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africa spotlight: First quantum minerals: rand refinery: Hawk Measurement Systems (HAWK ):

ISSUE No.14

keeping a level head A global leader in innovative level measurement systems

+ special report: Tanzania mining focus

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Business John O’Hanlon Editor johanlon@bus-ex.com Will Daynes Editor wdaynes@bus-ex.com Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com Richard Turner Director of Sales rturner@bus-ex.com Vince Kielty Director of Editorial Research vkielty@bus-ex.com

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Issue No.14

8

lead story

Where Is Gold Headed in 2014?

Mishka Vom Dorp of Sprott Global Resource Investments Ltd explains why he believes precious metals have sunk – and where they are headed next

africa spotlight: 14 interview

14

frank holmes

We talk to Frank Holmes, CEO and CIO of US Global Investors, about how Africa needs to evolve to continue attracting mining capital.

18 Event preview

mining indaba 2014

A special event preview on this year’s Mining INDABA 2014, where the world connects with African mining.

24 HAWK MEASUREMENT SYSTEMS Keeping a level head

A global leader in innovative level measurement through the development of unique, problem solving technologies.

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contents

30

30 Xcalibur Airborne Geophysics Delivering data from the air

Using industry leading technology to deliver geoscientific solutions to clients across Africa.

38 ATS Group

Mining marches on its stomach A niche facility management company that has identified and grown into its market.

48

48 Rand Refinery Responsible gold

The largest integrated precious metals refining and smelting complex in the world, and an ambassador for African gold.

60 First Quantum Minerals Ltd: Trident project A sustainable future for Zambia

First Quantum Minerals landmark Sentinel copper mine moves ever closer to commissioning and start up.

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Issue No.14

special report: tanzania mining focus 72 interview

72

The voice of Tanzania’s resources

Tanzania’s mining industry has made significant strides in exploration and mining development through the membership of The Tanzania Chamber of Minerals and Energy (TCME): now the organisation is casting its net more widely.

82 NDC Tanzania

The engine of growth

Tanzania’s National Development Corporation has the task of attracting overseas investment, on terms that will benefit the citizens of Tanzania as much as its partner companies.

90 at a glance

the vital statistics

Some key facts and figures about the mining industry in Tanzania.

92 atlas copco Tanzania First in mind and choice for Tanzania

A big name with a big global reach: here we look at the mining equipment and associated support, maintenance and ancillary services it offers in Tanzania and throughout East Africa.

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92

contents

102 SGS/AAL Tanzania Analysis for Africa

SGS is well rooted in Africa and is preparing to support Tanzania’s burgeoning resources sector.

112 shanta gold

gold from Tanzania

How Shanta Gold is delivering growing cash flow and developing its assets.

102

128 AngloGold Ashanti - Geita Gold Mine (GGM) Tanzania’s most productive mine

Managing Director, Michael Van Anen, talks about how the company intends to build upon its success.

138 Allied Mining Services Limited

Bringing the world to East Africa Allied Mining Services Limited continues to be a key contributor to East Africa’s growth.

112 128

146 seamic

Promoting responsible mineral development in Africa How the relevance of its services to both public and private sector interests continues to widen.

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Lead story

Where is Gold Headed in 2014?

Mishka Vom Dorp of Sprott Global Resource Investments Ltd explains why he believes precious metals have sunk – and where they are headed next Words by

Mishka Vom Dorp

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Lead story

D

uring a historic boom in equities, gold and gold equities have sunk to new lows with the GDX returning negative 55 percent over the past year.

Why have gold and other precious metals fared poorly while other equities, such as those composing the S&P 500, have seen average annual returns of nearly 30 percent?

Mishka Vom Dorp, who joined Sprott Global Resource Investments Ltd. in 2008, explained why he believes precious metals have sunk – and where they are headed next.

“With government debt, unfunded liabilities and the money supply reaching all-time highs, surely the gold price should be increasing as well?

“The answer is, I believe, that in the short term, gold has not yet had time to react fundamentally. Whether you follow the official government CPI figures or alternative methods of computing inflation, we have yet to see the double digit inflation figures of the 70s. There are two explanations that I believe are responsible for the lack of inflation that we see now but that we might see in the future.

“First and foremost, an increase in the money supply does not directly result in inf lation.

In fact, the correlation between increases in M1 – money held by the general public – and inflation becomes apparent only when the timeframe is extended beyond a five year period. Over this longer time frame, the correlation becomes almost perfect.

“Secondly, two thirds of the freshly printed greenbacks have not been released into circulation and are being held directly at the Fed in what are called ‘excess reserves.’

“The Fed has, so far, incentivized banks to keep cash there instead of lending it out by paying interest on the reserves.

Remember that the amount of un-lent capital held at the Fed is increasing on a year-to-year basis and rising interest rates would cause those reserves to snowball.

The Fed will eventually have to cut interest payments on excess reserves, thus releasing a large amount of capital into the financial system, leading to inflation if not enough GDP growth is there to accommodate the influx of new dollars.”

So rising interest rates could bring current levels of excess reserves down

“With government debt, unfunded liabilities and the money supply reaching all-time highs, surely the gold price should be increasing as well?”

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HERE’S WHY ONTARIO, CANADA

IS YOUR NEXT

BIG IDEA Opportunities for mineral exploration in Ontario abound. Powered by global leaders in innovation and safety standards, our mining practices are among the safest and most sustainable in the world.

With business costs lower here than in most G7 countries, Ontario suppliers are more competitive – so you can depend on quality goods and services, delivered on time, on spec and on budget. Innovation is at our core. Make Ontario your next big idea.

YourNextBigIdea.ca/Mining

$2.9B

in non-metallic minerals, including diamonds, was produced in Ontario in 2012

$2.6B in gold

$1.5B in copper

$1.4B in nickel

$787M

in other metals such as platinum and silver

Paid for by the Government of Ontario.

Lead story

“I would be devastated to have sat through this bear market this far with you only to have missed out when the picture finally shifted in our favor”

and boost inflation if the economy fails to deliver sufficient growth. Inflation may therefore rear its ugly head after all… As Mishka concludes, now is not the time to dump gold and precious metals equities.

“With a dwindling supply of juniors, continuing write-downs on assets by majors, and a continuing of easy money policies, I believe we are close to finding the elusive bottom to this bear market.

“The longer the bear market, the stronger the bull. Investments in

exploration and development of mineral deposits have fallen massively over the past three years. Mineral exploration is an extremely capital intensive business requiring billions of dollars in investments to find and develop large scale mines. With majors cutting their budgets across the board to bring down costs demanded by investors, it has been left to the juniors to ensure discoveries are made to meet current and future demand.

“Now that only a handful of competing resource investors are still around, we will have the ability to research, finance and invest in what we believe are the best companies without the need compete with an eager market.

“I would be devastated to have sat through this bear market this far with you only to have missed out when the picture finally shifted in our favor.”

Contact If you are interested in learing more about investment opportunities, please e-mail Mishka Vom Dorp at MVomdorp@sprottgobal.com or call him at 800.477.7853.

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Interview

Frank holmes On the eve of the 20th annual Investing in African Mining Indaba event, we talk to Keynote Speaker Frank Holmes, Chief Executive Officer and Chief Investment Officer of US Global Investors, about how Africa needs to evolve to continue attracting mining capital Words by

Will Daynes

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From an investment perspective, are there particular global trends, the high level of demand for gold in the Middle East and Asia at present for example, that give you encouragement for future growth in Africa’s mining sector?

The thing about gold that you have to remember is that there is actually very little physical gold around the world today. That is why in India, for example, gold is currently trading for around $1,600 an ounce.

Now, while this level of demand for certain commodities does bode well for Africa and presents a lot of opportunity, it is imperative that certain nations and political leaders show due respect toward long-term capital. When it comes to mining projects today, everything is agreed on the basis of a ten-year government guarantee, and one that provides companies with tax stability.

In a democratic society, such agreements mean that even when a new political party takes over the running of a country, they are bound to honour that ten-year model.

Without such a model in place a country just isn’t able to attract capital.

And is this a model that has grown in significance in Africa in recent years?

Indeed it has, because now you have more companies from North America and Europe looking at areas such as the Congo, for instance, where there is little in the way of social or economic stability,

and questioning whether the risk of moving capital to such a place is even worth it. These are the countries where, every time a new government is formed, they introduce new regulations and rules that dissuade investment. We call these ‘no-fly zones’.

Are there ways that African nations can try and avoid becoming no-fly zones?

If a country wants to attract capital for long-term infrastructure building and job creation, then their best course of action would be to adopt something similar to what you find in Mongolia today, which is known as a tax stability agreement. In the US we use the term ‘you can’t move the goalposts’ This form of agreement gives stability that those mining companies, who are literally tossing billions of dollars to get a mine up and running, demand today.

Bearing all this in mind, does Africa remain a promising destination for large scale future mining projects?

If you were to ask me if Africa is rich as a continent, then I would say of course, spectacularly so. Where Africa also benefits is the fact that it is one of very few destinations in the world that is growing rapidly without debt. It is a cash economy and those countries that have the most fiscal stability are the ones experiencing the strongest growth. In the US and Europe, we leverage to achieve growth, but they

“If you were to ask me if Africa is rich as a continent, then I would say of course, spectacularly so” 16 |

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Interview

“Once African countries have transparent policies in place that call for the building of things like airports, ports and hotels, then it can replicate these kinds of models for infrastructure building� don’t need to do that in Africa because they are operating from such a low base.

So that is where your opportunities are.

Are you able to reveal to us any of the themes or topics you plan to discuss at Mining Indaba 2014?

One of the things I plan to do is revisit an idea I put forward some years ago and that was that the dream of Africa should be to build a railway all around the border of the continent, one that measures some 25,000 kilometres. At the time I said that if you really wanted to unite the continent, then a super railway line should be constructed one kilometre from the sea all around Africa. Then, along that rail line, every 1,000 kilometres you come to a tax free port. The result of this would be a system that allows trade to move around the continent freely, thus creating an active economy of connectivity. I believe it was about eight years ago that I proposed such a radical idea so maybe now would be a good time to dust that off.

Looking at Africa today, what lessons can it learn from elsewhere around the world if it is to create an ideal environment for investment?

Another piece of the puzzle required is for money to be spent on building

airports. What the Chinese did, and this is something that Africa can definitely learn from, is they established tax free zones. From there they poured capital into the building of ports and a commercial railway, before moving on to airports and hotels. These airports immediately made it easier for people to fly in and out of the country to conduct business, and helped facilitate the export of goods out of the country.

Today we find China in the process of building a light rail network across 25,000 kilometres with trains travelling at 300 kilometres per hour. This is allowing the average person to travel across the country more easily than ever before.

This all comes back to the idea that it is only with the kind of fiscal stability that China has to make such projects a reality, that Africa can hope to achieve social stability. Once African countries have transparent policies in place that call for the building of things like airports, ports and hotels, then it can replicate these kinds of models for infrastructure building for their own long-term benefit.

For more information about Frank Holmes. www.usfunds.com

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EVENTS

Mining Ind

where the world connects with MINing indaba™ 3-6 February 2014 The Cape Town International Convention Centre, cape town, south africa Twenty years ago a new day dawned for both South Africans and for the mining industry on the continent. That year, South Africa freed itself from the grip of apartheid and established itself as a global beacon for democracy and growth. There was also a small group of people that came together (at the Cape Sun Hotel) with a shared vision

18 | BE Mining

for the acceleration of mining investment on the African continent and the Investing in African Mining Indaba™ was born. Twenty years later South Africa is still one of the best and brightest stories in the world and the Mining Indaba is the world’s largest and most revered mining investment event.

As Mining Indaba has expanded in scope and size, the mission of our organisation remains true – to serve as the focal point for capitalisation and development of mining interests in Africa. As the event has grown and evolved into a global deal-making

Special preview

daba

h african mining

Sustainable development at Mining Indaba Together with our partners we look to strengthen world class social licensing standards for African mining. This special and focused forum will arm delegates with the information and knowledge to support the implementation of sustainable development principles. Access to these sessions is included with your conference registration.

Tuesday, 4 February 16:59 – 17:39 Keynote Address: Fireside Chat with Paul Collier and Aidan Davy

Jonathan Moore, Senior Vice President & Managing Director, Mining Indaba LLC

platform – approximately 8,000 professionals from 2,000 international companies representing 110 countries in 2013 – so have our investments and commitments to the mining industry, South Africa, and the local Cape economy.

In 2013, we introduced our Mining Indaba bursary; a US$20,000 (approximately R192,000) investment in toward the future of our industry. In 2014, we will increase the bursary to US$30,000 (approximately R264,000) and will disburse to

Thursday, 6 February 08:40 - 08:45 Welcome Remarks Jonathan Moore MD, Mining Indaba, LLC 08:45 - 09:00 Opening Remarks Aidan Davy ICMM 09:00 - 09:45 Keynote Address: Archbishop Njongonkulu Ndungane 09:45 – 11:00 Panel Discussion: Mining and Communities: Moving From Conflict to Resolution 11:00 – 11:30 Coffee & Tea Break 11:30 – 12:45 Panel Discussion: Responsible Sourcing of Materials: Global Trends and Challenges 12:45 – 13:00 Conclusions – ICMM Representative

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EVENTS Conference Agenda Summary Saturday, 1 February 12:00 - 18:00

Registration Open

Sunday, 2 February 08:30 – 18:00 10:30 – 18:00

Registration Open 9th Annual Mining Indaba Golf Tournament at Pearl Valley Golf Course

Monday, 3 February 07:00 – 19:00 Registration Open 08:30 – 13:30 Special Presentations from the World Bank and Partners 09:00 – 12:00 Pre-Conference Workshops 12:30 – 19:00 Exhibit Hall Open – NEW OPEN TIME IN 2014 12:30 – 14:30 Securities Exchange Session – TSX 12:53 – 12:58 Welcome to Cape Town – Honourable Mayor Patricia de Lille 12:47 – 17:12 Commodities Outlook & Review Forum 13:30 – 15:00 Special Topic Workshop – Hosted by ENS 14:43 – 15:28 Keynote: Phil Newman 15:00 – 17:00 Securities Exchange Session – ASX 17:30 – 19:00 Welcome Reception in the Exhibition Hall

Tuesday, 4 February 07:00 – 18:00 Registration Open 07:30 – 18:00 Exhibit Hall Open 07:55 – 08:05 Opening Remarks – Jonathan Moore, Mining Indaba LLC 08:06 – 08:25 Official Welcome from H.E. Minister Susan Shabangu, DMR RSA 08:26 – 09:16 Keynote Address: Eleni Gabre-Madhin 09:17 – 16:58 Mainstage Corporate Mining Presentations (throughout the day) 09:15 – 13:23 Corporate White Paper Presentations (throughout the morning) 09:30 – 11:30 Securities Exchange Session – LSE 09:50 – 12:30 Non-African Government Presentations 12:26 – 13:25 Keynote Address: Hon. Colin Barnett MEc MLA, Western Australia

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Special preview

13:00 – 14:45 Networking Luncheon 12:30 – 14:30 Special Topic Workshop – hosted by KPMG 13:30 – 15:00 Securities Exchange Session – SGX 14:00 – 17:34 African Mining Ministerial Forums 1 & 2 15:30 – 17:30 Special Topic Workshop – Hosted by ERM 16:59 – 17:39 Keynote Address: Paul Collier in Conversation with Aidan Davy 17:40 – 18:30 Cocktail Reception 19:30 Official Mining Indaba Gala Dinner (invitation only) at the Vergelegen Estate

Wednesday, 5 February 07:30 – 18:00 Registration Open 08:00 – 18:00 Exhibit Hall Open 08:30 – 09:10 Keynote Address: Robert Friedland 09:11 – 09:51 Keynote Panel: Graham Briggs and Robert Friedland 09:15 – 13:40 Corporate White Paper Presentations (throughout the morning) 09:50 – 12:30 Non-African Government Presentations 09:52 – 16:53 Mainstage Corporate Mining Presentations (throughout the day) 12:00 – 13:45 Networking Lunch 14:00 – 16:00 Special Topic Workshop – Hosted by DuPont 13:45 –14:15 Keynote Address: Makhtar Diop 14:00 – 17:29 African Mining Ministerial Forums 3 & 4 16:54 – 17:35 Keynote Panel: David Hale and Frank Holmes

Thursday, 6 February 07:30 – 12:00 Registration Open 08:30 – 13:00 Exhibit Hall Open 08:40 – 13:00 Sustainable Development at Mining Indaba 13:00 20th Annual Mining Indaba Concludes

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EVENTS

7,800+ Number of attendees in 2013

four South African students who are pursuing a career in mining. This year the Mining Indaba will once again be the catalyst for millions of dollars of revenue for the local cape economy. As the mining world descends on Cape Town every February,

KEYNOTE SPEAKERS

Phil Newman

H.E. Susan Shabangu

Eleni GabreMadhin

Chief Executive Officer CRU Strategies

Minister of Mineral Resources Republic of South Africa

Chief Executive Officer Eleni LLC

Monday 3 February 14:43 – 15:28

Tuesday, 4 February 08:06 – 08:25

Tuesday, 4 February 08:26 – 09:16

Hon. Colin Barnett MEc MLA Premier; Minister for State Development; Science Government of Western Australia Tuesday, 4 February 12:26 – 13:25

Paul Collier Professor of Economics and Public Policy, Blavatnik School of Government; Director of the Centre for the Study of African Economies University of Oxford Tuesday, 4 February 16:59 – 17:39

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Special preview the city’s worldclass attractions, hotels, and restaurants are fully booked for one week by powerful deal-makers. Most importantly, Mining Indaba and its African partners serve as the conduit for the infusion of millions in foreign direct investments into the mining value chain...a crucial element for accelerating mining on the continent.

Now we begin a new decade where the futures of the continent, our host country of South Africa, and the Mining Indaba are all very bright. As you will see in the pages that follow, the annual Mining Indaba continues its tradition of bringing

together global game changers on economic policy, investment strategies, commodities research, and the world’s leading mining houses. We look forward to welcoming more of the world to Mining Indaba in February 2014 and give thanks for the support of regional government, our sponsors, and professionals who have helped make this event unlike any other.

For more information about Mining INDABA 2014 visit: www.miningindaba.com

Robert Friedland

Graham Briggs

Makhtar Diop

David Hale

Chairman Ivanhoe Capital Corporation

Chief Executive Officer Harmony Gold

Vice President for Africa World Bank Group

Founding Chairman David Hale Global Economics

Wednesday, 5 February 08:30 – 09:10

Wednesday, 5 February 09:11 – 09:51

Wednesday, 5 February 13:45 – 14:15

Wednesday, 5 February 09:11 – 09:51

Wednesday, 5 February 16:54 – 17:35

Frank Holmes

CEO and Chief Investment Officer U.S. Global Investors, Inc. Wednesday, 5 February 16:54 – 17:35

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HAWK MEASUREMENT SYSTEMS

Keeping a level head Hawk Measurement Systems (HAWK) has become a global leader in innovative level measurement through the development of unique, problem solving technologies

edited by: will daynes research by: Gareth hardy

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Reliable boom height control. Immune to dust, fog, rain and repose angle changes

HAWK MEASUREMENT SYSTEMS

M

any level applications pose problems for process level equipment and technologies.

Whether the industrial site is a mine, power generation facility, or cement plant, they all require technologies that will withstand tough environmental conditions as well as the harsh nature of the applications.

HAWK has developed unique technologies to overcome traditional problems associated with applications in the markets it serves.

HAWK uses Acoustic Wave technology.

These products distinguish themselves from traditional ultrasonic and radar level products by combining low frequency, high power and adaptive gain technology. This enables you to measure even the most difficult level applications, such as, primary crusher surge bins, process sumps, process slurry tanks, and stockpile level control, which suffer from dust, condensation, froth and foam.

The Gladiator Acoustic Switch uses Acoustic Wave technology in a new sender/ receiver form for blocked chute detection and anti-collision for heavy machinery.

HAWK’s Acoustic Wave Transducers are selfcleaning. The Acoustic Switch is designed for continuous operation in dusty, wet environments where other technologies fail.

The power of each pulse (pressure wave) blows the water, moisture and build-up off the face of the diaphragm.

The High Powered Gladiator Microwave Blocked Chute technology uses a beam of microwave energy passing from a sender to a receiver. If the path between

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“Backed by a 24 month Application Guarantee, our technical staff evaluate all aspects of your project needs to deliver a measurement solution you can be confident in�

Non-contact stacker boom protection

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HAWK MEASUREMENT SYSTEMS

Hawk microwave system used to replace high maintenance lanyard switches

the sender and receiver is blocked by any object or material which absorbs or reflects microwave energy, the receiver will not be able to detect the signal. The presence or absence of the signal at the receiver is used to switch a relay for indication or control purposes. This product is typically used for blocked chute detection on conveyor transfer chutes, stacker/reclaimer protection boom protection and Shiploader protection, hi / low level alarm for crusher and bin service, truck/machine detection.

HAWK has also developed the ORCA Sonar Bed Level Transmitter used to control compact bed level/hindered layer level to maximize the efficiency and performance of tailings thickeners, CCD’s,

hi-rate thickeners, Lamella thickeners and clarifiers. By controlling the compact bed level and monitoring the hindered/interface layer the HAWK ORCA sonar is used to maximize efficiency and performance by monitoring real time settling conditions.

Backed by a 24 month application guarantee, our technical staff evaluate all aspects of your project needs to deliver a measurement solution you can be confident in.

For more information about Hawk Measurement Systems visit: www.hawk.com.au www.hawkmeasure.com

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30 | BE Mining

Xcalibur Airborne Geophysics

Delivering data from the air With its pilots at the controls of its reliable, robust fleet of aircraft, Xcalibur Airborne Geophysics is using industry leading technology to deliver geoscientific solutions to clients across Africa

written by: Will Daynes research by: James Boyle

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I

n a little over ten years, South Africa based airborne geophysical company, Xcalibur Airborne Geophysics has successfully collected over three million line kilometres of low level data for its client base of major mining companies and junior exploration businesses. Specialising in ultra-high resolution and standard airborne surveys, utilising gradient magnetics and radiometrics, time-domain electromagnetics and gravimetry, Xcaliber’s fleet of robust turbine Air Tractors, BN-2T turbine Islanders, Jet Rangers and Eurocopters have since been operational throughout the African continent.

“Since its formation in 2002,” explains Chief Geophysicist, Tiaan Le Roux, “the company has grown from a small team of about four or five people to one that today employs just under 20 individuals, including geophysicists, data processors, engineers, pilots, field operators, and support personnel.”

Originally founded by Billy Steenkamp, Xcalibur today possesses a team who collectively offer more than 100 years of managerial and practical experience in fields including exploration geophysics, aviation, business management, electronic engineering, and airborne survey operations.

The company’s pilots are some of the most experienced in their field, amassing thousands of flying hours between them.

The aforementioned fleet of aircraft at these pilots’ disposal are unique in that they enable Xcalibur to collect data at the lowest ground clearance that is possible within operational safety constraints, typically between 20 and 40 metres. Flying at such altitudes provides for better spatial resolution

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Xcalibur Airborne Geophysics

and data signal-to-noise ratios, thus resulting in significantly more detailed information for kimberlite detection, base and precious metal exploration, litho-structural mapping and environmental or mine planning applications.

“We recognise the fact that we are very much a company delivering a niche service, and what we take great pride in

is delivering excellent quality products in the most cost efficient way possible,” Le Roux continues. “The technologies that we employ are among the most advanced and modern of their kind and are mounted on airborne platforms that are really robust and conditioned for use in Africa. These aircraft are characterised

“Xcalibur Airborne Geophysics has successfully collected over three million line kilometres of low level data for its client base”

Hi-Res Fixed-Wing Surveys

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Xcalibur Airborne Geophysics

Hi-Res Helicopter Surveys

by their endurance and low data quality is maintained. maintenance costs, which High sensitivity wingtip helps drive our costs down. mounted or boom mounted Ultimately we pass these magnetometer sensors and state of the art multi-crystal savings onto our clients The year Xcalibur together with quality data.” pack spectrometers are used Airborne Geophysics The airborne platforms to measure exceptionally was established small variations in horizontal that Le Roux speaks of are magnetic gradients and equipped with state of the art navigational, positioning natural radioactive emissions.

Xcalibur’s geophysical ser vices, and geophysical equipment. The Differential Global Positioning System (DGPS) allows individually trademarked as the Xtract, the for accurate positioning of better than one Xgrad and the Xgrav Systems, are further metre, while the navigational system allows boosted by the company’s value add data for accurate dynamic navigation along pre- processing and interpretation Xval service. determined flight paths, which will ensure that “This particular service aims to offer

2002

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“Xcalibur’s technology and efficient services have consistently produced first class results time and again” our clients a more complete package of services,” Le Roux states. “Rather than simply acquiring the data and passing it back to our clients, our own extensive geophysical and geological experience means we can offer consultancy services that cover a wide range of methodologies and applications with the

36 | BE Mining

view to properly integrate the information we collect with other geoscientific data.”

Xcalibur’s technology and efficient services have consistently produced first class results time and again. It is this level of consistency that has seen the company being awarded numerous projects by a wide range of major

Xcalibur Airborne Geophysics

mining and exploration companies, junior and government organisations. Such projects have allowed Xcalibur to prosper where others have struggled during the recent difficult times for the mining community.

In the coming months Xcalibur will be moving forward with the introduction of its newest solution, the XtractEM System.

“There is a strong demand in the market today for combined high resolution magnetics and electromagnetics,” Le Roux says. “The reason for this is that some of the targets of our airborne applications only have very subtle magnetic signatures. By acquiring electromagnetic data, in addition to

magnetics and radiometrics, one can often not only confirm these targets, but also better delineate and characterise them, which gives clients the confidence needed to follow up and drill these prospects.”

While completing and testing the new XtractEM System, Xcalibur will continue to build upon its growing reputation for delivering first class results and services to its clients.

For more information about Xcalibur Airborne Geophysics visit: www.xagsa.com

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38 | BE Mining

ATS Group

Mining marches on its stomach Allterrain Services (ATS) Group is a facility management company but that statement tells only half the story, if that: this is a company that fills its niche as a hand fills a glove – it has grown into its market and is identified with it

written by: John O’Hanlon research by: Richard Halfhide

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ATS Group

A

TS started life in 1996 by plugging a hole in the market.

A Canadian minerals company working in Ghana and other African countries found it impossible to get the support it needed at its remote sites – like an army, an exploration company marches on its stomach. It hired an experienced facilities manager Jez Simms to meet its immediate needs, with such success that the unit quickly grew into an entity in its own right, taking its first outside contract in 1997.

Next came a merger with Oasis Management also founded in 1997 as a hospitality company

by Sanjay Narain and Martin Ryan which resulted in ATS Group being spun out as an independent company in 1998 under the management of its founders who are all still actively involved in the company.

Sanjay Narain is the CEO of the group and his vision has driven every stage of its development to a point where it has a presence in 14 African countries and more than 4,000 employees. “It has been a story of steady growth,” he says. “We have partnered with most of the big names as well as with junior mining companies on their projects, and in the last three years we have made significant inroads into the oil and gas sector.” Wherever there is a company that needs to outsource its non-core business ATS is ready to step in. Mineral production and exploration are highly specialised: so is feeding the workforce.

ATS started as a foodservice organisation but quickly grew to provide other equally important facilities from accommodation management to leisure facilities management - even swimming pools. Non-food activities

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now account for 40 percent of its turnover.

Every project starts with a small camp for a short term drilling campaign, but as we have frequently seen this can end up five or ten years later with a mine in production – employing many people and with a lot of infrastructure needed to support it. At one end ATS offers a simple deal whereby it supplies catering and perhaps staff for specific jobs like gardening or housekeeping. Year later it provides a complete service, operating the entire camp, maintaining buildings and infrastructure and effectively outsourcing all non-core activities for the customer.

This approach is at the heart of ATS’s Customers for Life approach. It has contracts today that date back to 1999 and has a client list that looks like a directory of Africa’s mining and O&G players. Majors such as AngloGold Ashanti, Barrick, First Quantum, Newmont; O&G sector specialists like Tullow Oil, ENI, Baker Hughes and British Gas; growing companies like Shanta Gold, Endeavour Mining and Newcrest; and service providers such as Lycopodium, Schlumberger, DRA and Geodrill: all these and many more place their trust in ATS for the very good reason that it allows them to outsource essential but noncore aspects of their business.

Global facilities management companies are waking up to the opportunities that Africa presents, Narain admits, but their origins are

in New York or London, a far cry from the untouched parts of Africa. “A few years ago there were only a couple of people tendering on jobs now it can be nine or ten,” says Narain.

“But we welcome this because it confirms that our market is becoming established.” His USP is the way ATS understands the challenges, having operated in DRC, Côte d’Ivoire and other countries through troubled times. It understands how to work at a distance from urban centres: its longest current supply route is in Liberia, a 15-hour journey from

“We have partnered with most of the big names as well as with junior mining companies” 42 | BE Mining

ATS Group

Dining mess ready for service

Monrovia! “When a project Takoradi. “Our market is subSaharan Africa,” he says. starts we are among the first people to get to the site, In 2014 he would like to see the work he does in East well before any construction starts, so we will normally be Africa expanding. Kenya, ATS employees in Africa on site with the security crew, where the company opened working out of tents without last year, has many openings, and Tanzania is poised to hit any facilities in place.”

Mining is the client base ATS really the big time in both minerals and offshore understands, and there’s plenty of room for gas, and ATS is already working with Shanta growth within that sector, confirms Narain, Gold and, with British Gas, at the southern oil though its skills are applicable in many other port of Mtwara. It has also just commenced its sectors. The company is putting a lot of first significant contract in Mozambique. “We effort into developing O&G clients, whether are also looking forward to getting back into the work onshore or in the waters off West Nigeria,” he says. The government there has and East Africa: in these cases it handles the focused all its attention on oil and neglected operational bases of the companies working the mineral wealth in this huge country, but at sea – for example at Ghana’s oil port that will change over the coming five years.

4,000

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“Every time we involve a local business in food distribution it creates three or four jobs” With a new partner in place, he hopes to set up a subsidiary in the course of 2014.

ATS’s modus operandi is to select a strong and engaged local partner in any country it enters, retaining a significant shareholding up to 50 percent. The model of partnership is at the heart of the ethos of this business, and that is why it places a huge emphasis on its community engagement.

Social responsibility runs in ATS’s veins – it depends on local suppliers and needs them to succeed. That is why it looks on them as

44 | BE Mining

a part of its own business. “CSR is one of the mining industry’s highest priorities, and we can be right at the centre of the client’s strategy,” declares Sanjay Narain.

ATS has a policy of local sourcing, and it uses a lot of food, 22 percent of which is bought from the community around the site – a spend it estimates at $6 million a year. That in itself creates jobs, and as 90 percent of its direct employees come from the same community, the positive impact is huge. Whereas an NGO might fund a tomato

ATS Group

Community development

growing programme, ATS provides a market on the grower’s doorstep, and compels him to meet the highest food production standards – this is a challenge at first but in the end creates a sustainable business that can go on to sell its products in other local and even international markets.

“Every time we involve a local business in food distribution it creates three or four jobs,” Narain points out. A good example is Nana Bra’s mushroom farm close to Gold Fields’ Damang mine in Ghana. This business is the sole supplier of mushrooms to ATS in Ghana, with production of more than 2,000 bags per season. “We have community engagement officers looking for partners that have the entrepreneurial spark! We provide the market, training in best practice, financial advice and

the like. Some of these projects start with a turnover of a few hundred dollars but grow into $150,000 businesses over time.”

This is happening across Africa wherever ATS is present. In Zambia, for example, James Bright Mubanga started out by supplying 2,000 doughnuts a week from his premises, a thatched hut. Now with ATS support his business is in a modern building with the capacity to produce and supply 10,000 doughnuts to ATS per week. Not only was Mr. Mubanga able to employ twelve young people from surrounding communities, who earn their livelihood from this business, but he’s now planning to extend production to other bakery products.

Last year Barrick awarded ATS a worldwide award for its community

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Electrical maintenance

ATS Group projects in Zambia where ATS Zambia is contracted at its Lumwana mine to provide industrial catering, events coordination, housekeeping, landscaping, accommodation management and facilities maintenance. Of 438 employees in Zambia 95 percent are Zambian nationals, says Narain.

Many of these will be new to the food industry, unfamiliar with sophisticated kitchen equipment let alone international standards of health, safety and hygiene. ATS is accredited to ISO 22000:2005 standard and was the first African catering company to gain ISO 22000:2005 certification, which ensures traceability in the foodchain. In 2013, ATS achieved OHSAS 18001 certification for its maintenace operations in Ghana.

ATS was the first Catering company in East, Central and West Africa to gain HACCP (Hazard Analysis Critical Control Points) certification in 2008. To reach and maintain these standards involves a great deal of training not only of ATS staff but of vendors as well. When it sets up a new project, of any scale, the company will hire or build a facility and set up a training school. “We have a whole range of training programmes, using the latest interactive video and DVD materials.”

Sanjay Narain says. This is managed through the Group’s long term subsidiary Oasis Management, which specialises in training and compliance.

For more information about ATS Group visit: www.atsgroup.net

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Resp

As the largest inte the world, Rand responsibili

48 | BE Mining

Rand Refinery

ponsible gold

egrated precious metals refining and smelting complex in d Refinery founded at Germiston in 1920, carries a great ity to the industry and is an ambassador for African gold

written by: John O’Hanlon research by: David Brogan

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Rand Refinery

H

oward Craig was brought in from the oil and gas industry over three years ago: his mission to breathe new life into one of South Africa’s key businesses.

Rand Refinery, since 1967 the sole producer of Krugerrands and gold bars destined for the bullion banks of the world along with gold bars, is the pipeline to the market for the greater part of Africa’s gold doré – the semi pure product from the mines. Two of the largest gold mining companies in the world AngloGold Ashanti and Gold Fields between them own over 80 percent of the company: the remaining shares are held

by DRDGOLD and Harmony.

After 90 years the company found itself with sound but outdated processes and equipment, and faced new realities as well as changes in the global market for precious metals and the products made from them.

“The first thing that needed doing,” he says, “was to establish where the company was headed, then decide what should be done to get there.” It was clearly important to make the operations sustainable: much of the technology used in the refinery itself, the smelter, the mint and the assaying operations was outdated. The shareholders were keen to invest in automation, and the brand was ripe for a makeover.

It was, he says, every CEO’s dream, and today his relish for the task remains palpable. The intervening years have been spent putting this policy into practice, acquiring the best available technology and at the same time matching the company’s skills levels, enabling systems and culture to create a new brand identity that,

BE Mining | 51

while retaining the core competence of refining, would be ‘instantly recognisable as a symbol of infinite quality, sophisticated simplicity and unquestionable integrity.’

Though the market for gold and precious metals has shifted eastward in recent years, it is still centred in London, where in May this year alone gold to a value of $39.8 billion was traded, and $3.28 billion of silver. This trade is handled by the London Bullion

Marketing Association (LBMA), with which Rand Refinery has been accredited since its inception in 1920. In 2004, that relationship was elevated when Rand Refinery was appointed one of five referees that monitor LBMA’s Good Delivery standard introduced in 2001, and authorise new refineries to trade, set the standards for the market and evaluate them technically.

There are just five Good Delivery referees

“Wherever you look the mining houses are investing large sums in social, health and education programmes” 52 | BE Mining

Rand Refinery

2004 Year Rand Refinery was appointed a LMBA Good Delivery Referee

in the world and Rand Refinery is the only one in the southern hemisphere. It was a huge testament to the standing of the company and its reputation in the industry. “Being an LBMA Referee is something we cherish,” says Craig, “but it brings with it a massive responsibility. We have to make sure our own technical standards are at the very top of the tree, and always set the benchmark for honesty and integrity in the industry. We look on that reputation as a gift from our former employees and management over the years, and we nurture that heritage and aim to pass it down to the next generation.”

Till last year only the bullion banks could be full members of LBMA; refineries had associate membership. However in May 2012 the five referee companies were admitted as full members, a singular honour.

He talks about the responsibility of LBMA membership, and it is true that a lot of pro bono work and travel is involved. That is not a problem for Howard Craig. One of the key roles of the referees has been to develop with the LBMA a set of guidelines on responsible gold. Since January 2012, the LBMA requires that all Good Delivery gold refiners comply with the LBMA Responsible Gold Guidance, formulated to ensure that conflict gold, or

BE Mining | 53

gold produced using unsafe practices, child labour or human rights abuses did not enter the supply chain. As the processor of up to 80 percent of all the gold mined in Africa Rand Refinery took a proactive part in the process. “We got in touch with the World Gold Council to understand the miners’ point of view, the OECD which had published its own guidelines, and, for the downstream trade, the Responsible Jewellery Council.”

There’s an element of self interest here, he admits. The concept of conflict gold has its roots in Sierra Leone and the DRC, but it is vital that the whole of African doré production is not stigmatised. Rand Refinery has long had its own systems to monitor its customers and track every batch they send, using third party auditors to check its own processes. “We can therefore not only say that we have met the LBMA Responsible Gold

“We are replacing our silver circuit with a completely new one, using best in class technology always with a high degree of automation”

54 | BE Mining

Rand Refinery

Guidance but that we can ourselves certify the origin of every ounce of gold we receive and that we have followed the whole train of custody from source to our refinery.”

Neither is it enough to show that African gold is overwhelmingly ‘responsible’ as defined by the guidelines. By and large these certify where it has not transgressed. He is keen to tell the untold story that presents gold production across the continent as a force for good. “Wherever you look the mining houses are investing large sums in social, health and education programmes – they are in fact investing in Africa’s children. The fight against malaria and HIV/ AIDS, deficiency diseases and poor hygiene

goes hand in hand with school building, sanitation and clean water programmes and local agriculture schemes to paint a positive picture that opposes the cases of exploitation that do undoubtedly still occur.”

Turning the role of policeman into a marketing opportunity was a short step. In May this year Rand Refinery launched its RandPure brand to augment the finished products it makes at the refinery. Not only are these products certified under the WGC and LBMA guidelines as being traceable and free from conflict gold, but they are also certified as coming from virgin gold doré. That means they do not contain any recycled or scrap gold whose provenance is

BE Mining | 55

harder to trace. That pleases the downstream market, and the miners like it too, because it ensures that their WGC certified conflict free bars don’t get mixed up with ‘grey’ gold at any point down the line – in other words the logistics chain is as responsible as the production and refining streams.

The launch of RandPure was part of a broader strategy, Craig explains. “One of the things we quickly realised when looking at our strategy after my arrival was that Rand Refinery had not launched any new products in about ten years – maybe longer. We were missing some key classes of

56 | BE Mining

product. One was minted products – the high end investment bars that normally come, beautifully designed and stamped, in fine packaging with tamper-evident seals. We also said there was an opportunity in jewellery products, and both these types of product can be branded RandPure.”

The company invested in setting up a minted product line which can mint both bars from 100 down to two grammes as well as coins. It then started to set up a global distributor network to ensure there were robust marketing channels for these products.

To penetrate the European market Rand

Rand Refinery

“Rand Refinery’s RandPure brand is the only gold product that can claim complete knowledge of the source doré through to the fabricated product” Refinery set up an exclusive distributorship with a Geneva company called International Gold Trust (IGT). The distributor’s own account is a measure of Rand Refinery’s standing. “This exclusive appointment provides IGT with the world’s highest quality

gold ethically sourced and provided by a refiner whose integrity and market standing is unprecedented. Rand Refinery’s RandPure brand is the only gold product that can claim complete knowledge of the source doré through to the fabricated product. At no point in time does the metal leave the control of Rand Refinery giving a unique product to the consumer – responsible gold sourced from the earth, not from recycled products.”

Also in May Rand Refinery appointed Dallas-based Dillon Gage Metals as its exclusive distributor in North America.

For the minted products, a trading team was set up in Singapore two years ago to explore the very large market that exists for gold products in India, China and East Asia. To be able to supply the anticipated demand this will generate, new equipment for producing minted products has been installed, and cast bar production lines at Germiston have been modernised and its level of automation increased using state of the art robotics.

Alongside its launch of the RandPure brand and the new range of options for customers to invest in gold came the announcement in May of a jewellery range produced in partnership with South Africa’s largest jewellery manufacturer OroAfrica. Since RandPure can only apply to gold manufactured under

BE Mining | 57

Rand Refinery direct control of Rand Refinery, OroAfrica set up its own facility within the refinery. The range, starting with rings and sold under a new brand name, Absolute, are expected to sell very well in the markets where it is available, currently South Africa, Canada and the USA and Hong Kong – and customers can be confident they are buying certified virgin gold, responsibly mined and containing no scrap of untraceable material.

Investment will continue till all parts of the refinery have been thoroughly modernised.

“We are replacing our furnaces shortly, and replacing our silver circuit with a completely new one, using best in class technology always with a high degree of automation.”

The refinery’s smelter, he adds, will be a major driver for growth in the years ahead.

With an annual capacity of 1,500 tons, it uses a pyro-metallurgical process to concentrate low grade materials into a semi concentrated product that is further purified at the main refinery. Additionally it has a recently added copper circuit that can produce up to 500 tpa of copper cathode from the scrap feed, much of it from Asia. To streamline the process Rand Refinery has now set up an assaying facility in Singapore, to give its Asian customer a same-day service and much faster payment. In the coming five years, he hopes, local in-country pre-treatment facilities could speed up the supply of recycled gold and silver to the main refinery.

For more information about Rand Refinery visit: www.randrefinery.com

BE Mining | 59

A sustainable future for Zambia 60 | BE Mining

First Quantum Minerals: Trident project

As its landmark Sentinel copper mine moves ever closer to commissioning and start up, First Quantum Minerals Ltd is also ramping up its efforts to deliver a long lasting sustainable legacy to the people of Zambia

written by: Will Daynes research by: Richard Halfhide BE Mining | 61

A

s is typical of First Quantum, the project is doing very well and is progressing on-time and to budget.” Those were the words of John Gladston, Trident Resource Optimisation Manager, when we spoke during the summer of last year. The project he was referring to was of course the Trident project, the largest single project investment in Zambian history.

Now with 2014 well under way I find myself receiving an update on the project from Deputy General Manager, Tristan Pascall, and the message is very much the same. “The dry season that runs from March to around November in Zambia presented us with a major opportunity to leap ahead with our activities,” he says. “Come the end of December the project was at approximately 74 percent completion and that matches up with our schedule and our budget very well.”

Located almost 150 kilometres west of Solwezi in north-west Zambia and containing five mining licences over some 950 square kilometres, the Trident project encompasses both the Sentinel low grade copper mine and the Enterprise nickel mine. The Sentinel processing facility of the former will have a target throughput rate of approximately 55 million tonnes per annum of ore at an average grade of 0.5 percent copper. It is estimated that the mine will ultimately provide an annual production rate of around 280,000 up to 300,000 tonnes of copper, with its mine life estimated to be in excess of 15 years, and with possibilities to increase with future successful brownfield exploration.

A strong year of productivity in 2013 has

62 | BE Mining

The Sentinel process plant will produce 280,000 to 300,000 tonnes of copper per annum at full capacity

First Quantum Minerals: Trident project

$6,335 Sentinel’s approximate capital cost per installed annual tonne of copper production

First Quantum has been working with the Zambian Ministry of Health to combat malaria in the communities around the Trident project

64 | BE Mining

seen the company reach a point where it has now placed some 96,500 cubic metres of concrete and put up around 9,100 tonnes of steel across the project site. At the end of December more than 13.4 million man-hours had been completed on the project, against a lost time incident (LTI) rate of 0.06.

The mining fleet at Sentinel has come along leaps and bounds in the last six to twelve months with the first truck, a 250 tonne capacity 860E Komatsu vehicle, receiving its first payload. The first 330 tonne 960E Komatsu truck was recently rolled into the completed fleet maintenance shed as well.

Similarly a Komatsu PC5500 unit, the first of three units, has been released for work and the first of three CAT/Bucyrus 7495 is close to commissioning. A number of other important parts of the fleet have and continue to be delivered on a daily base from First Quantum’s contractors and suppliers.

Meanwhile, from a construction perspective, work on Sentinel’s second two trains of 40 foot diameter by 26 foot length (28MW) SAG and 28 foot diameter by 44 foot length (22MW) ball mills continue to gather pace with the Gearless Motor Drive windings recently installed within SAG mill 2, whilst rubber lining of ball mill 1 is now underway.

First Quantum Minerals: Trident project

Minimal numbers of contractors are used at Sentinel, rather First Quantum employs skilled overseas artisans who train local staff on the job

The company has also commissioned the site’s four one megawatt power gen sets, which are now providing site reticulation of construction power. The units will also provide the permanent back up power facility for the site when Sentinel is connected to the state-owned power company ZESCO. Foundations for the first 19 towers for the 68 kilometre power line to connect Sentinel with

the main ZESCO grid at the Lumwana mine have been installed, and the line is expected to be commissioned by June 2014.

In the housing area all 600 concrete slabs have been completed for employee housing, which will be offered to local staff for purchase under an affordable mortgage scheme. More than 60 of these houses are now occupied.

In addition the team has completed roofing

“Come the end of December the project was at approximately 74 percent completion and that matches up with our schedule and our budget very well” BE Mining | 65

“First Quantum is one of the biggest contributors to corporate social responsibility initiatives in the country” works on all 84 senior houses, and more than 30 houses and 40 singles quarters have been released for occupation “Another major step forward for the project in the last year has been the receipt of full environmental approvals for all works outstanding at the main Sentinel project,”

66 | BE Mining

Pascall states. “In particular these approvals cover the sites’ process water dam, tailing dam and various resettlement areas. This is an important step forward for the project and means we can now set our sights on achieving the same approval for the Enterprise mine.”

As Business Excellence has covered

First Quantum Minerals: Trident project

The 14km pipeline to the Chisola Dam will supply process water to the plant

previously in some detail, First Quantum has fast-established itself as a hugely important contributor to the upward social development of Zambia and one that endeavours to highlight its own commitment to sustainability through actions as well as words.

“Today 4,700 people are employed at Sentinel, 82 percent of whom are Zambian,” Pascall continues. “Of these 3,800 local staff, roughly 1,700 come from the country’s North Western Province, with around 750 from the villages that lie on our doorstep.

This underlines the impact the construction of the mine has had on local employment, while on a country-wide scale we remain one

of the biggest tax payers, paying out more than $2 billion to the Zambian government in the time that we have been here.”

In addition to tax and revenue generation First Quantum is also one of the biggest contributors to corporate social responsibility initiatives in the country, investing in excess of $20 million on various entitlement and community upliftment programmes across the area surrounding the mine. “These programmes include the rebuilding of four rural health centres, the construction of a police station for the local force, two new schools and the renovation of the District General Hospital,” Pascall says. “We

BE Mining | 67

“We feel we have the right people in place and they will continue to be supported by a fantastic Zambian workforce�

The crushed ore stockpile at Sentinel has 80,000 tonnes of live capacity and is roughly the size of Lusaka football stadium

68 | BE Mining

First Quantum Minerals: Trident project also continue to promote conservation farming and this work has seen local farmers successfully increasing their yields by up to 250 percent through better management and access to inputs such as lime and fertiliser.”

It was also during 2013, April to be exact, that First Quantum formally submitted its application for the area under construction around the mine site to be classed as a Multi-Facility Economic Zone. “In the time since then we have received some good initial The Sentinel workforce have been employed from across the country feedback from government,” including more than 1,750 from North Western Province Pascall enthuses. “While such an initiative doesn’t benefit the mine launched with the local community to directly as such, what we want it to do is protect neighbouring forests and the valuable encourage people to come in and invest in ecosystems they support. Once we begin to this region, so it is really about promoting create revenue from Sentinel we anticipate local procurement and local business that such programmes will expand further.” development. This application continues to For all of the company’s achievements in move forward and we excitedly await the 2013, 2014 is poised to be an equally, if not government’s next move.” more, momentous year for First Quantum This all plays into First Quantum’s desire to and the Trident project as the operation leave behind a long-lasting positive legacy in moves towards commissioning and start-up. the region that far exceeds its own presence Upon start up the company expects to have and that of the mine site. “Our work here the required power available from the is far from over and we have several other single circuit 330kV power line to Lumwana programmes that we are hopeful of getting which is adequate to run one of its two under way in the near future, as well as milling trains. Full power is then expected some that are in their infancy,” Pascall to be in place by the end of the year from enthuses. “Such projects include a Joint Forest a longer twin circuit 330kV power line via Management initiative that we have recently Mumbwa and that in itself will be a massive

BE Mining | 69

A view over the flotation area of the plant towards the copper concentrate building and storage shed

First Quantum Minerals: Trident project milestone for the project. The timing for full commercial production during 2015 will depend on the ramp up at Sentinel and that of the new smelter being built in Solwezi also

by First Quantum.

“We are very happy with the progress we continue to make on the project,” Pascall says. “At a forecast capital cost of $1.9 billion, Sentinel’s capital cost per installed annual tonne of copper production is approximately $6,335 and that is worldleading compared to other projects under development in the industry.”

The market has indeed responded well to the developments being made by First Quantum, particularly now that much of its key operations staff are in place, including the Mine Manager, the Engineering Manager and the Training Superintendent for the incoming mining fleet operators. “We have assembled a quality team ready to take the project into commissioning and into its first years of operations,” Pascall concludes. “We feel we have the right people in place and they of course will continue to be supported by a fantastic Zambian workforce who have consistently shown themselves to be extremely productive, motivated and a great example to the rest of the country about what can be achieved here.

We will now look to utilise this workforce as we move into a new phase of operations, one that I believe will highlight how well placed we are for the future.”

For more information about First Quantum Minerals: Trident project visit: www.first-quantum.com

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tanzania

mining focus

special report

sponsored by:

Interview

The voice of Tanzania’s resources Tanzania’s mining industry has made significant strides in exploration and mining development through the membership of The Tanzania Chamber of Minerals and Energy (TCME): now the organisation is casting its net more widely Words by John O’Hanlon Research by Candice Nice

Special Report

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Interview

T

he Tanzania Chamber of Minerals and Energy was established in 1994. At that time, says its Chairperson Mr Joseph K Kahama, it was felt that a forum was needed where private sector companies could come together to tackle common challenges and see how best to mitigate any concerns and problems.

Initially just called the Chamber of Mines, the remit of the organisation was later broadened to allow the increasing number of oil and gas exploration companies to share its benefits – today the membership includes not only project developers but also the companies that provide them with technical and support services.

Though Joe Kahama has been in his present role for just 18 months he has clocked up a number of years on TCME’s Executive Council. He is also Chairman and Chief Operating Officer at Tanzanian Royalty Exploration Corporation, a gold developer that was among the Chamber’s founding members. He served as VicePresident of the China-Africa Business Council, Tanzania Chapter between 2006 and 2009.

TCME, then, is committed to promoting the sustainable growth of the mining sector in Tanzania for the benefit of mining companies and Tanzanian citizens alike. It is very much into driving forward the adoption of best practices in health and safety as well as environmental

responsibility and skills development.

However maintaining close and cordial relations with government is one of it foremost priorities, says Kahama: “We have our own challenges as private sector operators, to ensure that we continue to create wealth for the shareholders, while the government has to ensure that it benefits from investments by the private operators. As a Chamber, since mining is relatively new to Tanzania, we have a role to educate the public about the industry and how it operates.”

He would like to expand the Chamber’s role in dealing with emerging issues such as labour, the environment, corporate social responsibility and resource nationalism. “Addressing these issues calls for a strong and efficient Chamber that will protect the interests of its members and help the mining industry to grow. Our vision is to ensure that our industry will be a role model in leading the way to a successful Tanzania.”

So TCME needs to go beyond being a forum and become much more proactive, he believes. “I am trying to restructure the Chamber at the moment. We are building a good and credible information database for the benefit of the members and to facilitate meaningful dialogue with government and other institutions.

We are implementing an education campaign to increase awareness about what mining is all about, and we are

“As a Chamber, since mining is relatively new to Tanzania, we have a role to educate the public about the industry and how it operates” 76 |

Special Report

Shanta Gold

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Interview

keeping in close touch with government ministries and the legislature on fiscal, legal, security and other issues of importance to the industry.”

He is wasting no time: interviews are taking place to appoint the qualified people needed to upgrade and extend the national geological database. After all, less than 20 percent of Tanzania has been geologically mapped. Yet gold alone accounts for 60 percent of the country’s foreign exchange earnings. Joe Kahama estimates that only ten percent of known deposits have been developed to date. Similar potential exists in other commodities: Tanzania is rich in many minerals, from gemstones to nickel, and it may have one of the world’s largest deposits of rare earth elements.

One of the restricting factors for companies coming in to Tanzania is its infrastructure deficit. However, under President Kikwete and his predecessor, former President Benjamin William Mkapa, the government has been consistent in addressing this infrastructure shortcoming.

Paved roads are being constructed linking the entire country as well more roads are being built under the East African Community initiative, linking Tanzania with the other neighbouring countries.

Port and airport expansions are actively being undertaken as plans to build and modernise the central railway line, and one leading to Democratic Republic of Congo, are under way.

AngloGold Ashanti’s Geita gold mine

No doubt Kahama will use his considerable influence to expedite those negotiations, but there are other things that make life difficult for the juniors and even cause the seniors to look closely at cost cutting, including headcount reduction. In July this year the government announced a hike in fuel duties, a measure that followed close on the heels of an increase in licence fees by up to 300 percent. The Chamber has an important job to do in explaining to government that while gold and other commodities deliver good profits to the exploration and development companies in good times, these have to be offset against price volatility at a time of recession. They also have to be seen against rises in labour, material and fuel prices. If these companies employ fewer people because they have to spend more on acquiring permits then the country will lose revenue in employment taxes and general prosperity.

“We are keeping in close touch with government ministries and the legislature on fiscal, legal, security and other issues of importance to the industry” Special Report

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Shanta Gold

Inevitably the priorities of investors and the Tanzania government will not always coincide, and in such cases TCME fills an important role in sitting down with both stakeholders to discuss any difficulties and reach a solution that serves both their interests. “The government recently introduced 0.15 percent excise duty on money transfers. Together with recently introduced fuel levies we view these as being a restriction on the sector’s expansion. Mining companies transfer very significant amounts of money through the banking system, and

“The wider the gap between those making decisions and those affected by them, the greater the potential for misunderstandings and problems” 80 |

Special Report

consume significant amounts of fuel,” Kahama points out. “The introduction of these two taxes has impacted the mining companies operating in Tanzania by significantly increasing their operational costs. We are addressing these matters with the government.”

Better governance and transparency would benefit the nation and all stakeholders in mining, he emphasises.

Joe Kahama wants TCME to be an honest broker for interested parties, making sure that each honours its agreements.

“The wider the gap between those making decisions and those affected by them, the greater the potential for misunderstandings and problems.”

But let’s not leave the impression that it’s all struggle. TCME has some large feathers in its cap, among them the ongoing mining awareness campaign that has helped to dispel the negative perception of the mining industry.

Another major initiative is the Lake

Interview

Zone Health and Economic Development Initiative (LAZHEDI) which addresses HIV/AIDS among artisanal mining communities, maternal health care and general economic activities for these communities. And early October this year saw the staging of TMEPII 2013, the second Tanzania Mining, Energy Oil & Gas and Infrastructure Indaba, which TCME launched in 2012. This important three-day conference delivers a clear picture to prospective investors of the current and planned mining, energy, O&G and infrastructure development projects in Tanzania.

If one had to select the single project that is potentially the most beneficial in the long term to Tanzania’s mining industry it might be TCME’s Integrated Mining Technical Training Programme (IMTT), which it runs jointly at its college in Moshi with Vocational Educational Training Authority (VETA) and funded

by TCME members, notably Africa Barrick Gold and AngloGold Ashanti.

“385 students have been enrolled in this programme since January 2009, and so far 161 have graduated and qualified,” says Kahama, “and they are sought after by the mining companies! The industry is keen to train Tanzanians. One of the conditions for a licence is to train Tanzanian citizens - that does not always happen but increasingly it does.”

Among the other social initiatives the Chamber promotes is the Education for Employment programme with support from the Canadian International Development Agency (CIDA) It has also developed environmental guidelines for inward investors in collaboration with

“We welcome all approaches from whatever source: let them come to our offices in Dar es Salaam and we can talk about how to work together” WWF. The Chamber is also concerned to address the problem of illegal artisanal mining in the country, particularly in the light of a recent report by Human Rights Watch that describes how thousands of children work in smallscale gold mines, a sub-sector with scant respect for safety. Needless to say, TCME members would never countenance such practices – nevertheless they tarnish the industry’s reputation as a whole and the Chamber under Joseph Kahama is determined to use its muscle to support the government in bringing small-scale mining into the fold.

However the main job of TCME remains to work with inward investors to build profitable businesses that benefit Tanzania through employment, skills transfer, downstream industrial development and, of course, revenue generation. “We welcome all approaches from whatever source: let them come to our offices in Dar es Salaam and we can talk about how to work together.”

For more information about The Tanzania Chamber of Minerals and Energy. www.tcme.or.tz www.tcme-imtt.com

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NDC

The engine of growth Tanzania’s National Development Corporation has the task of attracting overseas investment, on terms that will benefit the citizens of Tanzania as much as its partner companies Words by John O’Hanlon Research by Candice Nice

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T

he National Development Corporation of Tanzania owes its existence to one of the most significant figures in the story of Tanzania’s journey towards independence. The man who was later to found and lead NDC, Sir George Kahama was appointed Minister of Commerce and Industries in President Nyerere’s first cabinet, and one of his priorities in the two years he spent in the job was to draft the legislation that established NDC. It is worth quoting Joseph Kahama’s account of the original vision in his biography of his father. NDC was, he says, to be “a crosscutting government agency designed to develop the industrial and export sectors of the economy. The aim was to make it flexible and able to take initiatives in … the sectors that would export and earn the foreign exchange the country so needed to support its social projects.”

The organisation traces its origins back to the Tanganyika Development Corporation established at the time of independence but it was not until 1965 that it was re established as the NDC, and in 1966 Kahama was recalled from Germany where he had held post of Ambassador in Bonn to become its General Manager and CEO. After the Arusha Declaration of 1967 another role was added to NDC, that of becoming a holding, creating joint

“NDC was to be a crosscutting government agency designed to develop the industrial and export sectors of the economy” 84 |

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ventures that secured a share of profits for Tanzania while encouraging the inflow of overseas investment. Sir George created a modern management structure based on his experience in the co-operative movement before independence. A group of subsidiary companies was formed, with the most profitable providing growth capital for long-term projects – a system refined when McKinsey & Co was brought in 1968.

In the late 1960s and early 1970s NDC became a diversified parastatal company, largely independent of central government control and with holdings in all sectors of the economy. Among its portfolio were key foreign exchange earning enterprises such as Williamson Diamond Mines, Tanzania Sisal Corporation and the National Textile Industries Corporation, through middle ranking organizations like the Tanganyika Standard newspaper, under the editorship of Frene Ginwala, to much smaller concerns like the state publishing house TPH and Tanganyika Meerschaum, based in Arusha.

Sir George led the NDC until 1973, where necessary bringing in expatriate managers whose brief was to transfer their skills to Tanzanians. He left to oversee the establishment of a new capital at Dodoma and in the intervening years the corporation has evolved, and by the 1990s all its former constituent companies had been privatised.

Today the NDC organization structure is made up of the Board of Directors and a management team under its CEO and Managing Director Gideon Nasari. His appointment in 2007 ushered in a new era for NDC. He is keen to foster a culture of entrepreneurship among Tanzanians,

NDC

something not encouraged in the years of socialism: “I would like NDC to generate as many projects as possible, so we can create a strong private sector that is involved in value addition activities. Then I would like NDC to be built to a level where they can invest outside the country.”

The government recapitalized NDC in 2008 and was given a mandate to expand into strategic industries.

According to Corporate Affairs Manager Abel Ngapemba the approach is that of public-private partnerships. Any company wishing to set up operations in Tanzania can approach NDC with the objective of setting up a joint venture company, listed on the Dar es Salaam Stock Exchange.

“The NDC holding in the company is determined by mutual agreement. We have a lot of flexibility, and can relinquish some of our shareholding or increase it as conditions dictate at the time.”

The organization faces a massive opportunity, he continues. “We want to encourage investment in agriculture, mineral resources, energy and downstream value added industries such as meat processing and biofuels.”

Ngapemba points to a few of the larger strategic projects that NDC is currently involved in. By far the biggest, something of a game changer for the economy, is the development in Ludewa Region on the eastern shore of Lake Nyasa in the south of Tanzania of a large coal, iron ore and energy complex. With $3 billion of financing the Integrated LigangaMchuchuma Project in the south of the country represents the single largest investment venture in East Africa.

Securing the finance was a milestone

“We want to encourage investment in agriculture, mineral resources, energy and downstream value added industries such as meat processing and biofuels” for NDC, which had brought in China’s Sichuan Hongda Group to form a joint venture company called Tanzania China International Mineral Resources Limited (TCMR) to implement the project. The Chinese partner holds 80 percent of TCMR and NDC 20 percent, however NDC plans to increase its share to 49 percent.

This megaproject is expected to continue producing over 70 years during which time a total of 219 million tonnes of iron ore will be mined, as well as around 174,000 tonnes of titanium and 5,000 tonnes of vanadium. “We estimate

Work begins at the Ludewa project

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NDC

that there are over 480 million tonnes of coal reserves at Mchuchuma, which are enough to generate 600MW of electricity, of which 300MW will be used to extract iron ore at Liganga and the remaining 300MW will be connected to the national grid,” says Ngapemba.

It is estimated that the Mchuchuma coal mine will be able to produce three million tonnes of coal a year. Some of this will be exported. “They are currently busy defining the resource and carrying out environmental impact assessments: next year we hope that mining operations will be able to start,” he says. As well as the mine itself, the company also intends to establish a 600 MW power station and transmission lines to connect it to the grid.

The Ludewa project will require considerable investment in infrastructure.

The nearest deepwater port is at Mtwara, where further upgrading is envisaged.

However the site is less than 200 kilometres from Mbeya on the TanzaniaZambia railway (Tazara) giving TCMR the option of transporting processed ore and other products to Dar es Salaam or inland to Ndola and beyond. The ore mine is expected to start operations during 2015 with production of iron and steel products following in 2016. It is he points out, a very complex project, but one that will bring as many as 8,000 jobs

“It is estimated that the Mchuchuma coal mine will be able to produce three million tonnes of coal a year”

to the region and boost the economy: it is thought that the MchuchumaLiganga project will have a turnover of $1.2 billion per year, equivalent to 7.5 percent of Tanzania’s current GDP. A thousand kilometres to the north of Ludewa the Lake Natron Soda Ash Project is a promising economic development that is a little more controversial. Lake Natron is named after the mineral in which it abounds – soda ash. Soda ash is a sought after chemical raw material with a host of uses from detergents to paper making, and Lake Natron contains 217 million cubic metres of brine from which NDC proposes, with a strategic partner, to extract 500,000 tonnes, rising to a million tonnes per year.

Economic and environmental studies are ongoing with the cooperation of Ramsar Convention on Wetlands, the latter an important step, as Lake Natron supports the chief remaining population of lesser flamingos. The government is

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NDC

“We have a very large soda ash resource, estimated at 4.7 billion tonnes. We are now doing techno-economic studies and soon will be looking for an investor” preparing an Integrated Management Plan (IMP) for the Lake Natron Ramsar Site under the ministry of Natural Resources and Tourism. Tanzania’s environment minister Dr Batilda Salha Buriani has said: “I am one of those who strongly believe that we have not inherited this planet from our ancestors but rather we have borrowed it from our children ... whatever decision we make should be with their interests in our hearts.” There should be no lack of offtake partners if the scheme is cleared – India’s Tata has already been involved and may be persuaded to continue if an environmentally friendly extraction process can be found.

In any event, Natron is not the only source of this mineral and NDC wants to be seen as a listening organisation that puts heritage before profit. “For now, following environmentalists’ concern on the mining of soda ash from Lake Natron, we are doing more studies to see how flamingos can be affected with the project,” Ngapemba assures. “However, our major concentration is in another area, 58 km south east of Lake Natron in the Engaruka Basin where we have a very large soda ash resource, estimated at 4.7 billion tonnes. We are now doing techno-economic studies and soon will be looking for an investor.”

Another Indian company, Nava Bharat Ventures, is partnering with NDC in a $111 million joint venture to create

an integrated palm oil enterprise in the Kisarawe District in the Coast Region of Tanzania just south west of Dar es Salaam. The agreement signed this summer provides for an 80/20 division of the equity. “The project will develop an 8,000 hectare oil palm farm,” says Abel Ngapemba. “A contract farming scheme for out-growers will also be put in place, and NDC will support these upstream ventures and also partner with the private sector on downstream palm oil extraction and refinery operations that we are planning to build.”

Biomass from the growing programme will be used to fuel a power station that will drive the plant, and also contribute to the national grid, he adds. By developing new industries, NDC is also addressing the infrastructure needs of the country, one of the most acute being energy. Tanzania’s population is not much smaller than South Africa’s but South Africa is generating in the region of 45,00kW of power (and needs more) whereas Tanzania’s output is nearer 1,000kW – a clear illustration of the current state of imbalance. Or looking at it a different way, of the opportunity facing Tanzania’s National Development Corporation.

For more information about Tanzania’s National Development Corporation. www.ndc.go.tz

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the vital statistics Area 945,203 km2 Population 44,928,923 official language swahili Capital Dodoma currency Tanzanian shilling (tzs) minerals found in tanzania • gold • iron ore • nickel • copper • cobalt • silver • diamond

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• tanzanite • ruby • garnet • limestone • soda ash • gypsum • salt

• phosphate • coal • uranium • gravel • sand • dimension stones

At a glance

the price of gold 2013-2014 (USD/oz) high 1693.20

1700

1600

low 1193.60 down 438.90

1500

1400

1300

1200 1150

goldprice.org

Jan 13

Mar

May

Jul

Sep

Nov

Jan 14

Did you know?

40

Current gold production in tonnes per year

$1.28

billion Predicted value of the mining sector by 2015

2.8%

GDP yealy contribution of the mining sector

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Atlas Copco Tanzania

First in mind and choice for Tanzania Atlas Copco is a big name with a big global reach: here we look at the mining equipment and associated support, maintenance and ancillary services it offers in Tanzania and throughout East Africa

written by: John O’Hanlon research by: Candice Nice

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Atlas Copco Tanzania

O

f all the economies in Africa that are waking up to the resources they are blessed with, Tanzania stands out for several reasons. Not least among these must be its stability. Though it has never been a rich country, since independence in 1962 it has hardly ever been in the news.

Turbulent decades have attracted the wrong type of attention to every one of Tanzania’s neighbours: cross-border conflict, inter-ethnic tension and population displacement have too frequently characterised the post colonial era. Julius Nyerere’s African Socialism may be considered a bit passé these days but there’s no denying that it spared Tanzania from problems of this sort, and that makes it one of the most attractive places in Africa to do business today.

But what are the factors that make Tanzania an attractive place for Atlas Copco to do business? The group has made a longterm commitment to this dynamic East African market. Specialising in industrial productivity equipment, Atlas Copco established a full subsidiary in Tanzania in 2007 to focus on the mining sector. The stability we have spoken about is certainly one reason for this, says Henry Ngugi, Regional General Manager for East Africa, but there are others. “Tanzania has a welldefined mining legislation, something other countries in the region are still working on.

It also has the most developed mining sector in the region, in terms of production and exploration and received the largest share of investment capital in this area: all this makes it an excellent market for our range of mining

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“Tanzania has a well-defined mining legislation, something other countries in the region are still working on” and exploration equipment, tools and after sales support.”

Atlas Copco Tanzania has signed equipment maintenance and spare parts supply contracts with many of the major players in Tanzania’s

96 | Special report

mining sector, including Africa Barrick Gold and Capital Drilling the drilling contractor for AngloGold Ashanti’s Geita Mine. Indeed most of the exploration companies in Tanzania are using Atlas Copco equipment

Atlas Copco Tanzania

and consumables. Gold mining always seems to hold its place as the most sexy sector, nevertheless with prices currently well below $1,250 and showing no immediate sign of rallying this is an industry under pressure, if not yet in crisis. But Henry Ngugi is undismayed: “Our activities in Tanzania are today focused on supporting gold mining players. Of course our customers are under pressure to operate and produce at a lower cost in order to stay in business; so our strategy has been to help them to reduce their operating costs. Several new projects have

been put on hold, so we have had to focus on keeping our existing client base satisfied, and tried to grow the consumables, spare parts and skilled labour segments of our business.”

It is one of the advantages of being part of a group that has international clout and deep pockets – Atlas Copco is always prepared to invest in locations and segments that position it to serve its customers in the best way possible, he says.

Of course mining in Tanzania is not all about gold. It involves a rich mix of minerals, and that is one of the sector’s strengths. If the

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Atlas Copco Tanzania most important commodities in the African context can be said to comprise platinum group metals, coal, gold, iron ore, diamond, copper, manganese ore and mineral sands, Tanzania has them all and can add its diamonds, tanzanite and other precious stones, rare earths, potash and a number of niche minerals. “In the short and mid term I think the greatest opportunities within Tanzania itself will be in gold, copper, coal, nickel, iron ore, titanium and vanadium, but definitely not limited to these!

If I can extend my comments to Eastern Africa, we also see promising development in coal, copper, nickel, potash mining in emerging mining markets such as Ethiopia, Eritrea, South Sudan and Kenya.” he adds. “In a broader sense Oil & Gas is a new segment in the region, particularly in Tanzania, Uganda and Kenya.”

High enthusiasm for Tanzania, where he is now based, is palpable. Henry Ngugi has amassed unrivalled experience since he joined the company in Kenya 20 years ago.

That subsidiary was established as long ago as 1938, to service Kenya’s more advanced industrial sector but though its presence in Tanzania dates back only to 2003, with full local incorporation in 2007, the fact that he has led regional mining operations from his office in Dar es Salaam for the last five years reflects Tanzania’s rapid growth to its current

status as East Africa’s mining ‘tiger’. “Tanzania is already the largest mining economy in the region and the situation is changing all the time. Early development of the sector was mainly in the Lake Victoria region which is why we placed our warehouse facility and maintenance workshops in Mwanza to service the mines around Kahama, Mwanza, Geita, and the Mara region near the Kenyan border.

But now we see mine companies opening up in the south near Songea, Mbeya and towards the Malawi and Zambia borders.”

Tanzania has resources in every district, but the biggest challenge to developing them remains very poor road, rail and communications networks, not to mention unreliable or nonexistent electricity supplies to some of the areas. Mining companies can

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Atlas Copco Tanzania overcome the last two of these with satellite connectivity and diesel power, but the need to get equipment in and ore out can only be served by good infrastructure, and the investment for this is lagging.

Nevertheless, Atlas Copco is 140 years old, and a pioneer in development of mining equipment, with access to very technically skilled people of different nationalities and it is used to supporting its clients wherever they are. “We believe we are a customer focused organisation,” says Henry Ngugi.

“Since mining companies are becoming more focused on productivity and more cost conscious, we need to focus on increasing our customers’ long term productivity. All our actions are geared in this direction and it resonate well with them. Within our global organisation we have a culture that has evolved over the years and now unites us, and enables us to work towards a common aim: ‘To be first in mind and first in choice, for our customers, by delivering sustainable productivity in whatever we do’.”

The company’s 120 employees are well grounded in this philosophy, which embraces the concept of continuous improvement, he concludes. “We believe that there is always a better way of doing things. We believe every single employee has the capability to contribute to the growth of their business unit by continually improving the processes for which they are responsible.”

For more information about Atlas Copco Tanzania visit: www.tz.atlascopco.com

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SGS/AAL Tanzania

Analysis for Africa The world’s most trusted partner for mineral analysis, SGS is well rooted in Africa and is preparing to support Tanzania’s burgeoning resources sector through the state of the art facilities of its regional subsidiary African Assay Laboratories

written by: John O’Hanlon research by: Candice Nice

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I

t is no exaggeration to say that the future of African economic development, in the near to mid term at least, is inextricably linked with its mineral resources. It is these that will provide the capital that can be re-invested in building a sustainable business infrastructure whether in manufacturing, services or technology and innovation.

Currently, the most important commodities in the African context are platinum group metals, coal, gold, iron ore, diamond, copper, manganese ore and mineral sands, and in Tanzania one could add its diamonds and other precious stones, rare earths, phosphate and a number of niche minerals.

For each and every one of these commodities, sampling is required at all stages in the value chain from exploration, through face sampling, blast-hole sampling and in-mine grade control, ore processing and handling, metallurgical sub-sampling, sub-sampling in the laboratory – and finally quality control and standards used in the analyses of the final samples.

Best practice at each of these stages is required to maintain value. Exploration and development companies have their own procedures based upon operational experience informed either by sampling theory, or for commodities like iron ore, nonferrous metals, sulphide concentrates and coal, by procedures based upon ISO standards.

Nevertheless over the years a number of codes have been introduced to ensure adherence to good sampling and analytical practice.

For mineral resource and reserve estimates the South African Code for reporting of Mineral Resources and Reserves (SAMREC),

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SGS/AAL Tanzania

Chemist determining of trace metals in water

presents guidelines for sampling governance that have been a reference for other African nations in developing their own regulations.

In 2003 AMIRA (an independent association of minerals companies which develops, brokers and facilitates collaborative research projects) initiated its P754 research project: Improving Metal Accounting. As a result of global research work, the Code for Metal Accounting was published in its current version in 2007. This was sponsored by international mining companies and covered metal accounting from ore deliveries to final product. This Code has been adopted by several companies and used as a basis for auditing metallurgical operations.

With regard to quality control and accreditation, one requirement is the use of certified reference materials to ensure that the final analyses are accurate and have an acceptable level of precision. In the wake of various financial scams, the so-called Sarbanes Oxley legislation was passed in the USA requiring publicly listed companies to be transparent in reporting factors impacting on their financial statements and this includes year-end stocks. This requires reporting of these stocks within a Confidence Interval, which, in turn necessitates estimates of the uncertainties in sampling, mass measurement

and analysis of these stocks.

So best practice in sampling and the availability of laboratories that are internationally accredited are essential to the mining industry. This is where SGS Tanzania comes in, as a part of the world’s leading inspection, verification, testing and certification company. The Swiss based company Société Générale de Surveillance was established in 1878 and today is recognised

“best practice in sampling and the availability of laboratories that are internationally accredited are essential to the mining industry” 106 | Special Report

SGS/AAL Tanzania

Chemist on ICP OES for determination of base metals in rocks and soils

as the global benchmark for sector in Tanzania and the quality and integrity, with surrounding East and Central more than 75,000 employees Africa neighbours, was opened in Mwanza in 1997. and a network of more than 1,500 offices and laboratories It offers geochemical analysis SGS/AAL employees around the world. to meet mineral testing needs in Tanzania SGS was incorporated in in Tanzania. Since then SGS Tanzania 50 years ago. It is the has also established dedicated country’s leading inspection, onsite laboratory operations verification, testing and certification company for Tanzania’s Golden Pride mine, Geita gold with more than 300 permanent employees mine, Bulyanhulu gold mine, Tulawaka mine, operating in Dar Es Salaam, Tanga, Mtwara, North Mara mine, and more recently the Mwanza, and at mine-sites spread throughout Buzwagi gold mine. Analysis of drill samples the Lake-Zone area, and any other location and geochemical data is now all carried out where need arises. at the Mwanza laboratory.

SGS Minerals Services’ laboratory, today This type of testing is essential for the trading as African Assay Laboratories (AAL), commercial success of any project, and a key a spin-off company that serves the mining element of the ongoing assessment that is

500

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required right through from pre-feasibility to quality control in production. It is the basis for operational decisions, and also for investors and potential investors, so its importance cannot be exaggerated. However these days investors don’t just need to satisfy themselves as to the financial viability of the project – they need to be reassured as to the environmental and social compliance

that Tanzania insists on. In 2003, SGS also set up an environmental testing laboratory in Mwanza, supporting its clients by testing the quality of water and effluents they release in the surrounding environment.

As far as Tanzania is concerned mining companies’ environmental departments are responsible for the mines complying with the requirements of The National Environment

“Tanzania’s Oil and Gas sector will expand rapidly, opening up the possibility for SGS to bring in its upstream and industrial services into the country”

Analysts at work

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SGS/AAL Tanzania

Chemist on AAS for determination of precious and base metals

Management Council (NEMC) , which came into being in 1983. NEMC was established with a broad mandate in response to the national need to oversee environmental management issues and also implement the resolutions of the 1972 Stockholm conference, which called upon all nations to establish and strengthen national environmental councils to advise governments and the international community on environmental issues.

Tanzania’s mining regulatory framework was updated in a new mining code in 2010 that aimed to maximise the retention of value

from mineral exploitation within Tanzania.

“We still see the regulatory framework as stable, although investors will have to see the government’s point of view and work with it,” says SGS Regional Managing Director for East Africa Samuel ‘Kiki’ Gyan.

The Mwanza facility is ISO/IEC 10725 accredited. It has access to the SGS global laboratory network that provides first-class geochemical analysis, including ICP-AES analysis, to mining and exploration companies throughout Africa and around the world, and uses the same global testing methods,

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Technician on fire assay fusion furnace for the determination of precious metals

SGS/AAL Tanzania analytical codes, and sampling preparation techniques. AAL employs two thirds of the 500 trained staff that work for SGS in Tanzania.

It is an asset of which Gyan is very proud: “We can offer our clients a really broad suite of analytical techniques including inductively coupled plasma-atomic emission spectroscopy (ICP-AES),” he says. Among the standard on-site analytical capabilities is sample preparation (all samples are reduced to pulp for ease of transportation). Of particular relevance to the gold mining sector are fire-assay (considered the most definitive technique for gold analysis), acid digestion, accelerated cyanide leach and cyanide BLEG leach analyses.

During the course of 2014, faced with a slowdown in the rate of new mine start-ups since 2009, the situation will continue to be challenging, but Tanzania is one of the East African countries with the greatest growth potential, Kiki Gyan believes. “Tanzania’s economy has been expanding at a rate of six to seven percent over the last couple of years and even at its depth the global financial crisis only reduced growth to five percent. The Oil and Gas sector – already serviced by one of our business units – will expand rapidly, opening up the possibility for SGS to bring in its upstream and industrial services into the country. These factors provide a healthy economic outlook for the country and therefore Tanzania sits well with our overall strategy.”

For more information about SGS/AAL Tanzania visit: www.tz.sgs.com

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shanta gold

gold from Tanzania In the present condition of the gold market, the smart money is moving from long term development projects to those that promise profit in the near future: Shanta Gold is delivering growing cash flow and has development assets as well, within one of the most stable jurisdictions in Africa

written by: John O’Hanlon research by: Jeff Abbott & Vincent Kielty

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Bauhenia Creek pit looking southwest

shanta gold

I

n the present climate exploration companies are really struggling to secure investment to complete drilling programmes and progress to a defined resource they can either sell on or start to develop. But companies that have already moved into production and can point to reliable cash flow are in an enviable position.

Shanta Gold is such a company. The AIMlisted emerging gold producer has a lot going for it including a mine that poured its first gold in August 2012, two extensive and open resources at that location, exploration rights over extensive targets in an area long known to contain high grade gold deposits and a further, separate resource at an advanced stage of development.

Mike Houston, Shanta Gold’s CEO is a South African and former CEO and Chairman of Zimplats, the Zimbabwe platinum mining company. Since his appointment in October 2012, he has been based in Dar es Salaam, the commercial centre of Tanzania. Tanzania is one of Africa’s most attractive countries, having enjoyed over half a century undisturbed by conflict, either internal or external, since its independence in 1961. That stability is at last attracting inward investment that will enable it to benefit from its abundant natural resources, of which gold is just one.

When he stepped in to the job, the processing plant at the New Luika mine on the Lupa goldfield had just started to operate, but throughput was disappointing, and a primary focus in the last year has been to improve its performance and get the company into positive cash flow. This Mike has in large measure achieved, with production ramping

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New Luika is a remote site, with road conditions that make transport a challenge.

Oryx Energies’ affiliate in Tanzania, Oryx Oil Tanzania, has taken on this challenge and, in collaboration with the mine, has ensured that mining operations do not run dry.

Even during the recent transport strike, Oryx Energies ensured that the New Luika mine received enough fuel to keep operations going.

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Oryx Energies in Tanzania provides an integrated energy platform that masters the value chain from product sourcing to storage and distribution. We are proud of the strong business relationship we have with Shanta Gold and wish Mike Houston and his team every success in the future. www.oryxenergies.com

shanta gold

Excavator at dusk

“Singida gives Shanta some important growth potential in what is a relatively untouched area” up from 6,000 ounces in the last quarter of 2012 to 11,800 in the first three months of this year and 14,600 in the second.

The Lupa goldfield is the second largest in Tanzania after the Lake Victoria goldfield. It produced more than 23 tonnes of gold during colonial times, and an unrecorded amount since independence. The New Saza Mine, closed in 1956, was the second largest preindependence gold producer in the country after the Geita Mine. Lupa has long been thought to be a high potential gold play

for the small to mid-sized producer, says Houston: “The bulk of Tanzania’s gold was coming from the northern goldfields at that time. But then Shanta started looking down in the Lupa area, found a number of attractive deposits and decided to build a small mine at the New Luika close to the eastern shore of Lake Rukwa and run a plant that would generate some cash flow. This would allow Shanta to tackle what was considered its premier resource at Singida in the central part of the country.”

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shanta gold Things changed a little when it was found that the pit was open at depth, with the potential of developing an underground operation once the surface pit was exhausted, and also that it butted against a separate deposit with even greater potential. “In the process of expanding the Luika resource they found another deposit, Bauhinia Creek,” he explains. Bauhinia Creek is a highgrade resource, which he now describes as Shanta’s cornerstone asset, containing 4.4 million tonnes at 4.9 grammes per tonne (g/t), and of that 1.9 million tonnes runs at over seven grammes per tonne, he says.

Mining from Luika pit

The existing plant is ideally placed to process ore from both deposits, as they are no distance apart. However it will need to be expanded even after all the teething problems of the original plant are behind it. “We aim to have replaced the crushing circuit by the end

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base. In addition to the Mining Sector and Cement Industry we serve other industries from Steel to Textile, to Tea, Tobacco and Transport.

Petrolube has a state of art, modern design plant, utilizing a computerized Automated Batch Blending (ABB) system based on sophisticated “Supervisory Control and Data Acquisition” (SCADA). All equipment conforms to the highest industry standards.

Let us show you that we are COMMITTED TO MOVE YOUR WORLD E. tech2@fuchstz.com www.fuchstz.com

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Reliable results. Fast.

At Quality Laboratory Services, our dedicated staff are made up of teams of scientists, all experts in their respective fields and suitably equipped to analyse the mineral, chemical, hydro-biological and bacteriological determinants needed for research, process optimisation and quality control.

www.qualitylabs.co.za

shanta gold of the first quarter of 2014, Quality Laboratory Services and also upgrade the back At Quality Laboratory Services, we deliver quality laboratory end of the plant by changing services. From a small privately owned lab we have grown from the existing incineration into one that works around the clock every day of the week, process to an elution and processing over 9,000 samples a month with a turnaround electrowinning process.” The time of less than 24 hours. necessary equipment for the Strict procedures are in place to prevent contamination.

On receipt, incoming samples are given a coded reference $9 million plant expansion is number and results are emailed to you to ensure all on order, he adds. confidentiality. And finally, our turnaround times are During the year 2013 he designed to meet the most critical requirements, to give expects New Luika to have you peace of mind. produced more than 63,000 www.qualitylabs.co.za ounces of gold. Once the new crusher and elution plant are in place that will rise to an annual level of between 80,000 and 85,000 ounces. It will still be a relatively small gold mine, however Shanta is now sitting on 1,200 square kilometres of active licences and 1,300 square kilometres of applications in the Lupa goldfield, in which it now has a 100 percent interest since it bought out its former joint venture partner Great Basin Gold. “This is our ‘blue sky’ area. Lupa has numerous gold targets, whether colonial mines, artisanal workings, though at the moment we are focusing on a 20 kilometre radius round our plant.” Within that envelope intensive aeromagnetic and radiometric surveys have highlighted a number of targets that will be drilled out in the course of time.

“The Lupa goldfield is our ‘blue sky’ area”

Blast hole drill rig

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Wealth Unearthed When you unearth gold, you build stronger nations

Serving the Tanzanian Mining Industry for 15 years

AEL Mining Services – proudly supporting Shanta Gold to Unearth Wealth AEL Tanzania Dar es Salaam Tel: +255 222 77 1055 www.aelminingservices.com

t solutions d procuremen

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that work

Achieving effective use of every procurement dollar cannot be left to chance.

The NET solution aligns procurement with business demands, applies intensive levels of planning to the supply chain and involves a proactive approach to stock management. The result is a bigger bang for our customer’s buck.

NEW ENTERPRISE TRADING (PROPRIETARY) LIMITED Tel: (+ 27 11) 781 1387 | Fax: (+ 27 11) 326 4214 | Email: mstevenson@newent.co.za

shanta gold Wisely he won’t make any predictions at present but AEL is a world-class mining services company with global the upside potential for the technologies that create wealth and growth in South plant is plain, given the highAfrican, African and selected international markets. grade gold deposits the Lupa Consisting of a capable team of leading explosives services, is known to contain. engineers and scientists, AEL has over a century of For the moment though expertise and knowledge in developing ground-breaking and innovative blasting solutions that contribute to the attention is on the known creation of infrastructures in countries throughout the and immediately accessible world. AEL unearths wealth by meticulously providing the deposits. On September 18 mining industry with carefully controlled energy. the company confirmed that www.aelminingservices.com its drilling programme had established mineralisation, at very high grades between 13 and 15 g/t, below the already established resources at Luika and Bauhinia Creek. Given the close proximity of the two it is probable that a single underground mine could be built, and as mentioned before, the plant is already there. At the end of the day the mine life, currently calculated at eleven years, could be extended to a couple of decades and beyond.

A little further out in both time and distance but with very exciting possibilities, is Shanta’s Singida deposit in the centre of Tanzania. Here the company holds eight prospecting licences covering around 240 square kilometres, and three mining licences over 30 square kilometres. “Singida gives Shanta some important growth potential in what is a relatively untouched area,” he says.

“Following substantial drilling and a feasibility study in 2011 that indicated production of about 450,000 ounces of gold over a ten year life of mine, a positive feasibility study has been commissioned and should be ready early in 2014. It is a typically vertical deposit giving the prospect for open pit exploitation over a Mill feed bin in production

AEL

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“Lupa has long been thought to be a high potential gold play for the small to mid-sized producer�

General view of the operations

126 | Special Report

shanta gold period, then good potential for underground mining.”

In any mining project, investors and management alike depend on reliable analytical data and to ensure this Shanta partnered with Quality Laboratory Services of South Africa, which quickly set up a fully equipped laboratory at the New Luika minesite. Here rock samples can be accurately analysed and gold output assayed.

However QL’s work does not stop there. It has a key role in the hydrological and environmental studies that are another sine qua non to successful operation in almost any jurisdiction today – so the lab, a modular unit that can be delivered without delay to any remote area, is a one-stop facility that supports both the business case for the mine and its compliance issues too.

Tanzania is a very positive place to work, says Mike Houston, with cooperative authorities and a mining-friendly approach.

The country is investing in its infrastructure, and he is hopeful that it will succeed in providing a reliable main grid electricity supply to relatively remote places like the Lupa goldfield. If that could be achieved, it would open the door to a higher level of expansion: as things are, only the highest grade ores can be processed economically since all the power for the plant has to be generated on site using diesel or heavy fuel oil generators.

“Nevertheless, because Bauhinia Creek is so

Removing waste from Luika pit

high grade we are able to look at blending the mid-grade material of which there is a lot in this goldfield,” he points out.

He has brought Shanta Gold to a very different place in the course of year. Production has been stabilised, and set on a course that will see increasing cash flow. It is getting into a very stable position with a sound production process, good growth in output and a lot of blue sky potential, both by extending New Luika mine life and developing other licences.

Add to that the Singida project which should yield 45,000 ounces a year and Shanta has the realistic potential to increase production output substantially in a relatively short time frame, he believes.

For more information about Shanta Gold visit: www.shantagold.com

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Tanzania’s most pro

In 2012, the Geita Gold Mine (GGM) became one of AngloGold Ash production centres and cash generating assets. Managing Director, Anen, talks about how the company intends to further build upon

written by: Will Daynes research by: Candice Nice

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AngloGold Ashanti - Geita Gold Mine (GGM)

oductive mine

hanti’s largest r, Michael Van n its success

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AngloGold Ashanti - Geita Gold Mine (GGM)

S

Engineers carrying out general maintenance

ince the early 1990s, the use of modern technology and refined models has seen gold exploration in Tanzania grow rapidly, in turn transforming the country into one of the fastest-emerging gold producers in Africa, behind only South Africa and Ghana. Yet despite the relatively recent expansion of the sector, the presence of gold beneath Tanzania has been known about since it was first discovered in the Geita region in the late 1800s.

Today, the region is home to the Geita gold deposit, located 20 kilometres south east of Nungwe Bay on Lake Victoria, at an elevation of approximately 1,200 metres above sea level. Geita Gold Mine (GGM) commenced production in 2000, initially as a joint venture between South Africa’s AngloGold Ltd and Ghana’s Ashanti before the two companies merged in 2004.

An open cast mine with three pits, GGM has been the recipient of approximately US$600 million in investment from AngloGold Ashanti since 2000, while the mine has paid some US$683 million in direct contributions to the Tanzanian government through taxes and royalties in the same time period.

“AngloGold Ashanti is immensely proud that Geita Gold Mine is currently Tanzania’s most productive mine,” states Managing Director, Michael Van Anen. “Four years ago, GGM underwent a focussed turnaround and in 2012 became AngloGold Ashanti’s largest production centre and cash generator.

Presently, Geita produces about one third of the total ounces of gold from our African production, excluding South Africa, and

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Tel:+255 28 2540790 | Cell: +255 784 223 007 Email: princeco@thenet.co.tz www.princeco.co.tz

Princeco Ltd. is a Tanzanian registered company based in Mwanza, Tanzania. It started its operations in September 2005 as a Procurement and Trading company to cater the growing needs of the approaching gold & oil / gas investors in the country. Princeco selects sources and delivers products and services for the mining, fishing, and the overall corporate sector. Today it has a product range of over 350 items and more than 30 corporate customers. We are dealers & stockist for Welding Equipments, Abrasives, Personal Protective Equipments,

Workwear & Rainwear, Geological & Survey Items, Visibility Products, Fire Equipments, Filters and General Procurement. We have dealership for Lincoln Welding, 3M, ‘Steelblue/Howler/Krusher’ Australian Boots, ‘Dy-Mark’ Mine Marking, ‘Wild Africa’ Workwear, ‘Precious Earth’ Geology & Survey items, ‘Fleetguard’ filters, ‘Norton’ Abrasives. If you are a foreign company looking to invest in Tanzania in the Mining Sector & looking for a local partner do contact us.

KARIBU SANA! TUJENGE NCHI TANZANIA – HAKUNA MATATA!

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AngloGold Ashanti - Geita Gold Mine (GGM) is one of our largest mines in Africa. It therefore goes Princeco is always adding new products to its product list without saying that we are to make sure the mining industries and oil & gas industries very proud of our investment are served in this country to the best of Tanzania’s ability at Geita and in Tanzania.” so that we preserve its opportunities within the country. We In making its ambitions are proud to say we have grown and developed our supplies in the country a reality, and services to Mining Industries with the knowledge and support from the foreign investors to an international level. the company has worked We work with world renowned mines like Barrick Gold Mine, tirelessly to ensure that it AngloGold Ashanti Mine, Xstrata Nickel and etc. If you are a maintains productive and foreign company looking to invest in Tanzania in the Mining fruitful relations with all of Sector and looking for a local partner do contact us. its stakeholders in Tanzania. www.princeco.co.tz Part of this work has involved helping to strengthen the capacity of all stakeholders involved and interested in extractive industries to build a shared understanding of the challenges and opportunities presented by the extractive sector for Tanzania’s long-term development.

Despite the obvious success that the company has had with GGM, it continues to push this further forward and at present has three key growth projects that it is continuing to explore, these involving underground extensions, surface extensions to already open pits and a refractory ore project.

“Each of the above projects is designed

Princeco

$4.8

Million (US) Invested by the company into community development projects Haul truck

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to build upon GGM’s current strong performance and invest in its future as a mine,” Van Anen continues. “Geita is an important mine for AngloGold Ashanti, Tanzania and the local Geita community and as such we will work to ensure that remains the case for a long time to come. In Tanzania, we have successfully turned around the business over the last three years, with a 30 percent improvement in productivity and throughput improvements that had provided us with a more robust margin.”

In addition to these projects, the company also has exploration tenements surrounding its Special Mining License at Geita. This means that should an appropriate opportunity with sufficient economic potential be identified in the future, AngloGold Ashanti has the option to apply for a separate license to mine and realise the potential of said opportunities.

AngloGold Ashanti is committed to fulfilling its obligations and duties as a responsible corporate citizen across the entirety of its operations, and its belief in the importance of the concept of sustainability clearly extends through to its activities at GGM. It was as recently as August 2013 that GGM was named the winner of eight awards from the Tanzanian Presidential

Award on the Extractive Industry Corporate Social Responsibility and Empowerment Programme (CSRE) for its commitment to communit y investments. These awards were bestowed on the company as recognition of its health, education,

“The mine has paid some US$683 million in direct contributions to the Tanzanian government through taxes and royalties since 2000” 134 | Special Report

AngloGold Ashanti - Geita Gold Mine (GGM)

Aerial view of the mining operations

procurement, and water programmes for its host communities in Tanzania.

As GGM continues to gain ground in its own right, so too are many of AngloGold Ashanti’s current community empowerment projects. These include the Geita Town Water Project Implementation, which has seen the company invest US$4.9 million towards the implementation of a water supply system in partnership with the Tanzanian government.

The establishing of a clean water supply will ultimately benefit some 130,000 residents located around Geita.

Another US$5 million investment from

GGM has gone into the construction of the Nyankumbu Girls Secondary School, the final stage of which began in July 2013. This stage includes the construction of the remaining batch of teachers’ housing, school fence, sports fields and purchase of laboratory equipment. The overall project is expected to be completed by the end of March 2014, after which more than 900 girls will have access to a science-focused boarding school, the only one of its kind in the Geita region.

Meanwhile, a joint venture with the Geita local government authority, and other parties, has successfully implemented an

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“AngloGold Ashanti is immensely proud that Geita Gold Mine is currently Tanzania’s most productive mine”

The open pit at Geita

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AngloGold Ashanti - Geita Gold Mine (GGM) integrated malaria control program in Geita. The Geita Malaria Prevention program, which covers approximately 19 villages annually, focuses on carrying out indoor residual spraying within the community and was responsible for offering this prevention to more than 90 percent of the target population. Furthermore, from an environmental perspective, GGM is understandably proud to have maintained ISO 14001 certification, which will remain valid until June 2016.

“In addition to the work we carry out on behalf of local communities,” Van Anen highlights, “we are also a significant taxpayer in Tanzania, making US$213.8 in tax payments last year alone. This represents the second highest tax contribution across our global portfolio, and second only to South Africa where we have a much larger operating base. In addition to our tax remittances in Tanzania last year, AngloGold Ashanti provided a direct income and benefits to about 3,600 people and thousands more indirectly, and invested US$4.8 million in community development projects. We believe we contribute a great deal towards national development goals through our direct contribution to government and through our community investments.”

As Van Anen goes on to conclude, AngloGold Ashanti is committed to building on this

success by continuing to explore efficiencies and further opportunities to ensure that Geita’s future remains bright. “Crucial to our success going forward will, of course, be the support of our host communities. GGM is currently rolling out an enhanced engagement strategy, involving the surrounding communities and creating awareness of our mining processes and activities. We believe this will enhance public knowledge and understanding of the industry and strengthen the all so important stakeholder relationships which currently exist.”

For more information about AngloGold Ashanti - Geita Gold Mine (GGM) visit: www.anglogoldashanti.com

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Allied Mining Services Limited

Bringing the world to East Africa With a history of 13 years in the mining industry and two generations of experience in the procurement sector, Allied Mining Services Limited continues to be a key contributor to East Africa’s growth

written by: Will Daynes research by: Candice Nice

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Allied Mining Services Limited

A

s much of the Western world spent the latter years of the last decade and the first few of this battling the global recession, the economies of Tanzania, Kenya, Rwanda, Uganda and Burundi have flourished. With each country experiencing economic expansion of between five and ten percent during the years during and following the crisis it comes as little surprise that East Africa has since been considered the core of Africa’s growth.

In recent years the prosperity of the region has benefited countless companies and businesses, particularly those that inhabit leading positions in their respective fields. Allied Mining Services Limited is a major supplier and stockist of mining, construction, industrial and agricultural products in and around East Africa.

With a history of many years in the mining industry, not-to-mention two generations of experience in the procurement sector, Allied has achieved a strong foothold in the mining and construction market sectors. From what was once a small retail shop the company would go on to become one of the fastest growing businesses in Tanzania.

“Thanks to the experience of two generations, as well as an apt and powerful team, and our ‘Yes’ mentality we have seen the business go from strength to strength,” states Managing Director, Ashish Pattni.

“In that time our team has been able to gain extensive knowledge, expertise and understanding of the market which, when combined with their high degree of expertise, allows them to provide the type

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of service that drastically reduces the end user’s time and money.”

Professionalism has always been the quality that Allied has considered to be its core strength, something which it ensures goes hand in hand with ensuring 100 percent customer satisfaction. “We pride ourselves in ensuring customer satisfaction is our number one priority, continuously striving for excellence,” Pattni continues.

Allied’s excellent track record over the years has meant that it is today partners and distributes a wealth of major brands and products commonly used throughout the mining sector, a fact that allows the company to source solutions world-wide at an affordable price. Among the key product manufacturers that Allied can call itself a distributor of, one can list 3M, Uvex, Heckel, Hardox Wear Plates, Yale Lifting Equipment, Buccaneer Pumps, Ridgid Power Tools, Karcher to name but a few.

More recent developments have seen the company agree partnerships with a number of other reputable players, specifically Heckel Footwear, Karcher High Pressure Cleaners and Ridgid Power Tools. In addition to this, the company has gained a fleet of vehicles that will now be used for transportation and leasing and hiring.

“Our manufacturers are carefully shortlisted and tested to ensure we provide the best quality products, abiding by ISO standards,” Pattni highlights. “Allied is a highly reputable and reliable company where the end user can be assured to be the recipient of paramount service that exceeds all expectations. This means that we are commonly referred to

“Allied has been the heart and soul of East African development, boasting years of experience in the industry and market sector” 142 | Special Report

Allied Mining Services Limited

as the one-stop supplier and fact that we exist as one of the key players in one of the stockists for all requirements within the mining and country’s leading business construction sector.” sectors and that we continue Tanzania has long been to improve ourselves with Experience that the one of the major contributors each passing year.” company has of operating to East Africa’s growth and Allied has been the heart within the mining sector and soul of East African Allied has been operating in the country since its own development, boasting years inception, playing its part in of experience in the industry the development of the country, something and market sector. “We pride ourselves in that it has been justly recognised for. “In being one of the number one suppliers in 2011,” Pattni explains, “we were honoured Tanzania and one that has taken growth to to become the recipient of the “Second-Best another level,” Pattni explains.

Tax Payers Award” by the Tanzania Revenue With the world’s eyes having increasing Authority. To us this further reinforces the turned to Africa in the last several decades

13 years

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“It does not matter in which area a business is located, sustainability should be the key core value of the company” in the pursuit of investment and business opportunities, the importance of the fact that Allied has been present in the market for so long is certainly not lost on Pattni.

“The mining and construction markets have long been, and continue to be, hugely important to Tanzania’s growth as a nation.

By being ever-present in the country we have enabled ourselves to remain ahead of

144 | Special Report

the curve in comparison to a great many of our international competitors that are relatively new to the scene.”

As well as contributing to the economic development of Tanzania, Allied also has a long track record of playing a role in improving the sustainable growth of the mining and construction sectors, something that has risen from the fact that the company

Allied Mining Services Limited

believes that sustainability should be the driving force behind any business, which is in turn incorporated into its core values.

“In an ideal world, any company would like to sustain their business for a life-time,” Pattni explains. “Therefore it does not matter in which area a business is located, sustainability should be the key core value of the company and as such one should always work to ensure that this train of thought grows horizontally and vertically within their business model.

We at Allied Mining believe this and always ensure we adapt to the market requirements to ensure sustainability is always achieved.”

In much the same way as Pattni believes that sustainability should be a goal that all businesses strive towards, he also recognises

that for any business the ultimate goal should be to become the leading figure in its chosen field and sector. “In many ways,” he concludes, “Allied Mining has already achieved this goal in Tanzania and as such it is now our job to retain this position in the marketplace. Meanwhile, it is now our aim to focus towards the rest of East Africa and provide the same services to the mining and construction sector in countries across the region, doing so on the basis of what we have achieved in Tanzania.”

For more information about Allied Mining Services Limited visit: www.alliedgroup.co.tz

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SEAMIC

Promoting responsible mineral development in Africa The Southern and Eastern African Mineral Centre (SEAMIC), an international organisation under the umbrella of the United Nations Economic Commission for Africa: its sphere of influence continues to widen as does the relevance of its services to both public and private sector interests

written by: John O’Hanlon research by: Candice Nice

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The Director General of SEAMIC

seamic

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EAMIC traces its origins back through the next phase of its development. to the late 1970s with the He explains the changes he has seen so far as establishment of the Eastern follows. “In the late 1990s, thanks to the well and Southern African Mineral advanced restructuring programmes in Africa Resources Development Centre and the privatisation of the minerals sector by (ESAMRDC), supported by UNDP and African states, the role of governments with various bilateral support programmes from respect to the mineral sector was changed the UK and Japan. Its headquarters were to become a regulatory body, and because of established in Dodoma in central Tanzania, this the role of SEAMIC was also changed. and in those days its remit was principally to SEAMIC was reorganised with a new role to carry out regional geological surveying and provide mineral related services and trainings to provide consulting services for programs and hence started to draw in the private sector of its founding member states, Ethiopia, as well as public institutions. The new role of Tanzania and Mozambique. These were later the Centre was realigned to become a mineral joined by Uganda, Angola resource services provider”. and the Union of the Comoros The Centre has a Governing followed by Kenya in 2006 Council, made up of the and Sudan in 2010 bringing Ministers responsible for the total membership to mineral resources from the eight. The name ESAMRDC member states. It is supported African states currently was also changed to the more by a standing committee members of SEAMIC pronounceable SEAMIC, and of the Ministers’ advisers. moved its operations to an The Board of Directors extensive new site at Kunduchi, to the north supervises the activities of the Centre and of Dar es Salaam. In 2007, at a meeting reports to the Governing Council which meets in Maputo, Mozambique the organisation once a year to approve the work programme announced that it was now open to all and budget of the Centre.

SEAMIC is now an ISO 9001:2008 African states, with a mandate to provide mineral related quality services and testing certified institution, with state-of-theas well as consultancy work for the private art laboratories. “The facility provides and public sectors. The mission of the the member states and the private Centre is to “Promote socio-economic and sector, including small and large scale environmentally responsible mineral sector mining operations with geoinformation development in Africa.” and associated data processing services, The Director General Ketema Tadesse, who particularly geochemical and airborne served as Chairman of the Board of Directors geophysical data processing and mineral from 1997 until he took over the executive analytical laboratory services, for the entire leadership in 2006 to lead the organisation region,” he says.

8

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The work of the Centre is distributed across two major departments providing five technical services. These are: 1. Testing of chemical and environmental samples is carried out in the laboratories under the Chemical & Environmental Service, whose capabilities include whole rock analysis, X-ray fluorescence (XRF) and AAS/ICP-OES techniques, fire assay gold analysis and purification.

2.

M ineralogical, Petrological and Gemmological Service conducts analyses including X-ray diffraction technique; to name only a few of the techniques at its disposal.

3. Then there’s the Minerals Processing and Small Scale Mining Service that serves

big mining companies and small scale mining operations in processing and upgrading of different types of minerals and conventional bench scale operations; 4. Industrial Minerals Applications Service for bench scale industrial minerals product development mainly ceramic assay crucibles, tableware and other products; and 5. Geoinformation Services for geoscience data management and dissemination.

There are 35 permanent members of staff, with a core of nine professionals, five technicians and seven laboratory assistants.

The Kunduchi site covers a large area, Tadesse points out, and it needs its large warehouses to house all the rock samples it is sent for

A gem cutting training course practicing faceting of gemstones

150 | Special Report

seamic

“Our principal activity is making high tech analytical services available to major companies, to small scale enterprises, and also to our member states” archiving and sample preparation prior to analysis. The laboratories themselves are fully equipped and certified. Work on mineral processing, chemical and environmental analysis, gemmology and petrology (including a separate lapidary unit for working on grinding and polishing gemstones) all have their own separate sections, and there is another for industrial minerals.

On the one hand these facilities are working laboratories, providing services to clients – at cost (without any profit) both to member governments and the private sector clients, making this undoubtedly the best value-for-money resource available in Africa.

“Our principal activity is making these high tech analytical services available to major companies, to small scale enterprises, and also to our member states with a view to provide an incentive to developers and thereby accelerate mineral resources development in the member states,” says Tadesse. “And within the technical departments we also provide training in instrumental analysis, sample preparation, assaying gold and precious metals and a whole range of other specialisms for university students and the private sector.”

On the other hand this is a training facility, unique on the continent of Africa and possibly one of its best kept secrets. Demand for its

services will grow significantly as more states join SEAMIC, and the proposed students’ hostel at Kunduchi, for which the land has been set aside, will be built. Training is a significant source of funds for the Centre, though no fees are charged to universities and students sent by member governments and private companies are charged at cost.

Among the courses on offer are a three week gemstone cutting course for miners, dealers and other interested parties, mineral laboratory management, environmental analysis, ore beneficiation testing methods, geophysics and geoscience data processing, The lion’s share of SEAMIC’s income which is up to 60 percent comes from the US $62,000 annual contribution paid by each member state, while the remaining income of 40 percent is derived from the sale of other services and training activities, notably chemical and environmental analysis and the work done on samples by the minerals processing laboratory. A further source of income is consultancy work, gem cutting and identification, and ceramics. The last is a growing capability: the ceramics laboratory has produced low tension electrical insulators and fire clay crucibles for the regional markets, and now makes a range of tableware that is sold to support the work of the Centre.

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The geoinformation department deals with data processing and management as well as documentation and archiving data. This important work contributes to the mapping of geological data for the whole of Africa, and SEAMIC co-ordinates the submission of the survey data from different states to the One Geology portal, which aims to create dynamic digital geological map data for the whole world.

The information for Tanzania, Uganda, Kenya and Ethiopia has already been uploaded.

SEAMIC has achieved much under Ketema Tadesse but he has a number of other pressing objectives in his sights. One is to pursue capital projects through joint venturing – an example would be to establish a gold refining plant on the Dar es Salaam site. Another is to advance the goals of the African Mining Vision (AMV), which was adopted by Heads of State at the February 2009 African Union summit following the October 2008 meeting of African Ministers responsible for Mineral Resources Development. “It aims to make better use of Africa’s mineral wealth in ways that will benefits population and help them rise out of poverty,” he says. The AMV is a first and foremost developmental mining approach that insists that the road to growth is through building economic and social linkages that benefit Africa itself. The African

Mineral Development Centre (AMDC) an implementation body for AMV has been established by the African Union through the support of the United Nations Economic Commission for Africa (UNECA) and the African Development Bank (AfDB) which will make use of the services of SEAMIC’s Geoinformation facilities and expertise in realising this vision. This programme for the coming five years will be funded by the World Bank and the governments of Australia and Canada with the aim of collecting geoscience data and process the same; and analyse samples generated from explorations activities from all African countries. SEAMIC has the capacity to receive and analyse this data, and the Director is keen to see the agreement finalised.

A further goal is to set up a regional minerals analytical ‘fingerprinting’ laboratory for the eleven member states of the International Conference on the Great Lakes Region (ICGLR), headquartered in Burundi. Its main objective will be to install a high tech laser ablation mass spectrometry (LA-ICP-MS) analytical technique to pinpoint where particular minerals come from with the view to avoid exportation from conflict zones. The program is designed to stop illegal mining activities that are fuelling conflicts in the Great Lakes

“All the ore deposits in the Great Lakes region will be analysed and entered into a database” 152 | Special Report

seamic

Environmental samples analysis using Inductively Coupled Plasma (ICP) technique

Region. “All the ore deposits in the Great Lakes region will be analysed and entered into a database. Anyone wishing to sell a commodity will be obliged to send it to the laboratory for analysis to be established at SEAMIC. Once the samples are analysed by the LA-ICP-MS analytical technique the results are sent to Burundi to be matched against their master database. The benefits to these governments will be incalculable, and it will be a useful source of revenue for SEAMIC too.”

As set up, and as defined by its name, SEAMIC is a regional body. However as soon as it concretises its pan-African initiative and as other countries outside of the eastern and southern African region join the organisation, SEAMIC will have to drop its S and E and align itself with the new agency being set for

the whole of Africa, “... to create equitable, transparent and optimal exploitation of Africa’s mineral resources.” The African Minerals Development Centre’s creation by the AU and UNECA that was announced in March this year, is envisaged to benefit SEAMIC in the very near future as the data processing work that will result from the setting up of this new body will be allocated to SEAMIC. To make use of the expertise and the already installed laboratories invitations have been sent by SEAMIC to all mineral rich African nations to join the Centre.

For more information about SEAMIC visit: www.seamic.org

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WHERE THE WORLD’S MINERAL INDUSTRY MEETS

ONLY GOING TO ONE MINING INVESTMENT SHOW THIS YEAR? MAKE IT PDAC. March 2 – 5, 2014 International Convention, Trade Show & Investors Exchange Metro Toronto Convention Centre Toronto, Canada convention.pdac.ca/pdac/conv/

Prospectors & Developers Association of Canada