Rio Tinto pivots towards smaller finds with growth potential

31st October 2019, By: Reuters. Copied under Fair Use Policy educating Africa.

MELBOURNE – Rio Tinto has changed its exploration strategy to consider smaller ore deposits that have growth potential, as the likelihood of finding large, low cost mines dwindles, an executive said on Thursday.

Global mining giants like Rio Tinto and BHP Group have long banked on finding large mineral deposits that can weather commodity price cycles because of economies of scale – so-called “tier one” deposits.

Copper is currently in hot demand for use in green technologies, from wind turbines to electric vehicles, but those reserves have proven tough to find so Rio Tinto has had to take a new approach, said Lynn Olssen, a General Manager at Rio Tinto’s exploration department.

“Copper is our preference. A bit like BHP we’d love a tier one … large and low low cost. If you could do it, could it be shallow please and near the coast, with some good infrastructure would be ideal,” Olssen told a Melbourne mining conference.

“However in recent times, tier ones have become a lot harder to find … So we have changed our philosophy a little,” she told a mining conference.

Rio Tinto will now consider smaller resources that have the potential to grow if they have a moderate capital expenditure, are in jurisdictions with low political risk that don’t have large wealth inequality, and can be developed in a reasonable timeframe, she said.

Her comments are in line with a speech by Rio Tinto Chief Executive Jean-Sébastien Jacques in London this week, when he said that majors may need to think more like nimble juniors.

“Instead of looking for the big bang, maximum … development options, perhaps we should look to (staged) investments, starting with smaller mines, which can be built quickly and safely, with embedded optionality for growth,” Jacques said.

Shorter building timeframes translate to quicker cashflows to shareholders, communities and governments, he added.

According to its half-year report, Rio Tinto spent $287 million on exploration and evaluation in the six months to end-June, up 24 percent on a year earlier.

The miner is actively drilling and exploring for 8 commodities across 17 countries.

“We have got more greenfields targets now than we have had in two decades,” Olssen said.

Its fantastic to finally see an African investment firm looking into African mining assets and investing. African Finance Corp (AFC) of Nigeria is one of the few African investment firms announcing this move in West Africa. If national economies want the full benefits of mining investment, they need a level of national investment and not all foreign investment. The challenges with small and large international investors, although they have the expertise and ability to raise money to develop mines quickly, once the mine is operational and infrastructure paid for, they pay the legislated taxes and royalties and then want to take their full profits out-of-country back to their shareholders on international exchanges (TSX, ASX, AIM) whom now have high dividend expectations (of all mining companies) as well as re-investment into their other international projects. The end result national governments see large amounts of profit leave their country and not get re-invested into their national economy, this ultimately creates conflict with national government v’s international mining company and can lead to increased government frustration and sometimes legislative changes (Tanzania, Zambia, South Africa, DRC, Sierra Leone etc) to try and peel more money back for the development of their economy and people. The legislative changes are then interpreted as instability by the foreign investment companies and they start to retreat from African nations. Developed mining nations can afford open market funds flow in/out of country as they also have sophisticated stock exchanges also making them money from mine assets held in undeveloped nations via share taxation. Inversely, African nations cannot afford open markets nor do they have sophisticated mine stock exchanges, they essentially need the mine profits to develop their countries infrastructure and economies.

We need to see more African’s investing into their own mining industries at a national level to truly create the sustaining transformation and uplift governments expect from mining assets. Once mined the opportunity no longer exists. African governments therefore need to bear some of the cost burden on implementing methods which attract national investment, this is usually done by tax incentive particularly for exploration same as is done in the developed mining nations.

 African lender eyes unloved neighborhoods in mining drive

ABUJA – African Finance Corp (AFC) will invest in countries disregarded by other companies as part of a plan to double its exposure to the mining industry, the firm’s head of investments said.

The Nigeria-based development-finance firm is mulling mining and refining opportunities in Mali, Burkina Faso, Gabon and the Democratic Republic of Congo. The sector remains attractive despite the US-China trade dispute dragging down global commodity prices, senior VP of investments Begna Gebreyes said.

AFC currently has about 10% of its long-term assets in mining and will increase that to 20% in three to five years, Gebreyes said in an interview Tuesday on the sidelines of a mining conference in the Nigerian capital, Abuja. At the same time, the company plans to more than double its overall balance sheet to $10-billion by 2025, he said.

“We are not accelerating indiscriminately, we are picking our spots,” Gebreyes said. “We see a lot of great untapped assets in what others may consider unattractive neighborhoods.”

Ultra-low or negative interest rates in developed economies will help sustain gold prices, while a global shift to renewal energy will likely bolster the value of battery minerals such as cobalt, nickel and manganese in coming years, Gebreyes said.

AFC is considering investing $500-million in mining and smelting projects to help add value to the resources produced in Africa, said AFC’s head of natural resources, Osam Iyahen. He declined to identify the targets.

The company is also concluding a $78-million debt-equity package with Vancouver-based Thor Explorations to develop an advanced gold project in southwest Nigeria in what would be the largest ever investment in the nation’s mining industry, Iyahen said. AFC also plans to create a fund to finance feasibility studies of early-stage Nigerian projects, he said.

Known for its vast oil reserves, Nigeria has large deposits of minerals including iron-ore, gold, zinc and lead. The nation doesn’t have any large-scale industrial metal production in a sector that contributes less than 0.1% of gross domestic product, according to the National Bureau of Statistics.

Article Published by Boomberg 18th October 2019.

Copied under Fair Use Policy. Educating Africa.

I first encountered early tests for HyLogger in Pilbara iron ore back in the early millennium which was in its infancy back then, now 15 years later look at how far this system has advanced with an online digital portal including digital images, profiles and mineralogical interpretations. It’s very impressive. Imagine what will be modelled in 15 years time with this visionary system. Other nations take note of the highly advanced system.

CSIRO launches open-access virtual core library
CSIRO has introduced the National Virtual Core Library (NVCL), a digitised collection of 10 million metres of drill core estimated to be archived in warehouses around Australia.
The cores are analysed using HyLogger, an automated sampling system that generates digital images, surface profiles and mineralogical interpretations.
The data is then compared and mapped with other adjacent cores to build a bigger picture of what’s underground in a given area, providing ‘a new set of eyes’ to geologists, so they can map mineral composition rapidly and objectively.
According to the CSIRO, drilling costs each drill hole costs around $200 to $300 per metre of core, with one drill core sample costing potentially hundreds of thousands of dollars.
CSIRO honorary fellow Jon Huntington said, “In a good year, the Australian exploration industry can spend in the order of half a billion dollars per annum drilling holes.”
Maximising results from previously drilled cores is essential. The resource has valuable information to help explorers better target prospective areas, which decreases reliance on drilling and impact on the environment. It also provides insight into future exploration programs.
“In the past, exploration was often quite commodity and spatially focused; a nickel miner would look intensively for nickel in conventional nickel terrains but not consider other commodities,” Huntington said.
“The modern concept in exploration is the examination of an entire mineral system, which has multiple spatial and geological age dimensions possibly containing multiple commodities.
“Traditionally, if you found a vein of gold, you focused on that. Today you would be interested in the five to ten kilometres around that vein and even other commodities – a mineral system is a much bigger target than an orebody.”
CSIRO mineral exploration geologist Belinda Smith said the NVCL aimed to characterise the top one-to-two kilometres of the Australian continent
“With the NVCL, we can go back to the old drill cores and ask, ‘What are the near-miss indicators?’ I can now interpret the non-economic, alteration minerals in a drillcore that suggest I am in a good place – whether it’s 100 metres, a kilometre or even five kilometres away,” Smith said.
The NVCL is an open-access resource for anyone in the world.

Published by Australian Mining. Written by Andy Ewe 3rd September 2019.
Copied under Fair Use Policy.

De Beers reports successful second translocation of elephants

12th July 2019

The second translocation of elephants from diamond miner De Beers’ Venetia Limpopo Nature Reserve (VLNR), in South Africa, to Zinave National Parks, in Mozambique, has been completed.

The first herds of elephants were corralled at the VLNR on June 25, before being transported by road for about 1 700 km, and released at Zinave on June 27.

The final herds arrived at Zinave this week, bringing the total number of elephants moved this year to 53.

The translocation is part of a major conservation effort – called ‘Moving Giants’ – that aims to move some 200 elephants over three years in a bid to help secure the future of the VLNR, which, at the beginning of last year, was under threat owing to too many elephants impacting on the broader ecosystem, while also helping to repopulate Mozambique’s elephant population.

During the first phase of the project, 48 elephants were translocated in July and August 2018. These elephants, moved in family groups, consisted of matriarchs, younger males, females, and calves.

Those elephants have been integrating with other herds at Zinave and have been thriving with more space and food now available to them, De Beers said in a statement.

The remaining elephants at the VLNR are expected to be moved to national parks in Mozambique with sufficient elephant carrying capacity from next year.

De Beers Group is partnering with Peace Parks Foundation and Conservation Solutions. Peace Parks co-manages Zinave National Park with the Mozambique government and has ongoing responsibility for the wellbeing of the elephants, ensuring they continue to thrive in their new environment.

De Beers CEO Bruce Cleaver said that, “to be part of a conservation effort that will rehabilitate a national park in Mozambique and, at the same time, ensure that other species at one of our nature reserves in South Africa can flourish makes me feel very proud”.

Peace Parks CEO Werner Myburgh, meanwhile, said the future of the African elephant was bleak in most parts of Africa, except for the Southern Africa region where the outlook on their population numbers was stable and, in some cases, even increasing.

“Zinave National Park . . . is one of these places and brings hope as a new founder population is on the rise. A rare new beginning in today’s day and age, where there is space and safety for these gentle giants.”

De Beers Group is also backing up its investment in the elephant translocation initiative by providing Peace Parks with a further $500 000 investment from the Anglo American Foundation to enhance and extend antipoaching support measures.

By: Simone Liedtke

Can crowdsourcing or algorithms find new deposits? It’s certainly a challenging question for exploration geologists particularly those that have spent a lifetime learning and applying geological models and gathering data in the field and building digital datasets with the ultimate aim of a mineral discovery. It’s a fascinating and exciting topic as with the American tech companies investing heavily in the space, I also wonder if their studies rely on existing digital data common in the USA or are they also converting non digital data spread across the globe?

A few comments …..Firstly geologists are well acquainted with Big Data, we have been using terabyte datasets for probably a decade or more depending on the size-type of project etc. We have a range of expensive big softwares which are used to manipulate data in 3D, its not new.

Secondly, as with any data there is ‘great data’ ‘good data’ ‘not useful data’ and ‘incorrect data’ sorting through to usable digital format costs time and money, some data may even be difficult to define the big data ‘relationships’ needed for algorithm searches. Does running algorithms or dispersing data to crowdsourcing create a more precise and reliable exploration target when both rely on the same data inputs? Machine learning relies on ‘available geoscience’ however in the absence of data, can successful targets be defined?

Years ago at the beginning of the iron ore boom, I ran a workshop with 20-30 geologists each with variable experience and variable geological backgrounds to define iron ore targets in the Pilbara, Western Australia. We used regional datasets (hardcopy and GIS) and the participants were not familiar with the regional known deposits only the local ones they worked on. After spending two days going through regional geochemistry, geology, mineral occurrences, aerial-magnetics and pretty crappy ground gravity, the teams circled areas in which they believed could be mineralised for the various iron ore mineralisation styles (Marra Mamba, CID, Brockman & Nimingarra Fm) they were assigned. For most mineralisation styles the targets defined were the already existing mining areas and known deposits which the participants didn’t precisely know during the exercise. We were however looking for new deposits. What I learned during this exercise was that ‘existing data’ points geologists to familiarise themselves within areas where data exists and not where data doesn’t exist, there weren’t many new targets as there were large areas without data. Can crowdsourcing or algorithms validate exploration targets in the absence of data? Unlikely. The high cost of exploration is in the gathering of good data which is time consuming and costly. 4IR hasn’t reduced the high cost of exploration at this stage in its evolution, we’re still looking for ways to reduce drilling costs and have been trying to do for a decade with limited success.

Thirdly, deposits are located beneath the land surface where geologists struggle to see and even with modern technology the targets remain uncertain before drill testing. Can an algorithm or crowdsourcing do more or better seeing beneath the earth? Drilling and geophysics are likely the better tools, however again it comes down to the spread, depth and quality of data inputs. Exploration is essentially testing a hypothesis in the absence of data ie lets use various exploration tools to determine if and where to drill a hole and then drill test the idea to find a deposit, the decision on when and where to drill is not always an easy decision and most junior companies are in a hurry for success to keep shareholders content and the larger companies are generally not in a hurry as a new deposit doesn’t give much impact on their shareprice, its more about the tonnages and ounces they produce and annual dividends. It’s the indirect exploration activities and drilling which cost the big bucks and ultimately creates the risk in the exploration game as there is no guarantee for success. For exploration geologists, having the ability to see deposits beneath the surface for a range of minerals and commodities will certainly be a game changer and likely geophysics is closer than any other technique but it remains expensive, the larger or more detailed the survey, the more it costs.

In terms of geoscientific data, regional data creates regional targets, and project scale data creates project scale targets, both serve different targeting purposes. The deeper you explore and dig into the data pile ie from regional down to project scale drilling targets, the more information you have to run algorithms and provide for crowdsourcing ideas however the more expensive the exploration program. Those countries with well organised geoscientific data will definitely benefit however mineral endowment is driven by the earths crust processes and not the data systems used to manipulate. If you’re in a highly endowed terrain and you have great data, perhaps we’ll learn more about super terrains but those regions without good quality data will only get left behind and this isn’t positive for humanity in undeveloped countries.

The comparison to Linux where open source programming has provided large benefits for the program and Linux community, the difference with exploration data however is only the company that holds the mine tenure will benefit from a mineral discovery as it is funding the exploration expenditure in which to make the discovery, the invested interest is not equal weighted.

Ozminerals have certainly taken a big step forward, although AUD$1M is a lot of drill meters that could have been spent on testing existing targets for discovery and would also give a fabulous airborne or seismic survey or further high end data manipulation as well. Will they have the budget and persistence to test all 400 targets, unlikely, but they will learn and fine tune the process as they drill test the targets, if there is a great benefit they are well advanced.

Another aspect to consider is exploration licenses and permits are commonly granted for a specific time frame commonly two-three-five years with extensions, if a project is nearing the end of the permitted timeframe and have not succeeded in making a mineral discovery in-house, the project is more likely to enable public viewing of the data towards the end of the tenure period.

I believe there is a long way to go in terms of ability-enthusiasm to make exploration data public by mining companies due to the high cost of acquisition and likely a number of new breakthroughs to happen to ignite the enthusiasm. Time will tell, watch this space, its terribly interesting.

This article was prompted by a recent article by Stockhead, click on link below to view.

Stockhead article

Bushveld reports 1.58% vanadium grade for Brits project

21 June 2019 , By: Marleny Arnoldi, Creamer Media Online writer

Aim-listed Bushveld Minerals on Friday announced the maiden mineral resource estimate for its Brits vanadium project, in South Africa’s North West province.

Bushveld reported a 66.8-million-tonne aggregate inferred and indicated mineral resource across three seams at the project, grading at an average of 1.58% vanadium oxide in magnetite, at a cutoff grade of 20% magnetite in whole rock, for 175 400 t of contained vanadium.

The maiden mineral resource incorporates data from the company’s 2018 drilling campaign, which comprised 26 drill holes over 2 967 m of drilling.

The Brits project is directly along strike from Bushveld’s 74%-owned Vametco Alloys mine.

The indicated mineral resource tonnages account for 67% of the total combined mineral resource and stand at 44.9-million tonnes, with an average grade of 1.59% vanadium oxide in magnetite, for 115 600 t of contained vanadium across the three seams.

The lower seams represent a major portion of the total combined mineral resource tonnages at the cutoff grade of 20%, with 55.5-million tonnes at an average grade of 1.58% vanadium oxide in magnetite for 137 000 t of contained vanadium.

However, the intermediate seam has the highest grade of the three seams at 1.76% vanadium oxide in magnetite, though the tonnages are low at the current cutoff grade of 20% magnetite in whole rock.

The mineral resource was reported up to a depth of 150 m below surface and was based on the drilling of the western and central blocks of the farm Uitvalgrond Portion 3, which extends over a strike length of about 1.65 km to the most eastern fault.

As such, Bushveld said there was potential to increase the resource on the remaining eastern unexplored portion of the farm on a strike length of 1 km.

Bushveld targeted producing, from all operations, more than 8 400 t/y of vanadium.

Africa: Still the Land of Opportunity – International mining investment

South Africa ranks low on the list, West Africa ranked highest

29 May 2019, Report By: Will Coetzer, Managing Partner, Stratum. The Assay Africa Edition Insight, Articles

As a mining executive search, advisory and consulting firm, Stratum International’s coverage is inevitably global. Yet, historically nearly 40% of our recruitment and consulting mandates have been on the African continent. Unsurprisingly then, we take a significant interest in Africa’s mining industry’s heartbeat.

Over the last 24 months, the mining industry has collectively been anticipating a sustained (and we dare say, hoping for a rapid) recovery; there have certainly been several promising, but ultimately false dawns. While we believe that the industry has a tailwind that will be blowing stronger in the next few years, so many macro factors (USA-China trade war, increased political risk, equity markets being sucked dry by cryptocurrency and weed, to name a few) continue to contribute to the unknowns.

For this article we wanted to find out the general mood around investing and working in the mining industry in Africa. At Stratum, we pride ourselves on our sector expertise, established over nearly 15 years in the industry, across more than 50 countries. And we always inform our opinion with research to supplement and test our own observations and experience.

We ran a survey amongst clients, candidates and contacts who live, work or have an interest in Africa, that asked about their perceptions of the market, investment climate and the opportunities on the continent. Responses came from miners and investors across Africa, as well as in headquarters around the world, with those based in South Africa (14%), the Democratic Republic of the Congo (9%) and Burkina Faso (7.5%) particularly well represented in our sample. I emphasise we are not fund managers or mine owners. However, our day-to-day exposure to the executive and senior level recruitment market, as well as via our PE/Fund clients, gives us a unique and, I hope, interesting perspective on market sentiment. Over the years we’ve found recruitment is often a good lead indicator of investment decision making.

In this article, we’ll review what our survey respondents told us, share our own observations, and discuss how we see the prospects and opportunities for professionals, miners and investors in Africa.

Overall confidence

Mine investment confidence in Africa

We asked our respondents about the current level of confidence amongst miners and investors in Africa. Only a quarter (25%) of respondents felt confidence levels were negative, although a further 31% described a neutral situation. Where respondents explained their answer, the reasons for negativity often involved concerns about government interference, political interference, changes to the mining code, and increased legislation and taxation. As one respondent who has worked in four different parts of Africa put it, “Resource Nationalization is a big concern and governments are interfering with Operations Management.”

Other reasons for negativity included the perception that investment was drying up because of the availability of other safer or ‘sexier’ investment opportunities. In our experience, this concern has often been expressed over the years, yet investors do keep returning to the sector in cycles, perhaps attracted by the philosophy that higher risk can mean greater reward.

More than two fifths (44%) of the sample detected greater market confidence, with 6% describing ‘very positive’ levels. We found people who worked, operated or invested in West Africa, and in particular Ghana, Burkina Faso and Mali, were most likely to see positive confidence levels.

A Process Manager with two decades’ experience in the continent told us, “Resource interest has been given a boost, compared to the slump 2015-2017, through major players like Barrick, Randgold shaking up things and investors realizing things are not as negative as they thought three years ago. There is definitely more interest, and I am seeing it by way of the markedly increased number of times I have been approached over the last 18 months.”

When we asked how confidence levels had changed over the last 12 months, the results were divided almost equally between increased levels of confidence (33%), reduced confidence (37%) and no change (30%). Differences by geography were subtle, but interesting. Respondents based in Mali had seen no change or positive change over the last year. A majority of people in Burkina Faso reported a fall in confidence, a perception that is likely to have been influenced by increased terrorist activity in the country.

Replies from those placed in South Africa were equally divided between positive and negative change, reflecting the current situation in the country “post-Zuma”. Hopefully the elections on 8 May will help set the country more firmly on track to recovery.

The slight tendency towards reduced levels of confidence over the last 12 months does reflect the trends we noticed over the last year. Activity was reduced worldwide, but there was a definite downturn in recruitment into Africa in the second half of 2018. Our conversations with the investment community also indicated concerns about investing more in the region.

It has become a little harder to do business in Africa. In many countries, there is a clear and understandable trend to local recruitment, and in Zambia, for instance, it seems particularly challenging to secure expat visas. However, there are positive developments too; we believe the peace agreement between Ethiopia and Eritrea opens up significant opportunity for investment in East Africa, although this was not reflected in the response to our survey. Early days. We have, however, noticed increased activity in Africa in the first quarter of 2019, and in development stage projects in particular. We received as many mandates for mining operations recruitment in Q1 2019 as we did in the corresponding period of the previous year, which was one of the best first quarters we have experienced.

This trend seems likely to continue into 2019 given the increased number of conversations we are currently having with miners and Private Equity houses with interests in Africa. It also seems that a small but growing part of the market is battery metals, particularly lithium.

Which professions are seeing the most demand?

Mining Professionals in demand in Africa

We asked our sample which professions had seen the most recruitment activity over the last year and which they thought would be in demand over the next 12 months.

Unsurprisingly, roles in Operations and Project Management dominate this table. This reflects the reality on the ground and the nature of our sample, as our firm is particularly active in these areas. Respondents working or investing in Burkina Faso and the Democratic Republic of the Congo were particularly likely to believe Operations professionals would be in high demand in the future.

Demand for excellent operations professionals tends to remain positive whenever miners are seeking to maximise returns from existing assets – a situation that prevails in good times and bad!

What is surprising is the reduced confidence in project development on the continent. In our experience, project development mandates have been increasing over the last 18 months, albeit at a glacial pace. We do appreciate, though, that these do not constitute a full-blown market recovery and this trend needs more substantiation before it is perceived to be real. We have, after all, been here before. Nevertheless, we are surprised by the sentiment on this point, as we are more bullish on projects in the next 12 months.

More than half our sample (53%) believed there would be no difference between recruitment activity in the last 12 months and the next 12 months. Of the rest, Exploration was seen as the profession most likely to see an increase in demand and Private Equity recruitment was also considered likely to increase.

This increase in Exploration recruitment was predicted in Stratum’s last job market report, although it has taken longer than we expected. We believe these findings reflect an increasing appetite for investment and exploration opportunities in the continent.

But where specifically are those opportunities?

What are the most significant opportunities for investment and exploration?

We asked our sample which regions of Africa they thought offered the greatest investment and exploration opportunities over the next two years.

West Africa was seen as offering the most opportunity with more than three quarters (77%) seeing the region as a good option for investment and two thirds (66%) as a good exploration prospect. Nearly a third (31%) of our sample selected West Africa alone as a good investment opportunity in Africa.

Those respondents who explained their decision highlighted political stability, less aggressive tax regimes and improved infrastructure as the principal attractions of West Africa. One respondent based in Tanzania said, “the operating climate is generally slightly improved or no worse in West Africa; while it is deteriorating elsewhere,” which it must be said is a qualified endorsement.

West Africa was not unique in being perceived in providing opportunity, with all parts of the region attracting some support; some more than others. South Africa, South East Africa and North Africa were generally considered unattractive. Some respondents complained about poor infrastructure and unreliable electricity supplies in the region, but we believe geopolitics plays a more significant role here.

One respondent told us, “Over the last few years, political risk was becoming less of an issue; however, several provinces have seen an increase in political risk in the last two years with short-sighted changes in regulation in a blatant attempt to cash-grab by various governments. If this keeps going, Africa, in general, will return to the days of high political risk with a subsequent reduction of investment.”

Ingo Hofmaier, Head of Metals and Mining at Hannam & Partners, sees it more differentiated: “Funds who invest in emerging markets, have an increasingly educated view about country risk and keep that up-to-date by country. Some countries in Africa are shunned by a majority of funds, which is often a reflection of lack of financial success of junior mining companies in that particular market, not necessarily headline-grabbing news about instability. The ability to navigate political and permitting risk via a ‘boots on the ground’ approach has also increased the emphasis on hiring teams that have executed projects in a particular country and situation. With the right team, permitting in Africa can be a lot easier (and quicker) than in OECD countries, was our experience.”

South Africa’s election, which has yet to take place at the time of writing, may result in greater certainty and confidence, though this is likely to take some time to manifest as investment.

When we asked our sample which minerals, metals or commodities offered the most considerable investment and exploration opportunities over the next two years we received thirty options in each category, reflecting the abundant wealth of deposits in Africa. Respondents were able to select more than one option, and several chose to provide a long list in response.

Comparative investment for Exploration Opportunities in Africa

However, a handful of materials dominated the lists. The best investment opportunities were seen to be in Gold (71%), Copper (55%) Cobalt (39%), Rare Earth Metals (27%) and Diamonds (24%), while exploration opportunities were considered to be particularly strong in Gold (65%), Copper (53%), Rare Earth Metals (37%) and Cobalt (35%).

A small but noticeable number of our sample chose to highlight emerging opportunities in lithium particularly. This seems consistent with macro sentiment, considering the impending EV revolution.

Gold, however, dominates the list and we anticipate a flurry of activity in the months and years ahead. Despite the long-term predictions of a Barrick acquisition of Newmont, there was instead a merger between Newmont and Goldcorp. We anticipate much more producer merger activity in the not so distant future. Whether this will be an existing player or a new consolidation remains to be seen.

A brighter future?

The mining industry is renowned for its cyclical and sometimes volatile nature, and Africa, a continent with so much opportunity for miners, quite often sits on the extremes of these vacillations. But where there is a risk, there is an opportunity. We all know it, and it is part of the appeal of this unique industry.

The results of our survey and our observations of the market indicate an increase in optimism and activity, particularly in West Africa. Gold and copper miners are particularly likely to increase activity, and we anticipate more opportunities for exploration professionals over the next year or two.

We believe miners and investors will continue to see Africa as a land of opportunity. However, of all investment opportunities, mining demands patience, and in our opinion, it is only those investors with a long-term view who can and will ultimately bring stability to the sector.

28th May 2019, By: Creamer Media

President Cyril Ramaphosa has signed the Carbon Tax Act into law and it will come into effect on June 1, the National Treasury said on Sunday.

The Act was gazetted on May 23, together with the Customs and Excise Amendment Act, the Treasury said in a statement.

“Climate change represents one of the biggest challenges facing humankind, and the primary objective of the carbon tax is to reduce greenhouse gas (GHG) emissions in a sustainable, cost effective, and affordable manner. Government has outlined its strong commitment to play its part in global efforts to mitigate GHG emissions as outlined in the National Climate Change Response Policy (NCCRP) of 2011 and the National Development Plan (NDP) of 2012,” the Treasury said.

The Carbon Tax Act gave effect to the polluter-pays principle for large emitters and helped to ensure that firms and consumers took the negative adverse costs (externalities) into account in their future production, consumption, and investment decisions.

Firms were incentivised to adopt cleaner technologies over the next decade and beyond. The carbon tax would initially only apply to scope one emitters, from June 1 to December 31, 2022, and the second phase from 2023 to 2030.

The design of the carbon tax also provided significant tax-free emission allowances ranging from 60 percent to 95 percent in this first phase. This included a basic tax-free allowance of 60 percent for all activities, a 10 percent process and fugitive emissions allowance, a maximum 10 percent allowance for companies using carbon offsets to reduce their tax liability, a performance allowance of up to five percent for companies reducing the emissions intensity of their activities, a five percent carbon budget allowance for complying with the reporting requirements, and a maximum 10 percent allowance for trade exposed sectors.

“The introduction of the carbon tax will also not have any impact on the price of electricity for the first phase. This will result in a relatively modest carbon tax rate ranging from R6 to R48 per tonne of CO2 equivalent emitted… to further provide current significant emitters time to transition their operations to cleaner technologies through investments in energy efficiency, renewables, and other low carbon measures,” the Treasury said.

A review of the impact of the tax would be conducted before the second phase, after at least three years of implementation of the tax, and would take into account progress made to reduce GHG emissions. Future changes to rates and tax-free thresholds in the Carbon Tax would follow after the review, and be subject to the normal transparent and consultative processes for all tax legislation, after any appropriate Budget announcements by the Minister of Finance.

The 2019 Customs and Excise Amendment Act and Memorandum on the objects of the Act contained provisions related to the administrative arrangements for the collection of carbon tax revenues by the South African Revenue Service (SARS).

“It was split from the Carbon Tax Act as a separate Act for technical legal reasons related to money bills not containing administrative provisions in terms of section 77 of the Constitution,” the Treasury said.

LSE says, hello, Africa! Come list with us

22nd May 2019, By: Bloomberg

It’s not often that the LSE comes to Africa looking for listings. Traditionally companies based on the continent have to make a strong case to have their stock traded on one the world’s biggest bourses.

But this week, officials are on roadshow in a bid to boost the LSE’s 115 African listings. The exchange is banking on partnerships with African exchanges, including those in Nigeria and Kenya, for dual listings, according to Director of Emerging Markets and International Markets Ibukun Adebayo.

They will visit Nairobi and Luanda, the capitals of Kenya and Angola respectively, after a similar visit to South Africa two months ago. They also plan future stops in Abidjan, Cairo and Casablanca, Adebayo said. A final roadshow in New York is planned to showcase the companies to African investors as part of a UN initiative, he said.

“If a company has an international strategic growth plan, then the LSE is a perfect vehicle for the company to come and list,” Adebayo said Tuesday in an interview in Nairobi. “If the company is purely domestic and it needs to raise money in the domestic market and increase the number of investors available to it, then the LSE can help work with local partners.”

The LSE doesn’t expect Brexit to have a significant effect on the operations of the bourse, Adebayo said. On average, about 40% of the investors in companies listed on the LSE are from the UK, 30% from the US and 9% are European, he said.

Many African companies are in the budding stage, focusing on growth and lack the scrutiny that comes with being a publicly traded entity, Nairobi Securities Exchange Chief Executive Officer Geoffrey Odundo said during the roadshow.

“Every entrepreneur’s dream is to go public,” Odundo said. “We are yet to get to that realization in Africa.”

Companies that have announced plans to list on the LSE include the National Oil Corporation of Kenya and Econet Wireless Zimbabwe.

20th May 2019, By: Martin Creamer, Creamer media editor

JOHANNESBURG (miningweekly.com) – A new manganese-containing material may contribute to platinum-using hydrogen fuel cells being driven down the cost curve.

The new material, made from manganese hydride, is being earmarked for use in molecular sieves that work with the fuel cells in hydrogen fuelled systems that generate electricity.

Science Daily quotes Professor David Antonelli, the physical chemistry chairperson at Lancaster University, as saying the use of manganese-based sieves may result in hydrogen fuel cell systems costing many times less than lithium-ion batteries used in electric vehicles.

As countries tighten emission standards that define the acceptable limits for exhaust emissions of new vehicles sold, hydrogen fuel cells are coming into their own. CXLive reports that Chinese vehicle dealerships will no longer be allowed to sell vehicles that do not comply with the upcoming sixth emission standard in China, which is giving strong ongoing support to the development of hydrogen fuel projects.

Last week, Beijing Shouhang IHW Resources Saving Technology signed a cooperation agreement with the Datong local authority that gives the Shenzhen-listed company access to a $290-million hydrogen industry investment fund, tax support and low-interest loans. Envisaged are three hydrogen production plants and ten hydrogen refuelling stations.

Hydrogen Fuel News reports that international company Bosch is throwing its full weight behind hydrogen fuel cell technology, in partnership with Powercell Sweden, a manufacturer of  fuel cell stacks that convert the hydrogen into electricity. The technology developed by the two companies is earmarked for initial use in heavy-duty trucks and then cars.

Hydrogen fuel cell cars are electric vehicles that use hydrogen and oxygen to generate electricity with the help of platinum. The byproduct is water and there is no exhaust emission. Hydrogen filling stations are needed to support fuel cell electric vehicles, which is why hydrogen infrastructure is being rolled out in many countries. In the US, for example, the state of California is targeting 1 000 hydrogen fuel stations by 2030 for its growing number of fuel cell electric vehicles that currently refuel at 39 hydrogen stations, with another 25 in the development phase.

Anglo American Platinum CEO Chris Griffith told last month’s Platinum Group Metals Industry Day of “very real and credible progress being made in the development of the hydrogen economy”, which is being benchmarked as the sole route to 100% carbon-free driving for cars, trucks, buses, trams, trains and ships, in a world that is legislating to end harmful vehicle emissions.

“From start to finish, not a single gram of carbon dioxide is emitted,” Anglo American executive head of PGMs market development Benny Oeyen assured Mining Weekly Online in a recent video interview.

What is more, hydrogen can store excess electricity for placement on power grids at times when the wind is not blowing or the sun is not shining, and hydrogen fuel cell vehicles can travel 600 km to 700 km before needing to fill up in two to three minutes at filling stations.

Hydrogen, which is clean, is generated in abundance by the sun, with the oceans storing voided hydrogen that can be regenerated to active hydrogen.

Currently, Honda, Toyota, Hyundai and Shanghai Automotive International Company Motor Corporation of China (SAIC) have hydrogen fuel cell cars on the market. SAIC, which is the joint venture partner of General Motors and Volkswagen, the two market leaders in China, has the Roewe 950 fuel cell car.

Many more vehicle manufacturers are also studying fuel cell electric vehicles, which dovetail perfectly with the world’s adoption of renewable energy to combat climate change.