Tharisa signs open-book underground contract with Cementation Africa

Tharisa has concluded a five-year underground mining contract with Cementation Africa structured on an open-book, cost-plus basis, giving Tharisa visibility over the contractor's actual operating costs rather than relying on a fixed rate per tonne or metre developed. The contract covers Tharisa's underground mining transition at its namesake mine in North West province, a project expected to draw around $500m of combined capital and operating expenditure over the coming decade.

Learning from other contractors' disputes

Tharisa's choice of an open-book structure was explicitly framed as an alternative to the traditional rates-based contracts that have periodically produced disputes elsewhere in African mining, including a roughly $700m arbitration dispute between Gold Fields and a contractor over its Ghanaian operations. Under a conventional contract, cost increases are typically passed straight through to the client with limited transparency into whether they are justified; an open-book model requires the contractor to share detailed cost data, in principle aligning incentives between client and contractor more closely.

A vote of confidence in the underground plan

Tharisa chief executive Phoevos Pouroulis said the agreement "represents an important step in unlocking the full potential of our resource base," while Cementation Africa managing director Japie Du Plessis said his company "values the trust that Tharisa placed in our capabilities to safely deliver its underground mining operation." The deal followed Tharisa's transition into underground mining at the site during the March 2026 quarter, part of a broader plan to extend the life of the operation well beyond the point at which its open pits are due to be exhausted.

For a mid-tier producer like Tharisa, locking in a five-year underground mining partner on transparent terms reduced one of the larger execution risks facing its transition plan: cost overruns on a technically demanding, multi-year underground development. Coupled with the group's simultaneous progress on financing the Karo Platinum project in Zimbabwe, the Cementation contract reflected a company trying to de-risk two major capital commitments at once, at a point in the PGM cycle when both cash flow and investor patience were unusually favourable. Industry observers said the choice of contracting model reflected a broader shift across African mining toward more transparent arrangements with underground contractors, following a string of costly disputes elsewhere on the continent over the preceding several years.

Sources

• Miningmx: Tharisa agrees 'open book' contract with Cementation Africa, 07 May 2026