Liberia’s first gold mine on schedule

About 70% of development at Liberia’s first gold mine is complete and the mine is on track to start producing in March next year. This is according to David Reading, CEO of Aureus Mining, the London-listed company that owns the New Liberty Gold project in the north-west of Liberia, about 80km from the capital of Monrovia.

South African-based company DRA has been appointed engineering, procurement, construction and management contractor and will be responsible for building the processing plant, mining infrastructure including the mining village, river diversion and tailings storage facility (TSF). Aureus Mining is to do the pre-strip and pit development.

Earthworks at the mine started in December 2012 and are almost complete. The river diversion is 90% done while the TSF is on track to be finished by late December. DRA has started constructing the steel frame for the plant. When asked about risks in Liberia, Reading tells African Mining that, despite the country’s long mining history, infrastructure and getting work done on time remain the primary concerns.

Minerals in Africa must benefit all parties says expert

Key among the difficulties and risks of mining in Africa is managing the expectations of communities around mines, as well as the relationship with government  – especially the custodian agency custodian of mineral rights.

So says Roger Dixon, chairman and corporate consultant at SRK Consulting (SA), which has four decades of African experience.

“There is growing acknowledgement the world over that minerals must benefit all affected parties, and this has sadly not been the case in many African countries.

“The rise of resource nationalism is partly a response to this fact, and mining companies need to become proactive partners in ensuring and demonstrating more positive impacts from mining,” Dixon says.

Largest energy merger and acquisition announced

Theme International Holdings’ US 1-billion dollar (about R10,6-billion) offer for oilfield exploration and production company Everest Hill Energy is the largest merger and acquisition deal to be announced in sub-Saharan Africa so far this year, according to Keith Nichols, managing director for Africa of Thomson Reuters.

Boosted by this deal, energy and power was the most active sector, accounting for 33% of first half deals. Nichols also discloses that energy and power was the most active sector for equity issuance in the region. The largest initial public offering, and the second largest equity offering during the first six months of the year, was from Nigerian-based Seplat. The oil company raised US540,5-million dollars  in a dual listing on the London and Nigerian Stock Exchanges in April.

Speaking about debt capital markets in sub-Saharan Africa, Nichols points out that debt issuance during the first half of 2014 marked the highest first half total since 2011. “The African Development Bank, headquartered in the Ivory Coast, raised a total of US$2.7-billion dollars, accounting for 53% of activity in the region. Deutsche Bank took the top spot in African debt ranking for the first half of 2014 with US$1.2-billion dollars, or a 22% share. Barclays and Citi followed in second and third positions.”

Standard Bank: East African oil and gas discoveries to kick-start economic transformation,

East African oil and gas discoveries are poised to fundamentally transform the economies of the region as the fuel resources usher in new investment in road, rail, power and industrial infrastructure, according to Standard Bank.

Uganda, Kenya, South Sudan, Ethiopia, Tanzania and Mozambique have emerged as one of the most prolific oil and gas exploration regions in the world over the last 10 years, says Mr Simon Ashby-Rudd, the London-based global head of oil and gas at Standard Bank, Africa’s biggest lender. These discoveries will establish the region as a major hydrocarbon province in the decades to come and drive wider economic growth throughout East Africa.

“Over and above the traditional oil and gas regions in Africa, notably West Africa, East Africa has essentially been a forgotten desert in terms of upstream oil and gas exploration over the last 40 years,” said Mr Ashby-Rudd. “This has changed completely over the last decade, oil and gas companies are starting to realise the potential in nations along the East African rift valley and Standard Bank believes this is going to fundamentally transform the region’s economy.”

Oil exploration in East Africa was sparked off by the discovery of between 1.5 and 2 billion barrels of commercially viable oil reserves in northern Uganda in the middle of the last decade. Last year the country announced that total known oil reserves in the country were estimated at about 3.5 billion barrels.

The discovery of oil in Uganda coupled with the fact that exploration licences in East Africa were comparatively cheap due to the fact that the region was not regarded as an oil rich area, ushered in further exploration activity in other countries along the Rift Valley. As a result, further oil discoveries were made in southern Ethiopia and Kenya with additional gas finds in Tanzania and Mozambique.

One of the biggest indicators that the region is likely to experience an oil- and gas-led boom in the next half decade is the fact that several projects in East Africa are likely to come on stream at similar times.  Mozambique and Tanzania’s gas and liquefied natural gas projects are expected to come on stream in 2019 with Kenyan and Ethiopia expected to begin commercialisation of their oil deposits over the next six to seven years. Uganda is set to begin oil production by 2018/19, while South Sudan is already producing.

“Oil investment could accelerate the economic growth of several economies in the region,” said Mr Ashby-Rudd. “While the discoveries might be fairly modest in a global context, they’re very significant in a regional economic context.”

Plans are now underway to construct an oil pipeline linking Uganda’s oil fields to the coastal port of Lamu in Kenya. In February this year Uganda signed a memorandum of understanding (MOU) with oil companies operating in the country to facilitate the development of an oil refinery in the country as well as a pipeline that enables crude reserves to be exported.

“A pipeline would really kick-start economic growth in the region as it would usher in additional investments, the necessary infrastructure which in turn will enable further investment in industrial operations,” said Mr Ashby-Rudd. “Oil thus becomes the catalyst for an economic transformation across the region. An oil pipeline could become the backbone on which an entire infrastructure corridor could be constructed.”

Mr Ashby-Rudd says Uganda’s efforts to link its oil reserves to the coast to facilitate exports could be replicated by other landlocked nations in Africa.  This would allow additional infrastructure corridors to be developed as a means of harnessing the economic potential of central and east African nations such as Tanzania and the Democratic Republic of Congo.

Burgeoning economic growth in East Africa is also likely to result in increasing demand for fuel within that region, which imported a collective $10bn of fuel and petroleum products in 2012. Standard Bank expects total demand for petroleum products in East Africa to treble by 2030 with Kenya likely to remain the largest market in the region, which the bank estimates will record compound annual growth rates of between 5% and 7% over the next half decade.

This is press release by the Standard Bank South Africa

Nigeria: Experts advocate oil firms cordiality with host communities

As Nigeria continues to battle insecurity caused by Boko Haram insurgents, oil and gas experts have advocated a more cordial and harmonious relationship between multi-national oil companies operating in the country and the host communities in order to prevent induced violent crisis. They also urged the Federal government to enact laws to protect the rights and interest of the host communities and the need for oil companies to relocate their headquarters to the areas of operation.

These were part of the resolutions at a one day conference on ‘awareness of oil and gas development activities and its implication on communities’ organised by OPL 274 host communities in Delta North, in conjunction with Pan Ocean Oil Corporation, held yesterday at Owa Royal Palace, in Ika North East local Government of the State. A development activist and legal practitioner, Dr. Akpos Mudiaga Odje, in a 17-page presentation said there was urgent need for the enactment of ‘laws specifically to protect the interest and right of host communities’.

Odje said, “there is still no express or implied contract between oil companies and host communities”, saying, “at best what we have is usually a memorandum of understanding, as there is urgent need for insertion of dispute and crisis avoidance clause in the MoU to avoid the unnecessary frustration that follows litigation and violence between HOSTCOM and oil companies.” He said most of the violence and destruction witnessed at the areas of operation can be traceable to the neglect and failure by these oil companies to carry out their social responsibility, as “the communities are reduced to a state of pandemic poverty and arrested development, thus prompting violent uprising and shutting down of oil rigs and productions”.
He pointed out that the relocation of oil company head offices to their areas of operation would create development and employment to teeming youths in the region, as that would promote peaceful co-existence between the communities and the oil companies.