Category archives for: Mining

Ethiopia: Nationwide Socio-Economic Implications of Aluminum Exporting

By Robel Yohannes

Very recently, an Ethiopian aluminum company, B&C Aluminum PLC, has started exporting aluminum products to Egypt. And in light with that, this article will probe around the implications of this in terms of the metals and engineering sector’s role in saving foreign currency for the country through import substitution, in interlinking with the micro and small enterprises, and the government’s role in supporting the industry.

Industrial development has an important role in the economic growth of countries through creating massive employment opportunities for citizens. and lessening the burden of poverty.

In light of this fact, hence the metals and engineering sector is one of the single most important sub-sectors of the manufacturing sector and the key driver for rapid economic growth.

Ethiopia is currently experiencing a rapid economic growth, which is primarily driven by its infrastructure investment, development. And in such economic growth, aluminum consumption is expected to pick up growth. So, it is important for the local economy to produce the needed level of aluminum to feed the economy. But, it is not only about that.

In Ethiopia, the metals and engineering sector is not only one of the most vital sub-sector in the industry sector, but the sector is earmarked by the government to substitute imports and save foreign currency.

Regarding the plan to develop the country’s metals and engineering sector, the government’s aim and goal is to support the sector by supporting the capacity building and market linkage of the sector, and the effort of the local investors involved in the sector.

Given how important aluminum is as a product to an economy, whether it is being used in transportation vehicles, packaging, construction, household use and so on, it is paramount for a developing economy like Ethiopia to be able to manufacture it locally and substitute foreign imports in the process.

As Industry State Minister Alemu Sime (PhD) said in relation to the commencement of aluminum export by B&C Aluminum PLC to Egypt, the metals and engineering sector is expected not only to deliver economic output by saving foreign currency, but also by substituting the importation of similar products into the country.

Foreign currency is vital for developing countries as its pivotal in reducing poverty and enhancing productive activities of a country, either directly or indirectly. Of these implications, Alemu said that as the country’s foreign currency demand is increasing hugely due to its rapid economic growth, it would be important for every sector to generate foreign currency by exporting their products to foreign market.

According to Haimanot Abate, Chief Executive Officer of B&C, the Company has 30 to 40 percent share in the local aluminum market, and in that regard, he added, “the Company is also helping the country to save significant amount of foreign currency, which the nation would have spent to import aluminum products.”

Not only that. He further pointed out that the Company contributes hugely in terms of supporting the construction sector, and given the fact that its production method involves recycling, it also creates economic value.

Furthermore, the State Minister mentioned how exporting aluminum products will help improve the productivity and competitiveness of the aluminum, and by extension, the metals and engineering sector of the country. He said: “exporting our aluminum products to foreign market will enable the country to see and assess where it is in terms of the international quality standard, the international market demand for aluminum, and the sector’s overall competitiveness.”

Also, it creates the environment where the local investors involved in the sector enrich their experience by being an active protagonist in the international market, and thereby increase its products and productivity.

The recycling manner of its production in terms of creating economic value

The manner in which the B&C Company produce its outputs, and creates economic value through the inter-linkage it has established with micro and small enterprises and the government is one of the economic benefits that it provides to the country.

In this regard, Haimanot mentioned the linkage they have with various small and micro enterprises, and the government’s support has bore fruit to the consumers.

The Company uses recycling process to manufacture its aluminum outputs, by utilizing scrap aluminum material and reusing it after its initial use.

This process enables the Company to produce in a far less expensive and energy-intensive manner – after all, according to various experts of the field, “Recycling scrap aluminum requires only 5% of the energy used to make new aluminum”.

And this is where the inter-linkage with small and micro enterprises and the government occurs.

Haimanot says that various small and micro enterprises are involved in bringing the scrap material to the assembly of the Company, and in segregating out the wire out of the scrap material, since many part of the scrap material comes from the electric company. According to him, many women that are involved in small and micro enterprises segregate the wire out because the output has to be 99 percent pure aluminum.

In this way, the Company and the recycling manner of its production creates a link with the local micro and small enterprises to create an economic value and chain. And such linkage between domestic industrial companies and local small and micro enterprises is pivotal in the context of socio-economic development and investment for development.

In Ethiopia’s case, small and micro enterprises holds paramount role in the economic sector. So, creating linkage between the country’s industry sector and small enterprises is of great developmental importance. Such beneficial inter-linkage can maximize the social and economic benefit of the country.

The linkage between the company and the government is also one of the avenues that is maximizing the benefit for the public. According to him, the Company purchases the government’s scrap aluminum material it would otherwise dump.

Haimanot further said that with a view that the industries will use scrap as raw materials and create value out of it, the government is supplying the scrap it has on its hand as per the demands of each sector. The government is deposing its unwanted materials in this line of thinking [creating value out of its unwanted material by helping it be recycled by the industry sector], he added.

According to the owner and Manager of the Company, Biruk, such economic relationship with the government brings huge economic dividends to the country. “We purchase the scrap the government would have otherwise dumped, and create economic value that would benefit the consumers.” And this has other additional beneficial implications for the country.

Biruk calculates that they have helped the government save up to 300 million ETB from the 40/60 Condominium Housing Project, which they are involved in the ‘Crown’ and ‘Senga Tera’ sites. Not only that; he said that they have helped lessen the price pressure that would have came otherwise by selling their product at a reasonable price, because they can afford to do so as the goods are not imported but rather produced here.

While the Company plans to boost up its local market share and export portfolio by exporting as far as Europe in the future, it is expected that it would help the country expand the benefits it gets from this sector in the process. According to Biruk, a local company starting to export aluminum products to countries like Egypt with century old extrusion industry should encourage the rest of Ethiopian industrialists that they can do it as well as long as they are committed, enthusiastic and willing to work hard.

In general, the heart of the article is twofold in that a local private company involved in the metals and engineering sector starting exporting will deliver economic output in terms of saving foreign currency by substituting imports, and in satisfying the local demand for aluminum. The start of export will also help the Company elevate its competitiveness and productivity, driven by the competition of the international market. Furthermore, the recycling manner of the Company’s production process has opened a linkage with local micro and small enterprises and with the government that helped maximize the socio-economic benefit for the general public.

The linkage is a show that if other local companies in other projects are able to take in the raw material locally and import cheap technologies, it is possible to benefit the consumer/public in terms of making prices fair as they would help the government save or lessen its hard currency expenditure, and thereby the country’s inflation rate.

South Africa: Ekapa Minerals Abandons Part of Its Case Against Illegal Miners

By Safura Abdool Karim

Ekapa Minerals has abandoned part of its interdict against Zama Zama miners, calling into question the validity of the entire interdict, writes Safura Abdool Karim

On 14 September Ekapa Minerals filed a notice which abandoned parts of its interdict against Zama Zama miners in Kimberley. The miners had appealed in the Constitutional Court against the interdict, which prevents them from entering and mining on certain property belonging to Ekapa. As part of their application, they found evidence which showed that Ekapa was not legally entitled to interdict some of the property.

The case began in 2015, when De Beers began selling off mine dumps to various companies including Ekapa. Zama Zama informal miners had been mining the dumps before the sale.

Although Ekapa had not yet acquired ownership of the dumps, it applied for an interdict to prevent the miners from entering the dumps and from removing or excavating material. The Zama Zamas, represented by Spoor Inc, challenged the validity of the interdict, but it was confirmed by the High Court in Kimberley. Then the Zama Zamas unsuccessfully applied to appeal in both the High Court and Supreme Court of Appeal. Both courts dismissed the application.

On 3 August 2017, the Zama Zamas filed an application for leave to appeal in the Constitutional Court. A few weeks later, they filed a further application and affidavit, requesting that the Constitutional Court allow them to introduce an affidavit from De Beers that was filed in another matter.

The affidavit revealed that some of the land Ekapa tried to interdict the Zama Zamas from entering was in fact land that had not been sold to them by De Beers. The affidavit involves two pieces of land referred to as Dorsfontein 77 and Kenilworth 71.

In their papers, Ekapa had claimed that the ‘remaining extent’ of both these properties was to be transferred to them. A ‘remaining extent’ is a technical legal term reflected on a title deed. The High Court then confirmed Ekapa’s interdict over both properties, on the basis that ownership of both properties was going to be transferred to Ekapa.

But De Beers’ own application for an interdict against the Zama Zamas showed that the portions of both properties will remain the property of De Beers and will not be transferred to Ekapa. This means that Ekapa obtained an interdict over land that does not belong to it.

Ekapa then decided to abandon the interdict over the farms Dorsfontein 77 and Kenilworth 71. This represents a victory for the Zama Zamas and may bolster their efforts to have the appeal heard by the Constitutional Court.

The fact that portions of the interdict are now legally questionable may throw the entire interdict into contention, making the outcome of the appeal more complicated. This complexity may provide grounds for the Constitutional Court to find that the Zama Zamas’ prospects of success are better than when the case was brought before the Supreme Court of Appeal.

This is just the latest instalment of an ongoing battle between informal miners in the region and Ekapa. Meanwhile, Ekapa has been back in court with an urgent application to have the portions of the interdict that have not been abandoned enforced against the Zama Zamas.

South Africa

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Tanzania: Villagers Appeal for Closure of Gold Mine

By By Paul Mabeja

Residents of Nholi Village in Bahi District have asked President John Magufuli to close down a gold mine in the area because it was being operated in contravention of the laid down procedures.

The villagers also claim that the operators of the mines were paying nothing to the government, for they were not recognised by the village authority.

The request was made by the residents earlier in the week during a public meeting held at the village to deliberate on the mining activities that had started without involvement of the village government.

Speaking over the complaints on behalf of the government, the Village Executive Officer, Mr Augustino Apolinary, said there was already a team formed to correct the system used currently so that the village can benefit. “A team was formed to come and see how best the mine could be operated, but the issue of Std Seven exams disrupted the arrival of team and I don’t know when it will come,” said Mr Apolinary.

One of the residents, Mr Michael Mkontya, appealed to the government to make interventions to ensure that the miners stopped operations until the current procedure is changed.

Besides, Mr Mkontya added that he and fellow residents were not benefiting from the mine run by people, who claimed to have been issued with a licence to carry out mining activities in the area.

Another resident, Mr Hamisi Lenguji, said they made a follow up on the matter at different places including going to the Regional Commissioner with their chairperson, but, they ended up being threatened that the mine was owned by an influential person.

“So, if this mine is owned by an influential person, we ask for the audience with President Magufuli so that he can help us. This is because we are tired of receiving jail threats. We even went to meet the RC, who promised to come and help settle the matter.

“However, we have not seen him as we are still being hurt and our precious mineral is still being mined,” said Mr Lenguji.


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Uganda: Uganda to Host Mineral Conference

By Ali Twaha

About 450 mineral experts across the globe are expected to attend the sixth annual Mineral Wealth Conference (MWC) slated for October 4 – 5, 2017 at Kampala Serena hotel.

The conference, organised by the Uganda Chamber of Mines and Petroleum (UCMP), will be graced by President Museveni.

It is organized in partnership with the ministry of Energy and Mineral Development and this year’s conference will be held under the theme ‘Minerals – knocking on the door to cause economic transformation in Uganda.’

Uganda enjoys a wealth of mineral deposits including gold, copper, vermiculite, graphite, iron, graphite, limestone and phosphates, among others.

However, they have not been fully exploited mainly because extensive exploration countrywide has not happened yet. In 2015, a Uganda Bureau of Statistics (Ubos) report noted a 6.3 per cent increase in the value of selected minerals produced, growing from Shs 158 billion in 2013 to Shs 168 billion in 2014.

These numbers though, are significantly low. Industry watchers, for instance, believe the right support can see Uganda easily become the world’s leading vermiculite producer within the next five to 10 years.

With the mining policy and laws undergoing a review to match the private sector needs, stakeholders are optimistic that this potential will soon be realised.

The annual MWC is East Africa’s flagship mining convention; playing a significant role in highlighting the huge untapped mining potential of Uganda and the region.

Robert Kasande, the new permanent secretary, ministry of Energy and Mineral Development, has been lined up to be among the speakers along with Dr Fred Kabagambe-Kaliisa, a senior presidential advisor on oil, gas and minerals.


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South Africa: Rockfall Kills Two Miners

Photo: Impala Platinum Mine

(file photo).

Two miners died when a rock fell on their heads while drilling in shaft 12 of Impala Platinum’s Rustenburg mine on Tuesday morning, the mine said.

The two men, aged 31 and 34, died at the scene, Impala Platinum spokesperson Johan Theron told News24.

He said the rock fall did not threaten the lives of any other miners.

“We are presently launching a full investigation into the circumstances of the incident. The safety of our employees enjoys priority.”

Theron said the mining group is assisting the family of the deceased miners as far as possible.

Mineral Resources minister Mosebenzi Zwane said the ministry will be conducting an investigation into the cause of the accident.

“We are extremely concerned … with these incidents which continue to claim the lives of workers in the mines. We have a duty and legislative obligation to investigate these incidents with a view to ensuring that as far as possible we prevent them,” Zwane said in a statement.


South Africa

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Tanzania: MP Wants Mining Company to Pay District U.S.$190 Million

Photo: Daily Monitor

Member of Parliament for Msalala, Ezekiel Maige

By By Mnaku Mbani

Member of Parliament for Msalala, Ezekiel Maige (CCM) wants the Bulyanhulu Gold Mine to pay Msalala District Council a total of Sh425 billion in unpaid service levy.

Speaking to the Citizen in a telephone interview on Tueday, September 19, Mr Maige said the amount is in accordance with the estimates made by the Presidential Committee on minerals, headed by Prof Nehemiah Osoro.

“The company started to pay the service levy in 2015 using an old formula of $200,000 flat rate per year instead of 0.3 per cent of the gross revenue of the company,” he said.

He said the recent report which indicates that Acacia paid $11 million to Msalala District Council was not true. He said he was not aware when the amount was paid.

The former minister for Tourism said since the company started its operation in 1998, the economic dividends gained from mining activities were not equivalent of what was harvested.

“My people are among of the victims of bad investment policies that have been implemented in Tanzania over the last two decades,” he said.

Mr Maige is in the view that the existence of the gold mine at the district has not benefited the people as many of them were evicted from their areas without proper compensation.

It is estimated that about 200,000 people were removed from the current Bulyanhulu Mine site in 1998 without compensation.

He said seven in ten people in Msalala District were happy by the decision of the government to revisit gold business transactions in Tanzania and only three out of ten are unhappy with the decision.

He said even employment at the mining areas did not consider local residents and all of their goods and services needs were outsourced outside the district.


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Namibia: Mining Sector Contributed Billions in 2016

By Eveline De Klerk

Swakopmund — The Namibian mining sector contributed N$3.2 billion in corporate taxes and royalties to government in 2016. The figure excludes the Pay-As-You-Earn Tax (PAYE) and Value Added Tax (VAT).

This was said by Deputy Minister of Mines and Energy Kornelia Shilunga at the official opening in Swakopmund last week of the Uranium International Conference organised by the Southern African Institute of Mining and Metallurgy (SAIMM). Shilunga said the mining sector – despite continuous low uranium prices – contributed about N$161 million in royalties, whilst N$1 billion was paid in wages and salaries in fiscal year 2016. Also, N$25 million was contributed toward social responsibility projects.

“Thus mining, especially uranium mining activities, significantly contributs to the development agenda of the government as expressed in our guiding tools, Vision 2030, the National Development Plan, as well as the Harambee Prosperity plan,” he said.

“Namibia also benefits greatly from the N$2.8 billion sulphuric acid plant at Dundee Precious Metals smelter at Tsumeb. The mines require huge volumes of sulphuric acid, which is being transported via rail… which in turn means less reliance on imports, and more job opportunities,” she explained.

Shilunga went on to say government recognised that presently the uranium market was depressed with serious implications for uranium mines, as public opinion had turned strongly against nuclear power generation, especially after the Fukushima event in Japan in 2011.

“However, great strides are being made in the generation of electrical power generation through alternative technologies, such as nuclear energy,” she said.

The deputy minister added that countries, such as China, have clearly chosen the nuclear power option. China has embarked upon a major building programme of nuclear stations. “This will eventually impact uranium prices in a way that will not only benefit our uranium industry” but the whole country, she said.


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Zimbabwe: Mining Giant Revenue 16% Up

Mining giant, RioZim is expecting to profitably utilize its chrome assets following government’s decision to lift ban chrome exports with the company now resuscitating its various projects in the country.

In its half year ending 30 June 2017 financial results, RioZim realised a 16% growth in revenue from US$32.6 million in the comparative period last year to US$37.8 million in 2017.

According to group chairperson, Lovemore Chihota, the growth was achieved notwithstanding the incessant rains, power outages and flooding experienced in the first quarter of 2017.

“Operationally, the incessant rains that were experienced in the first quarter affected mining operations nationwide including our own operations.

“These rains were also accompanied by frequent power outages and pit flooding and therefore created an environment that hampered mining activities. This was coupled with equipment challenges at the newly commissioned Cam & Motor plant in some critical sections of the new plant,” noted Chihota.

RioZim’s growth was largely as a result of the acquisition of Dalny Mine which was concluded in the second quarter and the commissioning of Cam & Motor Mine.

“I am also pleased to advise that during this period, Murowa Diamonds reverted to profitability and contributed a share of profit in the sum of US$583 thousand, compared to the share of loss from associate of US$199 thousand recorded in the comparative 2016 period,” said Chihota.

The Group recorded a profit before tax of US$2.9 million against a loss before tax of US$403 000 recorded in the same period last year.

According to Chihota, global economic trends remained subdued with the gold price going up by a marginal 1.4% from an average price of US$ 1 221/oz in 2016 to US$ 1 238/oz in 2017.

“Gold prices also remained volatile as a result of global geopolitical uncertainties. Base metal prices on the other hand remained flat throughout the reporting period.


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Lesotho: Duo Jailed Over Illegal Diamonds

By Nthatuoa Koeshe

Two men who were found in illegal possession of diamonds will spend six years in jail after failing to pay the alternative fine.

Ntemekoane Chapa (27) who resides at Ha Tsautse in Maseru and 26 year old Nthule Lets’olo who resides in Ha Nyenye in Maputsoe, were both found guilty by the Maseru Magistrates Court on 1 September for illegally trading in diamonds.

They were each sentenced to 15 years imprisonment with an option of paying a M10 000 fine each.

The court further suspended part of the sentence, leaving them with the option of paying M2000 each or facing six years in prison. They however, failed to pay the fine.

Police Spokesperson, Inspector Mpiti Mopeli, said the two were caught fighting over the diamonds by the Ha-Hohlo community in Maseru on August 28 2017 at about 3pm.

“The community of Ha-Hohlo tried to intervene in this fight and that was when they realised that the men were fighting over illegal diamonds,” Inspector Mopeli said adding that the community then reported the duo to the police.

The police found two diamonds in their possession, one a rough 11.33 carat diamond worth M41 991 and the other a polished 2.87 carat diamond worth M 120 558.

The accused told the police that they bought the diamonds from a man who obtained them at Kao Mine. The diamonds were retained by the court.


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Botswana: Govt Seeks Option to Buy Unusually Big Diamonds From Its Mines

Photo: Lucara


Botswana is amending its law to give the government the first option to buy diamonds that are unusually large or have other unusual features found in its mines, such as the world’s second-biggest 1,109 carat diamond discovered two years ago.

The cornerstone of Botswana’s success has been one commodity, diamonds, coupled with a rigid adherence to prudent use of revenues, a rarity on a continent where natural riches are routinely squandered or stolen, or the cause of civil war.

A draft bill amending the Precious and Semi-Precious Stones Act says any producer coming into possession of what it terms an “unusual” rough or uncut diamond shall notify the minister within 30 days after which government shall have the first option to buy the stone.

The bill did not give a precise definition of “unusual.”

But an official told a local newspaper that it referred to stones that were unusually large, were particularly clear or had an unusual colour.

Moses Tshetlhane, chief minerals officer in the Mineral Resources Minister, told Mmegi Newspaper the amendment was motivated by the recovery of “Lesedi La Rona,” or “Our Light,” the largest diamond uncovered in over a century.

“The price to be paid by government for a rough or uncut precious stone offered for sale by the producer shall be agreed between the parties in accordance with the current market price of the rough or uncut precious stone,” the bill says.

The tennis ball-sized stone was found in November 2015 at Lucara Diamond Corp’s mine in Botswana and is yet to find a buyer after it failed to sell at Sotheby’s auction house in June 2016.

“These outliers carry special features and any producer would celebrate such or even have them in museums as national treasures. So it is not unusual for governments to have options in such unusual diamonds,” Tshetlhane said.

Lucara also unearthed another 812.77 carat stone, The Constellation, at the same mine, which fetched $63 million at an auction in 2016.


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