Showing posts with label Africa. Show all posts
Showing posts with label Africa. Show all posts

Monday, October 29, 2012

African Barrick lowers guidance after ‘challenging’ quarter

London-listed African Barrick Gold has again lowered its production guidance, citing illegal mining activities at North Mara and lower-than-planned production levels at Bulyanhulu and Buzwagi.
The Tanzania-focused mining company said on Friday its 2012 production would be between 5% and 10% below the bottom of its previous range of 675 000 oz to 725 000 oz of gold.

African Barrick Gold, a unit of Canada’s Barrick Gold, is forecasting a cash cost of $900/oz to $950/oz for the financial year.
Last year, the gold miner produced 688 278 oz, which was below its forecast of 700 000 oz to 760 000 oz. In 2010, delays and fuel theft at Buzwagi forced the company to lower its forecast twice.

CEO Greg Hawkins said that the September quarter had been a challenging three months for African Barrick.

“We were expecting to see a step-up in production levels leading into the end of the year and 2013, but there have been production interruptions and issues across each of our sites.

“The ramp-up in grade at North Mara is positive and expected to continue in fourth quarter, but we have been disrupted in our efforts to mine it at a normal rate given an increase in illegal mining operations,” he said.

African Barrick produced 147 786 oz for the third quarter, which was in line with the production from the first and second quarters of the year, but a 19% decrease compared with the corresponding quarter in 2011.

The miner also reported revenue of $265-million for the period, $89-million lower than the $354-million in the third quarter of 2011, owing to lower mining activity at its operations in Tanzania.

Although production increased at North Mara by 17%, this was more than offset by the impact of lower mined grades at Buzwagi stope and mobile equipment availability issues at Bulyanhulu, and batch milling at Tulawaka.

At Bulyanhulu, mining performance was impacted by reduced stope availability, lower availability of underground mobile equipment and paste filling delays, which resulted in lower ore tons hoisted.

Mill throughput was 9% lower than the third quarter, as a result of the lower mining activity in the quarter, leading to lower production. Buzwagi saw a marked improvement in equipment availability, which led to tons mined being 53% higher than in the third quarter of last year and a 22% improvement over the previous quarter.

Further, the planned focus on the waste-stripping programme has resulted in mining of lower-grade areas of the pit and, therefore, a decrease in the head grade delivered to the plant. “It is anticipated that this would enable higher grade zones to be accessed later this year and into 2013,” the company said in a statement.

Throughput levels were also lower than expected owing to unplanned mill maintenance. At Tulawaka, there was an increased focus on underground development work aimed at extending the mine life. As a result, there was a 30% decline in ore tons mined compared with last year’s comparative period.

“Together with the lack of surface stockpiles, this led to continued batch processing of the underground material blended with mineralised waste,” it added.

At a group level, gold sales were in line with production, and 20% lower than last year, owing to the decrease in production.
Meanwhile, Hawkins said African Barrick’s acquisition of an exploration package in Kenya represented an important first step in expanding the business more broadly in Africa.

The company bought ASX-listed Aviva Corporation’s Aviva Mining Kenyan gold and base metals assets in a deal valued at A$20-million.

Edited by: Mariaan Webb

Friday, August 17, 2012

China National Gold considers big push into Africa

China National Gold Corp is leading a drive offshore to help meet soaring demand for gold at home by considering a bid for the African unit of Barrick Gold, the world's No.1 producer.

If state-owned China National Gold makes a bid for all of African Barrick, it would rank as the biggest Chinese deal in Africa since China Guangdong Nuclear Power Corp's $3.37-billion takeover of uranium developer Kalahari Minerals and its partner, Extract Resources, in Namibia earlier this year.

A full bid for African Barrick could be worth £2.4-billion ($3.78-billion), if the London-listed gold miner were to fetch a 40% premium on its closing price on Thursday.

The gold deal would also be the biggest ever made by China National Gold and a takeover of African Barrick, Tanzania's largest gold producer, would increase its reserves by a third.

China National Gold calls itself the country's top gold company by production and resources with 1 565 t, or 50.3-million ounces, in gold reserves as of June. China Gold mined one-million ounces of gold in 2011, compared with 688 000 oz produced by African Barrick.

"In the second half and onwards, the group will focus on merger and acquisition of major projects as well as obtaining large resources and to make sure that key projects under construction will be completed and launch production," China National Gold said on August 8.

The move by China National Gold follows the Zijin Mining Group takeover of Australian gold producer Norton Gold Fields, which valued the company at A$215-million ($225.70-million) in a deal due to close next week. Zijin built up a 17% stake in Norton before launching its bid in May.

China, the world's top gold producing country, saw its gold demand in the first half of the year rise 2.8% on an annual basis to 400 t, or 12.8-million ounces, despite a 7% drop in second-quarter demand. The country is expected to become the world's top gold consumer on an annual basis this year with 850 tonnes of demand, the World Gold Council said.

The demand is being driven by China's increasing affluence, which leads to higher demand for jewellery and gold is being used as a hedge against inflation by Chinese investors.

Barrick said there was no certainty the talks would result in a bid for all or part of its 74% stake in the African unit, worth almost £1.3-billion at current prices.

Should China National Gold buy more than 30% of the voting interest in African Barrick, it would be required to make an offer for the whole company.

The Chinese company is looking to double mined gold output to two-million ounces a year by 2015, China National Gold's vice president, Song Quanli, told Reuters recently, adding that the company was also expanding into non-ferrous metals.

It expects to book revenue of 100-billion yuan ($15.7-billion) this year, which would be three years ahead of its target.

The offshore push is being handled through its Vancouver-based subsidiary, China Gold International Resources. China National Gold deferred all comment on the talks to its international division.

China National Gold Corp has promised to shift all its domestic gold resources to its Shanghai-listed subsidiary, Zhongjin Gold Corp, according to Zhongjin.

Edited by: Reuters

Sunday, August 5, 2012

Zimplats revenue slumps by 11%

Zimplats reported an 11% drop in the June quarter revenues from US$128,21 million to US$114,43 million in March. Performance was also 22% lower than the corresponding June quarter last year.

In a statement accompanying the company’s financial results, the group said its financial performance did not mirror a 13% increase in volume of metals sold due to depressed metal prices, with gross revenue per ounce of the group’s metals 21% lower than the previous quarter.

Mining production was 4% above the previous quarter. Head grade was, however, 2% lower than the prior quarter owing to poor ground conditions encountered in some sections of the mines, the company said.

Tonnage milled was 8% higher than the previous quarter due to improved plant availabilities in contrast to the previous quarter when plant running time was affected by major plant maintenance shutdowns.

Platinum Group Metals in matte production was 11% above the previous quarter in line with the higher milled tonnage, while the smelting of concentrates stockpiled in the previous quarter when the smelter was down for scheduled periodic maintenance.

Operating profit was down 52% in the period to US$24,884 million from the March’s US$51,855 million. The amount is also a 62% fall from the comparable June quarter in 2011.

Operating costs were 17% above the previous quarter in line with the higher sales volume.

In addition, the first tranche of US$3,3 million was paid to the Community Share Ownership Trust in terms of an undertaking to make US$10 million available to the trust over a three year period.

The group said royalties continued to be accounted for at higher rates set in terms of the Finance Act whilst the company awaits resolution of the dispute currently before the courts.

The company’s local spend (excluding payments to government and related institutions) was at US$65 million or 54% of total payments.

Zimplats’ US$23 million contribution to the fiscus, in direct and employee taxes, for the quarter was 25% lower than the previous one mainly due to lower royalties following the full payment of the disputed royalties in May 2012 as well as the weakening of metal prices.

Wednesday, August 1, 2012

African Copper suspends mining at Mowana to focus on Thakadu

Aim-listed African Copper interim CEO Jordan Soko on Tuesday said that the company’s Mowana, Thakadu and Matsitama assets held “tremendous growth opportunities” for the year ahead.

The company said it had suspended mining activities at the Mowana openpit mine, in Botswana, to focus on the higher-grade Thakadu openpit. Mining activities would resume at Mowana in early 2013.

Copper in concentrate production increased 67% year-on-year during the 12 months ended March, with recovery rates unchanged at 48%. African Copper reported that the recovery rates were expected to improve significantly as it mined deeper in the Thakadu openpit.

“Production in 2012 showed some positive signs. We are now determined to get our mining facilities right so that we can increase our throughput and production to levels that the high-quality assets justify," Soko noted.

During the year, the company spent about $7.9-million on capital upgrades at the plant and expects to progressively realise the benefit of this investment and to increase production as plant efficiency increases in conjunction with feed of higher recovery sulphuric ore.

Despite increased production pushing revenues for the year to March 31 to $42.8-million, from $24.7-million the year before, cost-related issues generated an operating loss from mining operations of $4.6-million.

The Botswana-focused miner said that plant inefficiencies, such as the failure of the pinion shaft and the processing of oxidic ore resulted in the losses.

“Our operating costs per ton remained above budgeted levels. Maintenance costs caused by major component inefficiencies and design upgrades throughout the plant were higher than originally anticipated,” the company said in a statement.

Wednesday, July 4, 2012

Review of Mining Law in Mozambique to be submitted to government in August

The final version of the proposal to revise the Mining Law in Mozambique is due to be submitted to the country’s Council of Ministers in August, the national director for mines, Eduardo Alexandre said in Maputo Tuesday.

On the sidelines of the Third Annual International Coal Conference, which began Tuesday in Maputo, Alexandre said that the future Mining Law, “will not have many changes,” but would reduce the validity of the start of mining from “10 to seven years,” which the government considers is enough time for companies to carry out surveys and make decisions based on them.”

Future mining legislation is intended to improve some standards included in the current Mining Law, thus becoming more appropriate for the current state of surveying and exploration of mining resources, specifically taxation of the transfer of licenses between national and foreign companies carried out abroad.

Speaking at the opening of the meeting, the deputy Mining Resources minister, Abdul Razak, said that, “one of the policies for the current legislation review for the mining sector is a process of fair sharing between investors and the State of the benefits resulting from mining activities.”

The legal standard should maintain, “attractive terms for foreign investment that are competitive when compared to those offered by other countries,” said the deputy minister.

The Third International Coal Conference is organised by International Mining Events & Metal and is intended to discuss the potential of coal in the north of the country and the impact of its exploration on the Mozambican economy

Sunday, May 20, 2012

Brazilian group targeting more African opportunities

Brazilian diversified mining major Vale has confirmed that its portfolio includes investments of $7.7-billion in projects in nine African countries. Speaking at a recent seminar on Africa hosted by Brazil’s National Economic and Social Development Bank (better known by its Portuguese initials, BNDES), Vale CEO Murilo Ferreira reaffirmed the importance of Africa in his company’s strategy.

He highlighted that Vale continued to be interested in the continent and specifically cited coal and copper as sectors in which Vale continued to make investments in Africa. These sectors have the potential to grow Vale’s African business, he pointed out. 
“For example, our investment in Mozambique is high –” said Ferreira, “equivalent to a third of the gross domestic product of that country.”

However, he assured that his group had no intention of having an “imperialist” posture in Africa. “We want to come [to Africa] in a sustainable manner, augmented with social responsibility,” he stated. Vale is interested in supporting the development of local labour and working with local entrepreneurs to establish and develop local supplier networks for its projects in Africa. 
The African countries Vale is currently active in are Mozambique, Malawi, Guinea, Liberia, the Democratic Republic of the Congo (DRC) and South Africa.

Mozambique is the site of Vale’s biggest coal project anywhere – Moatize. This produced 620 000 t of coal last year (although only 140 000 t had been exported by December 31).

Phase one of Moatize will have an annual production capacity of 11-million tons, made up of 8.5-million tons of metallurgical coal and 2.5-million tons of thermal coal. 
Phase two will double these figures. Vale is also exploring for more coal in Mozambique as well as working on a phosphates project and is part of a consortium searching for natural gas in the country.

The Brazilian group’s activities in Malawi are tied to its Mozambican projects and focus on Malawi’s railway system – Vale owns 51% of Malawi’s Central East African Railways (the Brazilian company is a major railway operator in its home country). Vale intends using this rail network, which it will upgrade (and build one new line) to help ship coal from Moatize to the the Mozambican port of Nacala. 
(Currently, coal from Moatize is carried along the Sena railway line to the harbour city of Beira.)

In Guinea, Vale is developing the Simandou/Zogota iron-ore project. Zogota should start production this year, ramping up to a full production capacity of 15-million tons a year.

Simandou, when it reaches full production, will have an annual capacity of 50-million tons.

As is the case with Malawi, Vale’s interest in Liberia is a railway to convey the output of the mine to the coast. However, the railway from Simandou/Zogota to the coast will be a new construction and not the upgrading of existing lines.

The Brazilian group’s operations in the DRC and Zambia take the form of a joint venture with South Africa’s African Rainbow Minerals, called Teal Exploration & Mining (Teal).

Teal owns the Konkola North copper project in Zambia and the Kalumines copper project in the DRC. Konkola North is currently being developed and is expected to start production next year, with an initial output of 45 000 t of copper, increasing to a full annual capacity of some 100 000 t in 2015. Kalumines has been undergoing a feasibility study.

Meanwhile, in Brazil, Vale has exited the kaolin business by selling its 61.5% share in kaolin miner Cadam to US company KaMin for $30.1-million. Cadam has an openpit mine, a processing plant and private harbour. 
The mine/plant site and the port are linked by a slurry pipeline. Vale sold its only other kaolin operation, Pará Pigmentos, in 2010.

Edited by: Creamer Media Reporter

Thursday, April 26, 2012

Newmont Announces First Quarter Net Income from Continuing Operations Up 9% to $1.13 per Share

DENVER, April 26, 2012 /PRNewswire/ – Newmont Mining Corporation (NEM) (“Newmont” or the “Company”) today reported attributable net income from continuing operations of $561 million or $1.13 per basic share ($1.11 per share on a fully diluted basis), up 9% from $514 million, or $1.04 per basic share in the first quarter 2011. Adjusted net income[1] was $578 million or $1.17 per basic share in first quarter 2012, compared with $513 million, or $1.04 per share for the prior year quarter.
First Quarter Highlights:
  • Consolidated revenue of $2.7 billion, an increase of 9% from the prior year quarter;
  • Average realized gold and copper price of $1,684 per ounce and $4.01 per pound, up 22% and no change, respectively, from the prior year quarter;
  • Attributable gold and copper production of 1.3 million ounces and 35 million pounds, down 2% and 35%, respectively, from the prior year quarter;
  • Gold and copper costs applicable to sales (“CAS”) of $620 per ounce and $1.98 per pound, up 11% and up 78%, respectively, from the prior year quarter;
  • Cash flow from continuing operations of $613 million, down 38% from the prior year quarter;
  • Second quarter gold price-linked dividend of $0.35 per share, an increase of 75% from the prior year quarter; and
  • Maintaining 2012 Company-wide outlook for production, CAS and capital expenditures.
“We are pleased to announce another quarterly increase in our net income from continuing operations, up 9% over the prior year quarter to $561 million, or $1.13 per share. We also saw gold operating margin expansion of 29%, which outpaced the 22% increase in the average realized gold price from the prior year,” said Richard O’Brien, President and CEO. “During the first quarter, we continued to invest in the development of our Akyem project in Ghana, which remains on schedule for initial production in 2014. Regarding Conga in Peru, the project continues to be suspended pending further analysis of the economic and technical impacts from the recently released report from the independent panel,” added Mr. O’Brien.
[1] Non-GAAP measure. See page 10 for reconciliation.
Newmont is maintaining its previously announced 2012 outlook for attributable gold and copper production of 5.0 to 5.2 million ounces and 150 to 170 million pounds at CAS of between $625 and $675 per ounce (on a co-product basis) and $1.80 and $2.20 per pound, respectively.
Newmont is also maintaining its 2012 attributable capital expenditure outlook of $3.0 to $3.3 billion, or $4.0 to $4.3 billion on a consolidated basis. However, this estimate assumes the development of the Conga project in Peru proceeds as anticipated in connection with our original 2012 outlook provided in January 2012. As previously disclosed, development of the Conga project was temporarily suspended in November 2011 and recommencement and future development remains subject to certain risks, including political and social risks, and uncertainties, including those relating to the Environmental Impact Assessment (“EIA”) review. The Conga project’s EIA, which was previously approved by the central government of Peru in October 2010 after an extensive public engagement process, was subject to a review by independent experts during the first quarter at the request of the central government. The results of the independent review were released last week and confirmed that the reviewed sections of the EIA met Peruvian and international standards. The Company is currently in the process of evaluating the recommendations contained in the independent report, and additional recommendations from the central government related to the report, to assess the impact on the project economics. The Company will reevaluate its capital expenditure outlook after completing that evaluation process and when the development schedule of Conga is more clearly defined. Should the Company be unable to continue with the development of Conga, the Company may reprioritize and reallocate capital to other development alternatives in Nevada, Australia, Ghana and Indonesia.

As previously announced, Newmont’s Board of Directors approved a second quarter 2012 gold price-linked dividend of $0.35 per share[2] based on the Company’s average realized gold price of $1,684 per ounce for the first quarter of 2012, an increase of 75% over the $0.20 per share dividend paid in the second quarter of 2011.

North America
Nevada – Attributable gold production in Nevada was 435,000 ounces at CAS of $617 per ounce during the first quarter. Gold production was consistent with the prior year quarter due to higher grade ore mined as Gold Quarry resumed production, offset by lower underground ore grade mined at Leeville and Midas.
Costs applicable to sales per ounce decreased 4% as higher underground mining and milling costs were more than offset by an inventory build in 2012 compared to a drawdown of inventory in 2011.
The Company continues to expect 2012 attributable gold production from Nevada of approximately 1.725 to 1.8 million ounces at CAS of between $575 and $625 per ounce.
La Herradura – Attributable gold production at La Herradura in Mexico was 54,000 ounces at CAS of $581 per ounce during the first quarter. Gold production increased 10% due to higher leach placement at Soledad-Dipolos and first production from the Noche Buena pit. CAS increased 49% from the prior year quarter due to higher employee profit sharing costs and Noche Buena commencing production.
The Company continues to expect 2012 attributable gold production from La Herradura of approximately 200,000 to 240,000 ounces at CAS of between $460 and $510 per ounce.

South America
Yanacocha – Attributable gold production at Yanacocha in Peru was 188,000 ounces at CAS of $458 per ounce during the first quarter. Gold production increased 27% from the prior year quarter due to higher mill throughput, recovery and grade, partly offset by lower leach production from La Quinua, Carachugo and Yanacocha. CAS per ounce decreased 21% from the prior year quarter due to higher production, partially offset by higher labor, diesel, and workers’ participation and lower by-product credits.
[2] Payable on June 28, 2012 to shareholders of record as of June 12, 2012.
The Company continues to expect 2012 attributable gold production from Yanacocha of approximately 650,000 to 700,000 ounces at CAS of between $480 and $530 per ounce.
La Zanja – Attributable gold production during the first quarter at La Zanja in Peru was approximately 13,000 ounces.
The Company continues to expect 2012 attributable gold production from La Zanja of approximately 40,000 to 50,000 ounces.

Asia Pacific
Boddington – Attributable gold and copper production during the first quarter at Boddington in Australia was 162,000 ounces and 14 million pounds, respectively, at CAS of $782 per ounce and $1.94 per pound, respectively. Gold ounces and copper pounds produced were consistent with the prior year quarter as 17% higher throughput was offset by 15% lower grade and 2% lower recovery. Gold CAS increased 31% due to processing lower grade ore, higher milling and mining costs, a higher proportion of costs allocated to gold, and a stronger Australian dollar. Costs applicable to sales per pound decreased 11% mainly due to lower costs allocated to copper.
The Company continues to expect 2012 attributable gold production of approximately 750,000 to 800,000 ounces at CAS of between $800 and $850 per ounce and attributable copper production of 70 to 80 million pounds at CAS of between $2.00 and $2.25 per pound.
Batu Hijau – Attributable gold ounces and copper pounds produced during the first quarter at Batu Hijau in Indonesia were 11,000 ounces and 21 million pounds, respectively, at costs applicable to sales of $913 per ounce and $2.00 per pound, respectively. Gold and copper production decreased 76% and 49%, respectively, due to lower throughput, grade and recovery as a result of processing lower grade stockpiled material as Phase 6 waste stripping continues. Costs applicable to sales per ounce and per pound increased 184% and 108%, respectively, due to lower production, higher labor and diesel costs, and increased waste stripping costs.
 The Company continues to expect 2012 attributable gold production of approximately 45,000 to 55,000 ounces at CAS of between $800 and $850 per ounce and attributable copper production to be approximately 80 to 90 million pounds at CAS of between $1.80 and $2.20 per pound.
Other Australia/New Zealand – Attributable gold production during the first quarter was 265,000 ounces at costs applicable to sales of $757 per ounce. Attributable gold ounces produced decreased 11% due to a planned mill shutdown at Waihi, mill maintenance at Kalgoorlie and a build-up of in-process inventory at Jundee and Kalgoorlie, partly offset by higher grade at Tanami. Costs applicable to sales per ounce increased 35% primarily due to lower production, a stronger Australian dollar, lower by-product credits, and higher diesel and royalty costs.
The Company continues to expect 2012 attributable gold production of approximately 980 to 1.03 million ounces at CAS of between $810 and $860 per ounce.

Ahafo – Attributable gold production during the first quarter at Ahafo in Ghana was 175,000 ounces at CAS of $568 per ounce. Gold production decreased 6% from the prior year quarter due to lower mill throughput and grade, partially offset by a reduction of in-process inventory and higher recovery. CAS per ounce increased 26% from the prior year quarter due to lower production and higher labor, diesel, and royalty costs.
The Company continues to expect 2012 attributable gold production of approximately 570,000 to 600,000 ounces at CAS of between $500 and $550 per ounce.

Capital Update
Consolidated capital expenditures were $720 million during the first quarter. Newmont is maintaining its 2012 attributable capital expenditure outlook of $3.0 to $3.3 billion, or $4.0 to $4.3 billion on a consolidated basis. Capital spending through the first quarter of 2012 has been lower than expected across the portfolio, due to temporary suspension of development at Conga, but is expected to increase throughout the year. For the remainder of the year, 60% of 2012 consolidated capital expenditures are expected to be associated with major project initiatives, assuming the development of the Conga project in Peru proceeds as originally anticipated, while the remaining 40% is expected to be sustaining capital.

Wednesday, March 14, 2012

South African gold production continues to plunge

Once the world's biggest gold producer by a huge margin, South Africa's gold production is continuing to dive with an 11.3% fall year on year in January, following an 8.2% drop in December.

South Africa, only a couple of decades ago the world's largest producer of gold by a huge margin, but recently overtaken by China, Australia and the U.S., and in danger of being overtaken by Russia, has seen the decline continuing according to Statistics SA.

The state statistical body's report on South Africa's mine production in January this year sees an overall decline year on year for all metals and minerals of 2.5%, but in the gold sector the decline was a massive 11.3%, more than even that in December when gold output fell by 8.2%

For the country's economy, higher metal prices have mitigated the production fall-off to a major extent, but the continuing output decline as many of the country's biggest gold mining operations have reached the ends of their lives and have closed down, and/or are having to work much lower ore grades, sees no end to the continuing downturn. The country's gold output is nowadays less than a quarter of what it was at its peak in the early 1970s and the fall-off has been the major contributor to at best flat global gold production over the past few years.

There is little prospect too of any serious reversal in the trend. The old mines that are still operating are mostly getting deeper and deeper with safety concerns a limiting factor, while new operations coming on stream tend to be either small by comparison, low grade, or both.

In terms of South Africa's overall mine production fall, gold is by far the most significant contributor, with coal and iron ore in particular bringing some resilience to the country's overall output picture. Even the beleaguered platinum sector saw a small output increase over the past three months compared with the similar preceding period.

Source: Mineweb

Monday, March 5, 2012

Sundance and Core looking to share rail infrastructure in West Africa

ASX-listed Sundance Resources Ltd and privately owned Core Mining Ltd are in talks to share rail and port infrastructure facilities that would service their iron-ore projects in the Republic of Congo, West Africa.

Sundance, the subject of a takeover, said the companies had signed a Memorandum of Understanding covering the use of future infrastructure facilities for Sundance's Mbalam/Nabeba iron-ore project. It added that it was also in talks regarding the potential for Core to access the Mbalam infrastructure and for other possible infrastructure solutions.

Sundance's Mbalam/Nabeba project is expected to produce 35Mtpa of Direct Shipping Ore (DSO)-quality hematite for about 10 years and then 35Mtpa of concentrate product from itabirite for a further 15 years.

Core has indicated it is targeting a similar production capacity at its Avima project to Sundance's Mbalam/Nabeba project. Avima is located about 65km west of Sundance's Nabeba project and approximately 42km kilometres to the south of Sundance's proposed rail infrastructure

"It makes a lot of sense for Sundance and Core to work together given we operate near each other and both have projects with high-quality iron ore assets," said Sundance chairman George Jones.

"Once in production, there is the potential to produce up to 70Mtpa of DSO just from our two projects alone," he added. "Once you consider all the additional resources in the surrounding area that may also come on stream, I believe the long-term potential of this region could be up to 100 million tonnes per year or more."

Sundance plans to construct a rail line from its deposits in the Republic of Congo and to a proposed new custom-built iron ore export terminal at the Port of Lolable in Cameroon.
Socrates Vasiliades, chief executive of Core Mining said, “This is a key step towards the removal of infrastructure barriers that is critical to the accelerated development of the Avima project and achieving production.”

Core has so far completed a feasibility study at Avima and identified two possible rail and port options for exporting the iron ore.

Last October, Sundance's board recommended an increased takeover offer from Hanlong Mining that valued the company at A$1.7 billion (US$1.8 billion).

Saturday, March 3, 2012

New study says 66% of institutional investors choose Africa as number one destination. No wonder. Have you seen the size of that place?

A new survey by The Economist Intelligence Unit finds when institutional investors interested in frontier markets were asked to choose two regions out of five, two-thirds see Africa as holding the greatest opportunity.
Asia came in second with 44% and Latin American third with 29%.

Africa emerged from the financial crisis relatively unscathed growing 2.8% during 2009 and the IMF forecasts continent-wide GDP growth of just under 6% in 2012. That is faster than Asia (including Japan) and Australasia and double the expected global growth rate of 2.9%.

A 2010 McKinsey study forecast that Africa’s combined economy would grow by $1 trillion by 2020, taking it to a total of $2.6 trillion.

Despite the robust growth and rosy outlook institutional investment on the continent is in its infancy with one in three organizations with more than $10 billion under management having no exposure to the continent.

That is will change rapidly however and within four years says the EIU all expect to have funds flowing into Africa. On top of that institutions are switching to long term investments rather than hot money.

The study says while macroeconomic and political risks definitely still exist, investors’ concerns have shifted to Africa’s technical issues like illiquid capital markets; evidence of how far the continent have progressed in terms of overall stability.

Africa contains 54 countries and a total population of 1 billion and its biggest problem remains “to overcome deeply entrenched perceptions” says the EIU.

One such misconception is a fairly banal one: Africa is in reality much bigger than it appears on maps – the land mass can accommodate the US, China, India, Japan and Europe.

Click on the map below for a detailed geographical infographic. Click here to download the Economist Intelligence Unit and Invest AD report titled Into Africa.

SOURCE: Frik Els -

Friday, February 24, 2012

Zimbabwe partially rejects Mimosa indigenisation plan

JOHANNESBURG  – Platinum miners Impala Platinum (Implats) and Aquarius Platinum said on Friday that Zimbabwe had rejected a portion of the indigenisation plan for the Mimosa mine, which they jointly own.

Implats said it would negotiate with Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere to reach a mutually acceptable solution. However, the Johannesburg-based miner expressed concern that enforcement mechanisms would be activated should no agreement be made to transfer the required shareholding to a National Indigenisation and Economic Empowerment Fund within 30 days.

Under Zimbabwe’s indigenisation initiatives, all foreign-owned companies with an asset value of $500 000 and above were required to surrender 51% of their shares to locals by May 2015.
Earlier this month, Kasukuwere reportedly told media that Implats should dispose of its interest in Mimosa and leave Aquarius as the shareholder of reference for funding and technical support.
However, Implats stated that it did not receive an official notification to sell its stake.
Analysts at Liberum Capital stated that, while Mimosa was in danger of expropriation, the seizure of the mine was a worst-case scenario and a compromise could still be reached between Implats, Aquarius, and the government of Zimbabwe.

Cadiz mining analyst Peter Major commented that Zimbabwe needed to set out clear, concise, consistent, structured and ‘transparent’ mining and ownership regulations.
If there had to be 26% or 51% or other percentage black ownership – these percentages needed to be explicitly defined and elaborated on, he said.

“[For Zimbabwe] to say this is our starting point, companies must bring us ‘their’ proposals, ‘their’ counters to ‘our’ suggestions, is not doing the country much good,” Major added.
This could result in about 300 different mining companies "all cutting their own deals behind closed doors with government and increased the possibility of bribery and corruption".
“This kind of ‘official policy’ will only delay the amount and types of investment and foreign mining companies entering the country,” he said.

In January, Zimbabwe increased pre-exploration fees for most minerals by as much as 8 000%, with registration charges for platinum rising to $2.5-million.
Zimbabwe's new mine licence fees and resource rentals, which would significantly increase the cost of mining, would result in as much as 60% of mining revenues going to the government.
Implats earlier said that it had asked the Zimbabwe government for a review of the new mine surface rental fees, which increased the cost for its Zimplats operation to $48.5-million, from the current $45 000 a year.

The new fees, combined with the country’s 2012 Budget announcement of 10% platinum sector royalty increases, would “seriously hurt” miners, the Zimbabwe Chamber of Mines said at a Parliamentary committee hearing.
Should these fees be implemented as was gazetted, it would cost the Zimbabwe mining industry as a whole some $1-billion a year, which was equal to its entire revenue, Reuters reported.
"The fee structure is unworkable. The industry is already overburdened by the totality of statutory charges, royalties, levies and commissions," the newswire quoted Chamber of Mines VP Allan Mashingaidze as saying.

The Zimbabwe government also threatened to impose a ban on the export of raw platinum and introduce laws that would require all platinum producers to set up refineries in the country within the next five years.
Zimbabwe Chamber of Mines president and Mimosa MD Winston Chitando announced plans to form a platinum producers association to deal with the challenges, such as hefty mining royalties, serious liquidity problems and continued disruption of power supplies, affecting the mining sector.


Meanwhile, Implats was still facing labour challenges at its Rustenburg operations in South Africa, where it had lost some 80 000 oz of platinum production over the past few weeks owing to illegal industrial action.

The strike led to the dismissal of over 17 000 people earlier this month. The company was rehiring employees and to date over 8 000 workers had been rehired. However, Implats warned that it could take weeks before the mine is back in full production.

The company's refinery had held enough supplies to process platinum-group metals for four months, however, Implats reportedly expected production in April to drop by at least 50%.
Aquarius on Friday afternoon experienced a drop in share price of 8.63% to R16.10 a share, while Implats dropped by 0.16% to R165.94.