Mali cancels mining permits

Mali has cancelled 130 mining permits, about 30% of existing permits in the gold-producing West African nation, in a drive to clean up the sector, reports The Africa Report. The new government said in September that it will carry out a complete inventory of existing mining contracts, titles and licences and was ready to renegotiate permits that were not in the country’s interest.

Hassimi Sidibe, a technical adviser in the ministry said the cancelled permits include those held by Malians as well as foreigners and targeted those where no development has taken place. The mines ministry said the cancellation would effectively unfreeze those permits and allow the government to issue them to other investors with the technical and financial ability to pursue explorations.

South Sudan fighting delays gold mining by a year

South Sudan will delay the start of gold mining by a year from its planned date in 2016, due to fighting between rival political groups in the world’s newest country, reports Engineering News.

South Sudan is attempting to diversify its economy away from oil by exploiting its gold deposits. It may also have reserves of other minerals such as copper, uranium and clay, which it hopes to exploit with the help of investors. ‘There are a lot of applications coming in ... not only for gold but also copper, marble and limestone from Kapoeta (town) for production of cement,’ Andu Ezbon Adde, undersecretary for mining in the Ministry of Petroleum and Mining, said following a meeting with Australian government officials.

Loisa Cass, first secretary at the Australian High Commission in Juba, said South Sudan’s mining sector had potential but required legislation to create a legal foundation.

Source: Engineering News

Sundance inks Republic of Congo mining convention

Iron-ore developer Sundance Resources has signed the Nabeba mining convention with the government of the Republic of Congo.

The signing follows the issue of the mining permit, which was approved in December 2012, and outlines the fiscal and legal terms and conditions that Sundance has to satisfy for the development and management of the 35-million-tonne-a-year Nabeba iron-ore project.

Sundance MD Giulio Casello said on Friday that the signing of the convention was the culmination of the strong support given to the project by the Congo-Brazzaville government, since the company started exploration at Nabeba in 2010.

“In just four years we have achieved extraordinary success in the Republic of Congo, with the Nabeba deposit now boasting a significant high-grade hematite reserve, as well as substantial itabirite resources. This world-class inventory will underpin a successful mining operation for many years, generating substantial economic benefits, including employment opportunities for the Congo people.”

Under the key terms of the convention, Sundance would have a 25-year operating licence, effective from the publication of the mining permit decree, and which was renewable for successive terms of up to 15 years, depending on the remaining reserves.

The company would also be given a five-year corporate tax holiday following the start of production, after which corporate tax would be levelled at a rate of 7.5% for five years, and 15% thereafter.

A mining royalty equal to 3% of the mine gate value of all the extracted ore would also be applied. Furthermore, the state government would take a 10% interest in Sundance subsidiary Congo Iron SA, which would be non-dilutory during the term of the convention.

Furthermore, there would be no fees, levies or taxes charged on the export of iron-ore from the mine, and there would be exemptions from import duties and taxes on plant and equipment imported temporarily for project construction, and limited import duties and taxes on other mining equipment and consumables throughout the production phase.

Congo Iron SA would make yearly contributions to a fund established to promote the economic, social and cultural development of local communities, which would be impacted by the Nabeba mine.

The Nabeba deposit would underpin Stage 1 of the project development, which was a 35-million-tonne–a-year direct shipping ore operation, which would run for a minimum of ten years.

Casello said that the signing of the convention meant that Sundance had taken another significant step towards finalising the preconditions for financing and the start of construction.

By Esmarie Swanepeol

Smelting expansion on Zambia’s cards

The capacity of Zambia’s existing three copper smelters is insufficient to process the increased volumes of concentrate produced by the country’s copper mines, even with a new 1,2 million tonne per annum smelter comes on line.

Canadian-based mining company First Quantum Minerals’ Kansanshi copper mine, in the north-west province of Zambia, has accumulated stockpiles of more than 200 000 tonnes of copper concentrate, worth about US$ 350-million dollars, which will be reduced only when the new smelter at Kansanshi starts operating later this year.

According to First Quantum CEO Matt Pascal, it is the largest single copper smelter ever built. “Even once the smelter is commissioned later this year and goes into full production during the next couple of years, there will still be too much concentrate in Zambia for the smelting capacity. As a result a new smelter expansion project is already on the cards,” he says.

Zest Energy to commission Diesel Power Plant in Zambia

Zest Energy is moving towards commissioning its first reference site for diesel power generation in Zambia. The order was placed by Mopani Copper Mines in August 2013 and calls for the supply and installation of a 12 MVA diesel power plant.

The scope of this project comprises the supply of six Perkins 4016 TAG2 diesel engines and 400 V alternators, complete with spare parts for operations and maintenance, six 2 250 kVA dry type 400V/11 kV step-up transformers, 11 kV switchgear for the integration of generators from the power plant, all equipment needed for the generator plant control room including synchronisation and protection systems and all cabling within the mine’s generator plant building.

Alastair Gerrard, Zest Energy projects manager, says all equipment being supplied will be installed in a newly built plant building. Three complete synchronisation panels are also being supplied for integration of the local energy utility Copperbelt Energy Corporation’s 11 kV incomers. The system will have the additional functionality to perform at peak.

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.

Mining law delay may cost Kenya major investment

Regulatory uncertainty, corruption and infrastructural deficiencies could cost Kenya billions of shillings in lost investment.

Chris Bredenhann, PwC Africa Oil & Gas Advisory Leader, believes that delays in passing the Mining Bill, and the resulting regulatory uncertainty, could force investors to put their money elsewhere on the continent. He cited Nigeria’s example where delays cost the country between $50 million (Sh4.4 billion) and $100 million (Sh8.8billion) in lost investment.
The news comes after a review on Africa’s oil and gas industries published yesterday showed that key investors had delayed or cancelled projects elsewhere in Africa due to regulatory uncertainty or legislative delays.

In a phone interview on Wednesday, Bredenhann told the Star that delays increase the likelihood that exploration firms will target Kenya’s competitors: “There is evidence in Africa that companies indicated they had plans to invest but went elsewhere”.
“They cannot move forward with doubts, given the long-term nature of the needed investments,” he added.

Oil was first discovered in January 2012, by Tullow Oil Plc, but 18 months later the legal framework is still at the debate stage in parliament. The first off-shore gas deposits were found last September.

Mary M’Mukindia, an industry expert, said in a phone interview yesterday that she believed delays and poor regulation could impact heavily on gas exploration. “If there aren’t rigorous structures in place, including pricing structures or formulas which relate to generating electricity from gas, then that will impact negatively. We [Kenya] are are also competing for investment dollars with other attractive locations.” On the subject of infrastructure she added: “Definitely infrastructure is an issue. Back in June one of the logistical companies made a plea to Minister Balala over a bridge that is in danger of collapsing. It led to the gas exploration areas, so it would shut down the industry! And that is just one little bridge.”

The report adds pressure to Mining Minister Najib Balala, whose exclusive power to grant mineral rights contracts has this week been questioned by MPs. Members are now planning to introduce amendments that would create a board to exercise some of those powers and check against abuse, a move that will further delay the bill’s passing into law. The review details that, in other countries, companies indicated that uncertain regulatory framework was a significant impediment to developing an oil and gas business.

Although Kenya’s oil and gas industry is nascent, its challenges reflect those felt previously by organisations around the continent, with the top three issues of uncertain regulatory framework, corruption and poor physical infrastructure also identified as the biggest challenges facing Africa in 2010 and 2012.

The PwC report shows that despite issues, the oil and gas industry in East Africa continues to show substantial growth, with new hydrocarbon provinces developing at a significant pace.

Earlier this week analysts at Standard Bank reported that recent oil and gas discoveries have the potential to fundamentally transform Kenya’s economy through investment in road, rail, power and industrial infrastructure.

Source: The Star

New mining laws in Rwanda target large scale investors

The Rwandan Government is targeting large scale investors under the amended mining Law published yesterday in the Official Gazette, as part of efforts to ensure maximum productivity of the sector.

Challenged with under exploitation despite its enormous potential, the mining sector has shown signs that it can be Rwanda’s leading foreign exchange earner and according to the State minister for mining, Evode Imena, the new law marks an important shift.

“The main thing that has changed in the law is the provision of new types of licenses. With the previous law, we were only allowed to grant a license of five or 30 years – nothing in-between. Five years was for artisanal or small-scale mining, while 30 years was for large scale,” Imena said yesterday.“This was problematic because most mines tend to be small. It means they try to be organised and use skilled labour, but the duration of five years was too short for them, yet government was reluctant to grant 30 years to small-scale investors because they do not show capacity to manage mine concessions on a large-scale.”

“The duration of license now depends on the size and nature of mineral deposits, as well as the size of investment to be injected in a concession. This will be shown through a feasibility study conducted by the investor.”

“Now the smallest license will be for five years and the longest for 25 years, In-between we can give anything depending on the nature and size of the deposits,” the minister said.

The mining fraternity welcomed the new law. “The old one was unfavourable since it required an investor to only get a license of five or 30 years, many investors were not ready to carry out proper business plans because the duration given by government was not flexible,” Jean Malic Kalima, the president of Rwanda Mining Association, said.

“This is a long term sector and most investors look at the future. The new legislation will allow us to operate more professionally and profitably.”

Mining is the second largest export sector in Rwanda after agriculture, fetching US$228 million last year – from cassetirite, wolfram and coltan.

The sector employed at least 25,000 people by 2012, most of whom are artisanal or small scale miners.

The sector experienced its highest growth between 2008 and 2012, at 44 per cent per annum. However, this year, it has been heavily susceptible to price fluctuations on the international market.

Source: The New Times - Rwanda

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.