Modern Mining December 2017

COMMENT

Is 2018 likely to be a better year for Africa’s miners?

W ith 2017 drawing to a close as I write this, I have to say that the year was generally not a great one for mining in Africa – West Africa apart. Things in South Africa have gone from bad to worse with all the issues surrounding the proposed new Mining Charter unresolved, while Zambia, Namibia, Botswana, Zimbabwe and the DRC have all been quiet in terms of mining activity. In Zimbabwe the 51 % indi- genisation rule continued to deter new mining investment and in Tanzania radical and arbi- trary changes to mining legislation that were imposed mid-year have not exactly been posi- tive for the country’s mining sector. The situation in South Africa is particularly dire and there have been endless prognos- tications of doom over the past 12 months, with many industry leaders predicting that the industry will shrink further in the years to come unless urgent measures are taken to improve the regulatory climate in the country. Anglo American Chief Executive Mark Cutifani, for example, stated categorically in late November (at an Anglo American media function) that, in the absence of change, a fur- ther 100 000 jobs in mining would be lost in the next five to seven years. He said South Africa had to rebuild the industry and added that the country would not get any inward investment in mining “unless we can deliver a return.” What of prospects for 2018? Looking at South Africa, there are some biggish projects around. South32 has approved its R4,3 bil- lion Klipspruit Life Extension project at South Africa Energy Coal, Ivanhoe is working at full tilt on its Platreef mine near Mokopane, with Shaft 1 having passed the 500 m mark and early-works construction for the giant Shaft 2 underway, Exxaro has started work on its R3 billion plus Belfast coal project and SepFluor has begun development of its R1,7 billion Nokeng fluorspar mine. Other projects in progress include Gamsberg (which will start producing in mid-2018), Exxaro’s R4,7 billion GG6 project at Grootegeluk and Northam’s plus R4 billion Booysendal South expansion, which is now well into the construction phase. On the horizon is the Waterberg PGE project north of Mokopane, in which Impala is now involved. There are now no less than 17 drill rigs on site, which indi- cates the serious intent of the developers. Outside of South Africa, the change of lead- ership in Zimbabwe could lead to some sort of mining boom in the country (one hears that the

mining community in the country is in a buoy- ant mood) while in Zambia Vedanta Resources, which controls Konkola Copper Mines, is reportedly investing an additional US$1 billion in its operations in the country. Over the border in the DRC, Ivanhoe – what would we do without this company? – is pur- suing the Kamoa/Kakula and Kipushi projects, with Kamoa and Kakula both in construction (at least in terms of the mining infrastructure) and a new PEA on the combined projects hav- ing just been released. New investment is also on the way from Katanga Mining, which has just announced the approval of US$237 mil- lion in capital expenditure spread over 2018 and 2019 to construct a sulphuric acid and sul- phur dioxide production plant at its subsidiary Kamoto Copper Company (KCC) in Kolwezi. Further north in the country in North Kivu province Alphamin is moving into top gear with its Bisie tin mine. I can’t see too much in the pipeline in the immediate future in Tanzania but in Mozambique Battery Minerals is planning to be in production with its US$42,3 million Montepuez graphite project by the end of 2018. Also in Mozambique, the Savannah/Rio Tinto joint venture is continuing to make good progress on the Mutamba mineral sands proj- ect, which ultimately could represent a major investment in the country. On the other side of the continent in West Africa levels of activity should remain high, with Endeavour having started development of its big US$400 million Ity CIL project in Côte d’Ivoire, Perseus building Sissingué (the first gold pour is expected in March 2018), also in Côte d’Ivoire, Newmont busy with its Ahafo mill expansion in Ghana and Roxgold about to embark on the Bagassi South expansion at its Yaramoko site in Mali. There are, of course, any number of projects in the West African region (mostly gold) at an advanced stage, including – to name just three of the most significant – Yaoure (Perseus) in Côte d’Ivoire, Massawa (Randgold) in Senegal and Kalana (Endeavour) in Mali. Most of them are unlikely to go into execution until at least 2019 but it’s good to know they’re in the pipeline. Summing up, one feels that there is probably enough going on in Africa in mining to make 2018 a reasonably active, if not a boom, year. Let’s hope this is the case. The mining industry has taken some hard knocks over the past two or three years and now desperately needs some good news and a period of sustained growth. Arthur Tassell

The situation in South Africa is particularly dire and there have been endless prognostications of doom over the past 12 months.

December 2017  MODERN MINING  3