Glencore eyes Guinea’s iron ore deposits

Glencore has expressed interest in iron deposits in Guinea, although the company said it had not pitched for a stake in Simandou. Reuters reports that Glencore is the latest mining major looking to invest in iron ore assets in Guinea. Most interest is focused on Simandou, one of the biggest deposits, however, any potential investors in Simandou are treading carefully. 

Israeli-owned BSG Resources, which was stripped of its licence to develop part of Simandou following a Guinean corruption investigation, is seeking arbitration and has threatened to sue companies that invest in its former licence area. Three sources close to the government said London-listed Glencore had indicated its interest in investing in Simandou, in a meeting with government officials in Conakry in June.

ArcelorMittal has, meanwhile, announced it had signed deals to purchase stakes in an iron ore project in Guinea. According to an Engineering News report, ArcelorMittal said that it would buy a 43.5% stake in Euronimba from Billiton Guinea, a unit of BHP Billiton and a 13% stake from Compagnie Francaise de Mines et Metaux, a unit of Areva. 

Euronimba holds a 95% indirect interest in the Mount Nimba iron ore project, a deposit with an estimated 935m tonnes of direct shipped ore with an average grade of 63.1% of iron. The site is about 40km from ArcelorMittal’s mine in Liberia. The company should be able to use its Liberian railroad and port facilities, meaning that its capital expenditure would be much lower than otherwise the case, CFO Aditya Mittal said. He added that approval for exporting ore from Guinea to Liberia was critical to the acquisition.

Ebola: Mining companies affected and urged to ready pandemic contigency strategies

The World Health Organisation (WHO) has declared the spread of Ebola in West Africa an international health emergency. According to BBC News, WHO officials said a coordinated international response was essential to stop and reverse the spread of the virus. Although the recommendations stop short of international flight and trade restrictions, they have symbolic significance. The measures are designed to ‘galvanise the attention of leaders of countries at a top level,’ says director-general Dr Margaret Chan. Keiji Fukuda, the WHO’s head of health security, said that with the right steps and measures to deal with infected people, Ebola’s spread could be stopped.

The Ebola out-break should act as a timely reminder for companies to ensure they have pandemic strategies in place as part of their business continuity management plans. Tracey Linnell, GM: Advisory Services at ContinuitySA is quoted in ITWeb as saying: ‘Companies need to look at the current Ebola outbreak and what risks it poses to them and their employees, and put protocols in place now At the same time, they should make sure their overall approach to pandemics is in place.’ Linnell says that companies whose people travel into the region or that have business relationships with it need to be sure they are educating staff about symptoms and are monitoring the health of at-risk employees. They also need to have a plan for getting employees out of countries they might be visiting if borders are closed. Linnell says that companies that documented pandemic strategies for the SARS scare in 2003 could use them as the basis for an Ebola strategy. Companies need to have a comprehensive strategy in place for educating staff about the risks posed by Ebola, and inform them about the emergency procedures put in place should they show any symptoms.

Contractors at ArcelorMittal SA’s iron ore mine in Liberia are evacuating the country and other miners are sending staff home to prevent the spread of the deadly Ebola virus, reports Reuters Health. Mining companies in West Africa are acting swiftly to keep Ebola at bay, screening employees and restricting access to remote mining camps while keeping production of iron ore and gold ticking. A prolonged outbreak, however, will threaten mineral production in Sierra Leone, Liberia and Guinea if essential supplies are disrupted and employees stay away from work too long. Or worse: should a miner or family member contract the virus. ‘I think everyone is mindful that it's something that has the potential to impact businesses,’ Mark Bristow, CEO of Randgold Resources, which mines gold in Mali, across the border from Guinea, is quoted as saying. Though it has no mines in countries affected thus far, Randgold is among several miners in West Africa to have launched preventive measures against the Ebola outbreak.

Minerals group Sierra Rutile has begun screening its workers for early signs of Ebola, put travel restrictions in place and limited access to its operations in West Africa. Engineering News reports that the company, which mines rutile in south-west Sierra Leone, said the measures were precautionary and designed to reduce any risk to its employees, contractors and visitors. There have been no reported or suspected cases of Ebola to date at Sierra Rutile’s operations and production has not been disrupted as a result of the outbreak. The company said it had contingency plans should the situation worsen.

African miners thinking green

African mining companies are exploring renewable energy technologies as a means of securing a stable supply of clean and cost-effective electricity for their operations.

Anglo Gold Ashanti’s Wouter Ferreira describes renewable energy as the future. The water and energy engineer of the Engineering Field Services arm of the company cites rising costs of electricity and unreliable supply as reason enough for the company to move into this arena.

Coenraad Pretorius, energy engineer of Anglo American, says renewable energy projects also have a role to play in the energy efficiency initiatives of the mining house. The company has implemented three small-scale solar projects and, he says, “has more in the making”.

Steel company ArcelorMittal has also been involved in smaller solar projects and is exploring gas as a potential source of fuel for electricity production.

Francois van der Bank, senior engineer at ArcelorMittal, agrees, saying that renewable energy can be invaluable to the company’s energy efficiency drive.

Britain to fund South African carbon trading experiment

Britain will expand funding for a programme to help coal-rich South Africa develop a carbon trading market in an attempt to rein in its rising greenhouse gas emissions.

The British High Commission in Pretoria last week said it will fund a pilot emissions trading programme from next year to help companies prepare for a 120-rand-per-tonne ($11.21) carbon tax that is expected to come into force in 2016.

The value of the grant was not disclosed.

The launch of South African's carbon tax, which would apply to major emitters including steel giant ArcelorMittal, utility Eskom and petrochemical group Sasol, was delayed by one year to allow more time for planning and consultation with stakeholders.

The South African government earlier this year said major emitters will be allowed to use carbon offsets, which could be generated by investment in domestic or possibly regional clean energy sources, to help meet their tax obligations.

The British High Commission's grant, awarded through its Prosperity Fund, will for a second time go to Johannesburg-based Promethium Carbon.

"Funding from the Prosperity Fund will assist to fast track the development of a local carbon trading system in preparation for the carbon tax," said Robbie Louw, a director at Promethium.

Promethium was first selected by the Commission to carry out a 2013 preliminary study as to whether a carbon offset market could complement the tax and help ease costs for industry.

Promethium said the first phase of the study found such a market could function, so a second phase, expected to conclude next February, will focus on how to start trade and on launching a pilot market on the Johannesburg Stock Exchange from 2015

Promethium estimates South African offsets could reach prices of around 80-100 rand ($7.48-$9.35) per tonne in the first couple of years of the market's existence – or nearly 20 times the value of credits offsets in the U.N. carbon market, the world's largest and most liquid.

More than 80 percent of South Africa's soaring greenhouse gas emissions come from its energy sector, which is heavily reliant on coal – one of the country's major exports.

Expected to be phased in over time, the country's carbon tax is one of several initiatives, including a biofuels production incentive and higher vehicle emission taxes, which South Africa wants to launch to help reduce its growing carbon footprint.

($1 = 10.7009 South African Rand)

Source: Reuters