Africa awakened with rising mining operations

Although under explored, and currently only contributing less than 7% to the world’s major metal production, Africa holds around 30% of the planet’s mineral reserves with 40% of the gold, 60% of the cobalt and 90% of the world’s platinum group metal (PGM) reserves.

Currently, it excavates more than 60 metal and mineral products including gold, diamonds, uranium, manganese, chromium, nickel, bauxite, copper and cobalt. South Africa, Ghana, Zimbabwe, Tanzania, Zambia and the Democratic Republic of Congo dominate the African mining industry while Angola, Sierra Leone, Namibia, Zambia and Botswana rely heavily on the mining industry as a major foreign currency earner. And Mozambique, Nigeria and Madagascar have tremendous potential for base metal and industrial mineral deposits.

Major new mining operations currently under development are scattered between South Africa, Namibia, Botswana, Tanzania and Gabon, which produce gold, diamonds, niobium products, platinum group elements, chrome and base metals.

Major discoveries lately include that of several potentially diamondiferous kimberlites in Mauritania, and even more diamonds in marine deposits close to the coast of southern Namibia.

Foreign investments in the continent’s mineral resources are high, with an increased number of mining companies wanting to do business in Africa because of its easy access to minerals and the opportunity to excavate new resources.

The largest companies that currently have mining operations established throughout Africa, realising an estimated total of US$335 billion, include Australian companies BHP Billiton and Rio Tinto; South Africa’s Anglo American and Xtrata; and Barrick Gold Corporation, with main offices situated around the world.

In Botswana, diamond corporation De Beers will be moving its diamond sorting headquarters from London to Gaborone, which means a positive growth in Botswana’s economy with an increasing number of diamond buyers and dealers visiting, thereby contributing to increasing tourism numbers as well.

The growth of mining operations in Africa results in sustainable development, as the infrastructure built for operational purposes of the mines is being used during and after the mining process by employees, their families, all residents affected by the project, as well as nearby communities. This contributes significantly to the ambitious Programme for Infrastructure Development in Africa led by the African Union Commission, the New Partnership for Africa’s Development, and the African Development Bank.

In the Northern Cape province, the Tshipi Borwa manganese mine is an ideal example of the important role that infrastructure plays in the operations of a project. The government currently is evaluating the significant increase for the use of the railroad to Coega, with proper port facilities to handle the loads.

Another noteworthy example is the Indian steel manufacturer and power generation company, Jindal Steel & Power Limited, which is set to build a 2 640-megawatt power plant in the rich coal-bearing province of Tete in Mozambique.

Tete is one of the largest undeveloped coal mining regions in the world, and hosts various mining operations such as the $376-million Ncondezi coal project with a total Joint Ore Reserves Committee (Jorc) compliant resource of 1.8 billion tonnes. Its first coal production is scheduled for the end of 2014/early 2015, with an estimated 37-year mining forecast.

In view of the world’s energy crisis, the development of nuclear power stations has become an option, with uranium a sought-after commodity.

In Namibia, the $638-million Etango uranium project is being developed in Erongo, with an average production rate of between five million and seven million pounds of uranium oxide per year forecast for the next 20 years.

Another main centre for uranium mining in Africa is focused along the Witwatersrand Basin, which holds the world’s largest gold reserves. Here, uranium is found in Precambrian quartz-pebble conglomerates in the Brakpan and Krugersdorp regions; although deposits are low-grade, mining is still feasible by unearthing high tonnages. The largest project for uranium mining is the Randfontein mine, known as the Ezulwini project, with an inferred uranium output of 83 969 tonnes.

Future projects involving uranium mining include one of the world’s largest suppliers of nuclear fuel, Areva, with setting up a uranium processing plant in the Karoo region in South Africa – establishing an even bigger market for uranium as a buyer of processed ore.

To boost uranium mining even further, China National Nuclear Corporation – the nation’s largest nuclear power plant builder with its subsidiary China Nuclear International Uranium Corporation – has signed an agreement with the China–Africa Development Fund to jointly develop uranium resources in Africa.

But gold remains a large contributor to further development in Africa, with the increased demand driving further projects such as the Konongo gold project in Ghana. This project will be developed into a 100 000-ounce-per-year gold producer from the existing JORC–compliant resource of over 1.27 million ounces.

Copper mining in Africa is supported by numerous mines throughout the continent, including the Bou Azzer mining complex near Marrakech, Morocco; the East Province mine in Cameroon; the Selebi-Phikwe mine in Botswana; and the Chibuluma West underground mine and Chibuluma South open-pit mine in Zambia.

Other massive mining projects include the BHP Billiton–Xtrata joint venture, and the Douglas–Middelburg Optimisation Coal Project in South Africa, worth R9.3bn. It is set to continue producing profits for active mining companies in Africa until 2034.

More than 4 000 of the world’s largest and most influential stakeholders, financiers, investors and mining professionals in African mining from more than 180 countries – together with more than 40 African government delegations, national mining ministers, government leaders and regulators – come together each year at the African Mining Indaba held in Cape Town, South Africa. The next indaba will be hosted from 6 to 9 February 2012, where visitors and delegates will join a powerful international group of industry professionals to form vital relationships for sustained investment interests, portfolio growth, asset diversification and further development of mining in Africa.

Mining in Africa’s developing countries holds tremendous revenue benefits for its citizens, such as payments to contractors and suppliers, purchases of locally manufactured goods and services, improved ports and roads, nuclear power, and maintenance and engineering – with nearly 25% of taxes derived from mining operations.

Mines offer the best wages and salaries as well as acceptable working hours, thereby significantly improving the quality of life for all nations in Africa.

Rizel Delano