The Conversation (0)
An exclusive interview with Noventa Chairman of the Board, Eric Kohn.
By Desmond McMahon – Exclusive to Tantalum Investing News
Noventa’s Chairman of the Board, Eric Kohn, sat down with Tantalum Investing News to clear the air and show investors Noventa’s new management is steering the company towards a more successful future.
Under the previous management, investors grew weary of Noventa as it developed a reputation for failing to deliver. The company set high production targets, only to lower them after it became clear they could not be met.
But Noventa missed the new lower targets, too.
Behind those failures were a list of problems and setbacks at the Marropino mine. Since it opened in 2006, it had struggled to reach its targeted capacity, which lead to cash flow problems. With share prices down 95 percent since their initial offering in March 2007, the mine was placed on care and maintenance indefinitely in May 2009. The world-class tantalum deposit had failed to turn a profit in two-and-a-half years and Noventa was at the point where it needed a fresh start.
A new board took over the company and elected Eric Kohn to the position of chairman in July 2009. Kohn is an engineer by trade and his fingerprints are on several turn-arounds, most notably with Holmes Protection Group in the early 1990s. Now he believes Noventa is on the right track to becoming a major long-term producer of ethical tantalum concentrate, though there is still work to be done.
“Previous management clearly had problems. The way the plant had been built didn’t work, so we spent time trying to understand what went wrong,” explains Kohn.
The company started by moving its operational headquarters from South Africa to Mozambique and appointed a new management team. The move signified a shift in management style for Noventa. Kohn said the company now aims to employ local Mozambicans. If no one is available locally for a certain position, the candidate must speak Portuguese, the language of business in Mozambique.
Then, with a fresh perspective the management team set to work on a plan to correct structural problems at the site and start reclaiming shareholder value. “One of the biggest changes is that we now have electricity at the plant,” said Kohn. Before being placed on care and maintenance, the plant struggled to stay in operation 50 percent of the time. Kohn said delays in the construction of state-owned power lines forced the mine to rely on three diesel generators longer than anticipated.
The problem was intensified because the three generators weren’t interchangeable and plant designs failed to include an automatic switch over. So, if a generator failed the power couldn’t be switched quickly enough and then the slurry lines would jam up.
Kohn said plans are in place to refurbish the generators so the site has a reliable source of backup power, but finally having the plant connected to the electrical grid is good news.
The plant also suffered from the lack of an overall maintenance plan and, amazingly, no spare parts were kept at site – often forcing the plant to shut down for extended periods while waiting for a replacement to arrive. Management’s new conservative approach includes having spare parts on hand to avoid unnecessary production stoppages.
Even when the plant was up and running, it couldn’t process material larger than 1.1 mm, which left a football field of oversized material that accounted for half of the total amount Noventa had mined. With these types of inefficiencies one can see how Noventa repeatedly failed to meet production targets.
Noventa re-examined the metallurgy behind their tantalum liberation process and determined the best method of extraction was to switch from one to three conveyors with each one processing a different size of material. The current production is a test run for the new design. Noventa has already started processing tailings and the next phase is to move onto crushing and processing some of the oversized material.
“We won’t make much money,” said Kohn of the recent production, “but we will produce tantalum and get results that will tell us if we’re doing it right.”
Now, Kohn believes most of the major issues that plagued the mine have been resolved and the plant should be back in full production in early 2011.
If all goes according to plan, Noventa will shut the plant down in September 2010 and reconstruct it with the three different lines and additional methods for separating and recovering tantalum; then, slowly ramp up to full-scale production in January or February 2011.
According to Kohn, Noventa will begin shipping directly out of Mozambique instead of taking the more expensive overland route shipping across the continent of Africa to Walvis Bay on Africa’s west coast.
With a new attitude and a new approach Noventa seems to have turned the corner. If the structural problems at Marripino have finally been solved and the mine goes into full production, what was once considered one of the richest tantalum deposits in the world looks to finally turn a profit.