstra’s involvement with Alphamin began in 2012 when, as an investment executive for Rob Still’s Pangea Exploration, he undertook a due diligence on Alphamin and its proposed tin mine in North Kivu.

After assessing the venture, Pangea made an investment in the company a year later, kicking off Kamstra’s immersion in Bisie.

Initial trepidation

But Kamstra admits to some early-stage reservations. Bisie is, after all, a prospective tin mine located in the heart of the Congolese jungle historically controlled by violent militia groups.

It is also 180km away from the closest city – Goma – and, at the start of development, lacked any real infrastructure.

At the start of development, the hillside upon which Alphamin planned to develop the first phase of its mine was also home to around 4 000 artisanal miners who had yet to be convinced of the merits of formalising the extraction of tin and showed little interest in surrendering their hard-earned exploration shafts.

Even today, the national road between Goma and the start of Alphamin’s dirt track to the mine resembles little more than a potholed farm road.

“Before I came here, I did what everyone did – typed in Bisie and what came spewing out of my computer wasn’t exactly friendly. I was a little concerned, but I came out here to establish if we could put in a road to the mine.

“Among the local community it was a warm welcome, but in the broader community there were elements that were naturally very against us coming in, and that was less welcoming. It took us a while to get our street cred up, but the locals around us have always been receptive,” he says.

Since then, Alphamin has made impressive progress on site. According to a 14 November press release, the box cut for the underground portal of the mine has been completed and the decline has already progressed 50m into hard rock.

First production of tin is expected in early 2019, with steady state production of 10 000 tonnes a year of tin to be reached by the end of that year.

Making the grade

When Kamstra talks of the investment appeal of the project, he frequently returns to emphasise its tin grade. With an average grade of 4.49% and a 4.6m tonne resource, his excitement over the potential of the mine comes into clearer view.

“In mining, you always need margin for error. You need to have sufficient capacity to deal with unexpected things. And the only way a mine can really do that is through grade.

Here, if we bring a tonne of rock to the surface, it’s worth four-and-a-half times more than what the next best tin project in the world is worth,” he tells finweek.

It is this rich deposit that drew informal miners to the hill and created an industry in which the political ambitions of Congolese rebel leaders were financed through the trade in tin, and it was only after the 2010 introduction of the Dodd-Frank Act that local tin traders found an unwilling international market for their metal.

Since the publication of Dodd-Frank, companies that use metal in their products are required to publish due diligence on the origin of metals used from the DRC and surrounds.

The introduction of the legislation also had an impact on the number of informal miners at Bisie, with around 380 currently remaining on site. The Bisie operation currently employs around 800 unskilled workers, at least 25% of which are former artisanal miners.

Alphamin, in conjunction with the local mines ministry, has agreed to open up other sites on the larger Bisie tenement for the remaining miners, providing them water and road access.

Some have also been incorporated into formal mining operations or have left to search for alluvial gold and diamonds in the nearby rivers.

North Kivu minister of mines Professor Anselme Paluku Kitakya believes that the manner in which Alphamin has worked with the artisanal miners has set a precedent for relations between mining companies and communities in the DRC going forward.

“Alphamin represents the emergence of a real mining sector in North Kivu. It represents a resurrection of an industry that failed before owing to management problems.

“We see the project will generate employment and tax revenue and Alphamin’s potential for success goes against the perception that the DRC isn’t a good place to invest,” he told journalists during the media visit to the country.

Market outlook

Kamstra also expresses confidence in the global tin market, saying that recent EU legislation requiring lead solder to be phased out of consumer products has opened up demand for tin as a replacement.

Alphamin’s estimates are based on a long-term real tin price of $21 400/t, which Kamstra says is far below the International Tin Research Institute’s (ITRI’s) predicted long-term equilibrium price of $25 000/t.

The ITRI also forecast in a recent press release that there would be a global tin shortfall of 60 000 tonnes until 2018. Says Kamstra: “The industry would thus be experiencing extreme stress before we would be placed under duress.”

Despite the project’s location, Alphamin has already raised $140m for the mine, most recently through an $80m credit agreement in early November.

It also plans to list on AltX by the end of the year through a secondary inward listing to raise the final $31.4m required to complete construction. With $10m of this already committed in principle, Kamstra is confident that the company will receive the balance of required capital.

“The first thing that people battle to get their head around is that North Kivu is no longer the centre of bedlam and chaos that it once was.

It rightfully earned that label, but that label is dated and there are a large number of people here who really want to see this mine prosper,” he says.

ABOUT BORIS KAMSTRA:

Currently reading: The Silk Roads: A New History of the World by Peter Frankopan.

Favourite meal: A nice steak and a glass of red wine.

Sports/hobbies: Mountain biking, surfing, and offroad motorcycling. Kamstra indicated his intention to ride his motorbike from Bompas Road in Johannesburg to the Bisie mine.

Favourite holiday spot: Port Alfred

*The writer travelled to the Bisie mine in the DRC as a guest of Alphamin.

This article originally appeared in the 30 November edition of finweek. Buy and download the magazine here.

 

Publication:  fin24

Written by: Natalie Greve