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Tuesday, 29 July 2014

Uganda’s hopes in extractives sector lie in EITI

Uganda has high expectations in the extractives sector, especially with an addition of oil and gas resource to the basket of the abundant mineral resources. However, these hopes can only be realised if the country agrees to sign up to the Extractive Industries Transparency Initiative (EITI).

The EITI is an international standard for transparency in extractive industry payments and receipts.

In countries participating in the EITI, companies are required to publish what they pay to governments and governments are required to publish what they receive from companies. For Uganda, only Tullow Oil Plc has done so.

The Ministry of Energy and Mineral Development recently conducted a two-day consultative workshop at Speke Resort Munyonyo to review the mineral policy, law and taxation. This is in addition to the highly-geared second edition of the Uganda Mining, Energy, Oil and Gas conference and exhibition scheduled for May 20 and 21 next year. Uganda Chamber of Mines and Petroleum, in partnership with the Energy ministry, is organising the 3rd Mineral Wealth Conference, 2014, scheduled for October 1 and 2, 2014. Its theme is: “Uganda’s Transformation: A New Era in Mining”.

These and other efforts are an indication that the extractive industry is taking centre stage in the governance of Uganda’s political economy. We appreciate that the Uganda government has interested itself with full force in investing in extractives resources. This is one way of enhancing its resource envelope to improve the standard of living for Ugandans and reach out to the poorest of the poor.

Hitherto, Uganda deliberately undertook the Sustainable Management of Mineral Resources Project (SMMRP), from 2008 to 2012, with financial and technical support from World Bank, African Development Bank and Nordic Development Fund. Under this project, the government undertook geo-surveys and mineral resources assessment in which it identified potential mineral target areas for exploration and development.

According to official records obtained from the Energy ministry, since 2012, more than 726 licences in mineral development and mining have been issued, up from 100 in the previous ten years. This means that Uganda’s prospective bases have increased over time, hence expanding the extractives sector as well as increased payments in terms of revenues from, so far, the concessional licences.

This will add onto the projected value of the 3.5 billion barrels of oil so far confirmed from Uganda’s additional golden resource, estimated to have so far contributed $2.4bn in foreign direct investment (FDI). The growing positive expectations and needs of the sector with the growing well-intentioned ideals of government, as stipulated in both the National Development Plan (NDP) and Vision 2040, need to be insulated by both the national and international bulletproofs.

This should be through signing up to EITI. Definitely, it is in the interest of government to see that Ugandans are getting out of poverty and enjoying services. That alone will earn the government support and, therefore, the next term in office. The EITI campaign benefits government more than the activists, especially CSO representatives and passionate individual campaigners.

In order to support government to spearhead the translation of natural resource wealth into better development for the local citizens, the EITI becomes the key centrepiece of the value-chain.

The EITI further increases public information, thereby empowering the public to put to task their government to account for every penny of the resource revenues, which many governments in Africa tend to fear. It also helps in enhancing revenue collection and management, for improved service delivery.

In other cases, EITI enhances opportunities for attracting investors; increases trust among key players in the governance and the service delivery chain (citizens, government, CSOs, private companies and investors), and hence makes it easy for constructive dialogues and effective prioritisation. The EITI debate should, therefore, be mainstreamed in all government undertakings, including the aforementioned events and other conferences.

Source: The Observer

Monday, 28 July 2014

Africa Oil & Tullow Oil likely to seek partner for Kenyan oil fields

Canadian explorer Africa Oil Corp. and its partner Tullow Oil are likely to bring in a third partner to help develop their oil discoveries in northern Kenya, Africa Oil's chief executive officer said.
The firms discovered oil reserves in Block 13 T and Block 10 BB in northern Kenya's South Lokichar Basin, estimated at a combined 600 million barrels.
Experts say those reserves are enough to make a pipeline viable even without factoring in crude deposits of 3.5 billion barrels, found in neighbouring Uganda.
"We will likely bring on a partner to help develop Lokichar Basin reserves but no timetable has been set," Keith Hill said in an email response over the weekend to questions from Reuters.
Oil discoveries in Uganda and Kenya and gas deposits found off Tanzania and Mozambique have turned east Africa into a hot spot for hydrocarbon exploration.
Kenya, Uganda and Rwanda have invited bids for a single consultant to oversee a feasibility study and initial design for the construction of a 1,300-kilometre (808-mile) pipeline to transport crude to the Kenyan coast.
In April, executives of both Tullow and Africa Oil said they aimed to submit development plans to the Kenyan government in late 2015 for their discoveries.

Africa Oil also holds licences for exploration blocks in Ethiopia and in Puntland, a semi-autonomous enclave in Somalia.
Hill said Africa Oil plans to spend some US$1.6 billion this year and next in exploration activity on its blocks in the three countries.
"Our gross budget this year is over US$800 million ... and we would expect a similar amount next year but (that) budget has not yet been approved," he said.
Africa Oil and its partner Marathon Oil Kenya Limited B.V., a unit of U.S.-based Marathon Oil Corporation have also discovered gas in Block 9 in northern Kenya.
Hill said while the amounts had not been proven, they estimated the gas discovered at the block's Sala-1 well at between 0.5 trillion and 1 trillion cubic feet, although tests were still being carried out.
"(We) will spud Sala-2 appraisal well before end of July to help confirm," he said.
When announcing the discovery in late June, Africa Oil said it had held discussions with the government and power companies to see how to fast-track a gas-to-power project at the site.
"We have held several meetings with GofK (Government of Kenya) to progress gas-to-power project terms and believe these will be sorted out in next 60 days," Hill said.
Source: Reuters

Friday, 25 July 2014

Results prove surface mineralisation of graphite project in Tanzania

The consistency of Australian company Kibaran Resources second group of assay results from the recent reverse circulation (RC) drill programme at its Epanko deposit within the Mahenge graphite project in Tanzania confirms significant graphite mineralisation at its surface.

The drilling programme focused on shallow, highly-weathered soft graphite mineralisation, as the liberation and preservation of large and jumbo flake size is paramount in maximising sales revenue. Results for the remaining 29 RC drill holes are expected to be released in the next few weeks.

The Mahenge project is a historically recognised graphite occurrence in south-east Tanzania. Past exploration work has identified course flake, excellent grade graphite material within the project area. The project hosts the Epanko Deposit – a 100%-owned graphite target comprising a western and eastern zone of mineralisation.

Thursday, 24 July 2014

Logistics eased in Zambian Copperbelt

Logistics and supply chain group Imperial Logistics has extended its African presence into northern Zambia, by establishing a transport depot in Ndola, in the Copperbelt Province. The new Zambian registered business forms part of group company Snyman Transport, and will operate as Snyman Transport Zambia.

Dougie Truter, chief executive officer of Imperial Logistics’ Africa division, says the new venture will enhance the group’s ability to provide transport and logistics services to the mining firms operating in the region, while creating employment opportunities for locals.

The new depot represents Imperial Logistics’ first undertaking in the Zambian Copperbelt Province, which encompasses the towns of Kitwe, Chingola and Ndola.

Wednesday, 23 July 2014

Namibian lead and zinc mine gets another chance

London exploration company North River Resources has secured a US12-million dollar equity funding commitment from private equity firm Greenstone Resources. It will be used to re-open its flagship Namib lead and zinc mine near Swakopmund in Namibia.

The company has released a mine development plan and site preparation and work to complete a feasibility study has begun. Consultants Snowden estimate a mine and plant capital expenditure of US25-million dollars, based on a 56-month production period, with 660 000 tonnes (t) of milled current inferred resources averaging 8,5% combined lead-zinc and 46 grams per tonne of silver.