Increasing disruptions to power supply from South Africa’s struggling utility Eskom could hit mining companies plans to invest, two top industry executives warned on Wednesday.
“I think the impact of Eskom is far more pronounced than the impact of COVID, although COVID is getting all the attention,” Nico Muller, Chief Executive of Impala Platinum (Implats) said during a platinum group metals (PGM) conference.
He said power supply from Eskom would have a “material bearing” on future decisions on growth.
Eskom, which generates the majority of South Africa’s power, has for years struggled to manage supply from ageing coal-fired power plants and has imposed intermittent blackouts denting economic growth and hurting business sentiment.
The power utility said in February that there was an increased possibility of power cuts over the next 18 months.
Anglo American Platinum Chief Executive Natascha Viljoen, who was also among the speakers, said power supply was not the main driver for the company’s investment decisions but was determining investment appetite and preventing opportunities including base metal beneficiation, a process of value-addition to mined metals.
Mining in South Africa has been hit hard by the pandemic as lockdowns led to mine closures and miners contracted the disease, but a weaker local currency and higher metals prices cushioned the impact of reduced output.
“Water and power security play a vital role in our investment decisions,” said Muller.
Blackouts returned in August, worsening last week as Eskom ramped up cuts to 4,000 megawatts (MW) per day forcing up to almost 8 hours of power cut. The utility has since downgraded the outages to a lesser level.
The cash-strapped utility has sapped investor confidence, with heavy energy users such as miners and smelters unable to ensure security of power supply, forcing miners to seek permission to generate their own power.
President Cyril Ramaphosa has promised to ease regulatory curbs on “self-generation” after some mines shut down during the worst power outages on record in December_Reuters/mining.com
Australia’s Resolute Mining (ASX, LON: RSG) on Wednesday withdrew its production and costs guidance for 2020 after unionized workers at its Syama gold mine in Mali notified the company of a looming a 10-day strike.
The miner, which expected to churn out 430,000 ounces of gold at an all-in sustaining cost of $980 per ounce, said the union is threatening to down tools unless the company resumes full pay to employees affected by covid-19 measures.
RESOLUTE MINING EXPECTED TO CHURN OUT 430,000 OUNCES OF GOLD AT AN ALL-IN SUSTAINING COST OF $980 PER OUNCE
“Resolute has implemented a comprehensive, company-wide response to the coronavirus pandemic,” it said. “At Syama, a decision has been made to limit the travel of non-essential workers from outside the surrounding region to the mine site to limit the risk of transmission of the virus.”
The gold miner added it had informed the union the company considers the strike notice “irresponsible” and “opportunistic.” It also said the threat represented a breach of the commitments made in a workforce stability agreement for the mine.
Resolute Mining said it was considering how to respond to the strike notice, adding it intended to continue to seek the union’s understanding and support for appropriate actions.
The miner reported in August strong results for the first six months of the year, with revenue reaching $305 million from gold sales.
It also noted at the time that it didn’t expect Syama operations to be affected by the recent coup in Mali_Mining.com
Struggling Petra Diamonds, which put itself up for sale in June, is facing allegations of human rights abuses at its Williamson mine in Tanzania resulting from the actions of its security guards.
The South African company said on Wednesday that UK-based law firm Leigh Day had filed claims in the High Court of England on behalf of 32 anonymous individuals. The accusations against Petra and the mine operator Williamson Diamond Limited (WDL) include reports of personal injuries and deaths at the diamond mine, allegedly caused by security staff, it said.
The company has also received a letter from RAID, a UK-based NGO, regarding similar accusations from local residents and “others relating to actions by WDL, its security contractor and others linked to WDL.”
Petra said it took the allegations “extremely seriously” and is beginning an independent investigation through a specialist third party. WDL has already begun its own investigation, it noted.
“This illegal mining activity is managed by WDL and the local government authorities on an ongoing basis,” it said.
Petra has dealt with the incursion of illegal miners at its operations before. Last year, it opened up some of its Koffiefontein mine’s tailings, in South Africa, to small scale miners. The move aimed at tackling illegal activities and solved some issues caused by artisanal miners at the asset.
PETRA NOTED ITS WILLIAMSON MINE HAS BEEN THE TARGET OF ILLEGAL ARTISANAL MINERS “FOR SOME TIME”
It previously carried out a similar exercise at Kimberley, in Northern Cape, where small scale miners operated “the floors” of the property — an area previously worked by Kimberley’s founding miners.
That project, kicked off in 2017, was not a success. Its then joint venture partner, Ekapa Mining, reported a year later it was still spending R3 million (about $180,000) a month in security to keeping individual out of its operating boundaries. Petra sold its stake in the Ekapa partnership in 2018.
The diamond producer has been hit by a triple whammy of weak market conditions, power emergencies in the home country and the ongoing effects of covid-19.
Petra tried to turn around its fortunes after piling up debt to expand its flagship Cullinan mine in South Africa. The renowned mine, where the world’s largest-ever diamond was found in 1905, produces about a quarter of the world’s gem-quality diamonds. It is also the source of the vast majority of blue stones.
The company failed in May to make an interest payment on a $650 million bond, but won some breathing space from creditors who said they would not declare a default until August.
It also cancelled May and June tenders because of travel restrictions and low demand from the midstream.
Petra shuttered Williamson in April. The mine is 75% owned and 25% by the government of Tanzania.
Canada’s Ivanhoe Mines published on Tuesday the results of an independent definitive feasibility study (DFS) for its Kakula project in the Democratic Republic of Congo, which confirms the asset could become the world’s second-largest copper mining complex.
Kakula, the first underground mine planned at the Kamoa-Kakula concession, is forecast to generate 6 million tonnes of ore a year at an average feed grade of 6.6% copper over the first five years of operation, the study shows.
IVANHOE SAID THE DOCUMENT IS AN INDEPENDENT VERIFICATION BY NINE OF THE WORLD’S TOP ENGINEERING FIRMS OF KAKULA’S ROBUST ECONOMICS
Ivanhoe said the document is an independent verification by nine of the world’s top engineering firms of Kakula’s robust economics.
“The definitive feasibility study also confirms what we’ve been telling investors for the past year and a half, and showcasing monthly in our progress galleries – the Kakula mine is being rapidly built, it is ahead of schedule, and is on budget,” Ivanhoe’s co-chairperson Robert Friedland said in the statement.
Kakula, which is expected to begin production in less than a year, will also have top-ranking “green” credentials, according to Friedland.
“The mine has been designed to produce the world’s most environmentally-responsible copper, which is crucial for today’s new generation of environmentally- and socially-focused investors,” he said.
Phased development
The Vancouver-based company also issued a prefeasibility study for extracting 1.6-million tonnes of copper a year from the Kansoko mine to “take full advantage of an expanded plant capacity of 7.6-million tonnes a year at Kakula.”
Ivanhoe reiterated that the Kamoa-Kakula project, being developed in partnership with China’s Zijin Mining Group, will advance in stages until having four producing mines with a combined 19 million-tonne per year output rate.
Peak annual copper production from Kakula, Kansoko, Kakula West, and Kamoa North is expected to surpass 800,000 tonnes, the company said.
DFS EVALUATES DEVELOPMENT OF A STAGE ONE, 6-MTPA UNDERGROUND MINE AND SURFACE PROCESSING COMPLEX AT THE KAKULA DEPOSIT WITH A CAPACITY OF 7.6 MTPA, BUILT IN TWO MODULES OF 3.8 MTPA
Friedland, who made his fortune from the Voisey’s Bay nickel project in Canada in the 1990s, has been working on Kamoa-Kakula for ten years.
Last month, the company struck a strategic partnership with China Nonferrous Metal Mining (CNMC) to explore opportunities, including exploration and smelting, in Africa.
In January, CNMC opened Congo’s first large-scale copper smelter, the Lualaba Copper Smelter, 45km from the Kamoa-Kakula copper joint venture in the country’s southern Copperbelt.
Kamoa-Kakula is a strategic partnership between Ivanhoe Mines (39.6%), Zijin Mining Group (39.6%), Crystal River Global Limited (0.8%), and the DRC government (20%).
Ivanhoe is exploring for new copper discoveries on its wholly-owned Western Foreland exploration licenses, adjacent to the Kamoa-Kakula mining license.
The company is also advancing the Platreef palladium-platinum-nickel-copper-gold-rhodium discovery in South Africa and upgrading its historic Kipushi zinc-copper-silver-lead-germanium mine, also in the DRC_Mining.com
Tesla Inc. is backing a new initiative to support informal cobalt miners in the Democratic Republic of Congo as carmakers and miners seek to reassure customers about ethically mined supplies of the battery metal.
The company joined the fledgling Fair Cobalt Alliance, according to an updated list of members on the group’s website. The FCA aims to end the use of child labor at mining sites and improve working conditions in Congo. It’s also backed by miner and trader Glencore Plc and major Chinese cobalt refiner Zhejiang Huayou Cobalt Co.
THE FCA AIMS TO END THE USE OF CHILD LABOR AT MINING SITES AND IMPROVE WORKING CONDITIONS IN CONGO
Almost three-quarters of the world’s cobalt comes from Congo and demand is forecast to surge in the coming years. However, artisanal cobalt, produced by small-scale miners who often dig by hand, has become a divisive issue. Groups such as the Organisation for Economic Co-operation and Development
ch sites and production from the country’s artisanal mines often gets mixed in with industrial output.
Before joining the group, Glencore had long argued that customers were better served by buying from its mines, where safety and environmental standards were followed. Still, the informal industry creates tens of thousands of jobs, exploiting small deposits that would be uneconomical for large miners, and groups such as the OECD have said companies should engage with the sector to encourage improvements.
Tesla earlier this year struck a deal with Glencore to buy cobalt from its Congo mines. The company has also been seeking to reduce its reliance on the metal — while there’s enough cobalt supply for now, demand is expected to surge in the coming years as Tesla expands in China and Europe and Volkswagen AG to BMW AG roll out fleets of electric vehicles.
Tesla did not respond to an email seeking comment.
POLICE have arrested 21 illegal gold panners who had invaded the pristine mountains of the Chimanimani National Park in Manicaland province.
The mountains are located along the Zimbabwe/Mozambique border.
Police national spokesperson Assistant Commissioner Paul Nyathi confirmed the arrests.
He said during the raid, police were also able to recover various blends of liquor and dagga from illegal tuck-shops operating close to the national park.
“21 people were arrested by police in Chimanimani National Park after they illegally entered the park to pan for gold,” said Nyathi.
“Various blends of liquor and dagga were also recovered from illegal tuck-shops near the National Park.”
Hundreds of illegal gold panners invaded Chimanimani National Park last month, on the back of the Covid-19 lockdown and worsening economic conditions. However, their presence threatens a pristine mountain ecosystem that is home to rare wildlife.
The panners have cut down trees, strewn litter, polluted a major river and violated ancient rock art with graffiti.
The popular tourist Chimanimani district is known for having the longest range of mountains in Africa and is home to more than 90 endemic plant species.
Recently, there was an outcry from Chimanimani Tourist Association (CTA) that the panners gold miners in the area were using prohibited lethal chemicals such as mercury in search of the precious mineral resulting in local water sources being contaminated thereby putting the lives of villagers, livestock, and flora and fauna at risk.
Egypt has begun talks over plans to sell electricity to Europe and Africa, pressing its advantage as a producer of cheap renewable energy in a bid to become a regional export hub, the head of its sovereign wealth fund said.
The nation, which has a surplus of electricity, sees unspecified “power-hungry” countries to the north as possible customers, according to chief executive officer Ayman Soliman. Egypt could supply Europe via a planned sub-sea cable to Cyprus and Greece.
“We are in talks with European infrastructure investors, advisers and energy traders to assess the viability and appetite,” Soliman said in an interview in Cairo. The transmission line “will position Egypt as a long-term renewable supply hub for Europe.”
Electricity exports could be a lucrative earner for Egypt, which is already becoming a natural-gas hub after offshore discoveries. The North African nation, which has capacity of about 50 gigawatts — a fifth of that excess — has long-used gas-fired plants and hydropower and is boosting use of other sources. Around 8.6% of the country’s power comes from renewables, and it’s targeting 20% by 2022 and more than doubling that by 2035.
Egypt’s capacity has been bolstered in recent years by three power plants co-built by Siemens, a $4 billion solar park in the south, Benban — one of the world’s biggest — and a wind farm. The country signed a $30 billion deal with Russia in 2017 to build North Africa’s first nuclear power plant, with capacity of 4.8 gigawatts.
The surplus marks a turnaround from 2013, when Egypt struggled to meet demand for electricity from its rapidly growing population, the largest in the Arab world. Chronic outages helped stoke anger against Islamist President Mohamed Mursi’s government, culminating in his ouster during a military-backed popular uprising.
Both sides
The fund has an agreement with the Electricity Ministry to engage investors for its export plans. Already connected to Libya and Jordan, Egypt is also seeking to supply emerging economies on its side of the Mediterranean, according to Soliman.
“We are identifying the relevant players in Africa to partner or work with and we are in talks with some sovereign funds,” the CEO said. He declined to specify countries or institutions, saying only they spanned the continent.
Egypt signed an initial agreement on the EuroAfrica Interconnector with Cyprus and Greece last year. The fund is in contact with energy traders “to find counterparts who can invest alongside the fund and develop the transmission line,” and is also holding initial talks with some local and international infrastructure investors, Soliman said.
The first stage of the Egypt-Cyprus-Greece line is estimated to cost 2.5 billion euros ($3 billion) and scheduled for commissioning by December 2023, with initial transmission capacity of 1 000 megawatts, according to EuroAfrica’s website.
Egypt will benefit from the low cost of power production, especially for solar, according to Soliman. A profitable selling price for power from Benban is 2.4 cents per kilowatt-hour, compared to the average price paid per European household of 23 US cents per KWh, he said.
In the industrial sector, he cited a profitable selling price for Egypt of about 9 cents per KWh versus as much as 15.4 cents in nations like Germany and Italy.
“We have a competitive sustainable advantage in exporting electricity to Europe, the Middle East and Africa,” Soliman said. “We are keen to tap industrial economies that are power-hungry and environmentally conscious”. – Bloomberg
Founder and Leader of Prophetic, Healing and Deliverance (PHD) Ministries Walter Magaya has yet again tangled himself in another small-scale mining-related controversy.
Through his company Yadah Connect, Magaya reportedly took mining equipment worth over USD 30 000 early this year on credit from reputable small-scale miners’ equipment supplier Matabeleland Engineering which he’s reportedly dodging.
According to the company, Magaya could have paid his debt in full by June this year. The company approached him with yet another a payment plan which he failed to honour citing lockdown challenges. They then extended payment dates which were supposed to be paid by 28 August, Magaya could not pay again.
The company has therefore resorted to giving Magaya a 7-day ultimatum in which they threatened to take him to the courts of law if he fails to pay for the balance.
“Please be advised that unless we receive payment in full on this account within seven working days from the date of service of this letter, we will immediately turn this account over to our attorneys for collection proceedings against you without further notice.
“The proceeding will include legal court and court-related costs in connection with the collection of this past due to account and will substantially increase the amount that you owe us.
“Collection proceeding also have an adverse effect on your credit rating.” reads the letter in part.
The controversial prophet reportedly ignores all forms of communication from the supplier.
Efforts to reach Magaya by this publication where fruitless and messages went unanswered.
Matabeleland Engineering which trades as YAGDEN is a reputable small-scale miners equipment supplier that gives equipment to miners on credit through a payment plan.
The failure by Magaya to pay the supplier its dues has prompted fears that the company will cut its interest in providing equipment to miners on credit.
The company has worked with several Certificate holding small scale miners by supplying equipment on credit through a payment plan.
It shouldn’t have taken pressure from conservationists for the Zimbabwe government to ban mineral prospecting in the country’s largest game reserve. It should just be the law.
Last week, the Bhejane Trust, which works with Zimbabwe’s National Parks and Wildlife Management Authority in conservation in the Hwange area, said two concessions given to Afrochine Energy and the Zimbabwe Zhongxin Coal Mining Group are located inside park and safari areas. Bhejane made this discovery after its monitoring teams intercepted the two companies’ workers conducting exploratory core drilling in the area.
On Tuesday, after a week of outrage and the #SaveHwangeNationalPark hashtag trending on Twitter, Cabinet finally did what it should have done all along.
“Mining on areas held by national parks is banned with immediate effect. Steps are being undertaken to immediately cancel all mining titles held in National Parks,” Information Minister Monica Mutsvangwa announced after Cabinet.
Government also banned riverbed mining, save for desiltation on the Save and Angwa rivers.
This is good news. But this is also the problem; there is a major problem with how mining and the environment are regulated.
It is great that the government has banned any mining in game parks, but there is nothing in our mining laws that makes it as expressly illegal as it should be.
The Mines and Minerals Amendment Bill, for example, says: “In deciding whether or not to grant a mineral right or title, the Cadastre Registrar shall take into account the need to conserve the natural resources in or on the land over which the mineral right or title is.”
In other words, it is left to officials to decide.
Two-faced laws
The law itself is two-faced. Six years ago, the government gazetted Statutory Instrument 92 of 2014, which banned mining on riverbeds, riverbanks, wetlands, and on any area within 200 metres of riverbanks.
But there was a caveat; you could still mine on the river if you did it in partnership with the government.
Last year, the government licensed 11 companies to enter into joint ventures with state-owned miner ZMDC to mine gold on rivers.
Cabinet’s announcement on Monday was not clear on whether this now also falls away. There’s also no news on whether licences granted to ZCDC and ZMDC to mine on the Gache-Gache River will now be withdrawn.
And that just shows where the problem lies. If the government is serious about protecting the environment, it must change the laws, and not just make press statements.
Nature vs Mining: Makomo Resources in Hwange had to forgo 6000t of coal to preserve an ancient baobab tree. Conservationists say new coal projects place nature at risk (pic: Kelsey Wood)
Nature vs Mining
Zimbabwe has a power deficit. Two new coal-fired units at Hwange power station are being built, adding 600MW of power when they are done. They will need to be fed. The country has estimated coal reserves of 12 billion tonnes, according to data from the Ministry of Mines, and is escalating its search for investment to exploit coal.
So, the temptation to search for minerals is strong. But a balance is needed. Zimbabwe is not the first country in the region to face the dilemma between tourism and mining.
Just last year, Zambia had to reverse a plan by Australia’s Mwembeshi Resources to build a massive copper plant in the Lower Zambezi National Park. In Mozambique, the 350 000-hectare Magoe Park is an oasis surrounded by coal mines. Some estimate that up to 60% of the land in the northern Tete province is held by coal mines.
Tanzania has downsized Selous Game Reserve by 60% – a total of 31,000 square kilometers – to make way for uranium mining. In South Africa, about two-dozen prospecting licences have been granted to coal prospectors on the rim of the Mapungubwe National Park, a UNESCO heritage site. The miners want access to a rich coal seam that runs from Zimbabwe and through the park.
In Botswana, the country has allowed energy companies such as Sasol to explore for natural gas in the Central Kalahari, Kgalagadi, and Chobe parks using the controversial “fracking” drilling method.
So, Zimbabwe’s government will find this dilemma is nothing new. It’s not a new debate. It’s how governments respond that matters.
Do the right thing
Instead of waiting for outrage, the government, if sincere, would have been proactive in how it manages natural resources.
Firstly, mining should not even be an idea in ecologically sensitive areas. This means no exploration should even take place there. Secondly, mining laws should be harmonised with those governing tourism, the environment, and water resources.
Across the country, riverbeds are being overrun by gold panners, many working for political elites. School grounds have been destroyed, and even a highway at the famous Boterekwa in Shurugwi was damaged recently.
All this is evidence of a ruling elite unable to curb personal greed and protect the environment.
By banning mining in game parks, the government has responded to public pressure. But that’s nowhere near enough. We need this made clear in the laws so that those who damage the environment are legally accountable.
Without that, this will look like yet another case of a government not really interested in preserving our resources, but one just embarrassed at being caught.
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