Mining Global - September 2017

TA L K I NG

BIZ WI T H

KENYA MINISTRY OF MINES

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KEFI MINERALS

AND MORE...

September 2017

ZINC

is in the ascendancy

Digging Deep

Inclusion and diversity in mining

Mining

Rated by personal net worth, Mining Global reveals the biggest players in the mining sector right now…

Billionaires Alexey Mordashov

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FOREWORD WELCOME TO THE September issue of Mining Global!

In the modern mining world, inclusion and diversity are becoming key in a global shift, one that will bring about a greater mining industry.

We speak with Beatrice OpokuAsare, Global Inclusion & Diversity Director of Newmont Mining Corp, as she has had to overcome challenge, stigma and lack of representation to fight for a better and more diverse mining world.

Zinc is in the ascendancy, as Ascendant Resourses wake a sleeping giant in Honduras amid a

miningglobal.com

global drive for zinc, fuelled by the technology sector. CEO Chris Bucinic takes us through the company’s flagship El Mochito mine and the future outlook for the zinc market.

Alexey Mordashov, CEO of Severstal, flies in at number one in our Top 10 Mining Billionaires.

Who else makes our who’s who rich list? Read on to find out.

We also shine a spotlight on Africa’s growing mining sector with special features on Ethiopia’s Kefi Minerals and, in Kenya, Base Titanium and an exclusive Q&A with the country’s Ministry of Mines.

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CONTENTS

F E AT U R E S

INSIGHT

06

Digging deep – inclusion and diversity in mining ZINC MINING

16

Zinc is in the ascendancy

TOP 10

26

Top 10 mining billionaires

C O M PA N Y PROFILES

36

Kefi Minerals

48

Kenya Ministry of Mines

56

Base Titanium

INSIGHT

DIGGING

DEEP – inclusion and diversity in mining

Newmont Mining Corporation’s Global Inclusion & Diversity Director is leading the company’s mission to change the industry for the better. We talk to Beatrice Opoku-Asare about the challenges she’s faced on her career journey, the successes she’s enjoyed, her work on the board of International Women in Mining and her hopes for the future Writ ten by: DANIE L BRIGHTMORE

INSIGHT BEATRICE OPOKU-ASARE’S ADMITS her journey towards her current role in the mining industry was not a typical one.

After gaining a degree in Natural Resource Management she worked for the Environmental Protection Agency in her native Ghana. “When I eventually joined the industry (with Golden Star Resources) my role was in the environmental space, doing analysis of trees and plants.

I’m more of a plants person than a people person!” jokes Opoku-Asare.

After moving into health and safety she gained hands on experience at pit level as a processing plant safety officer, leading to a role in health and safety training before she ended up in talent management in HR to focus on graduate training programs, helping new employees to assimilate while accelerating their development.

After leaving mining for a year to work in the tech industry, OpokuAsare returned with a deeper working knowledge of a customer-focused business and knew that focus could help her at Newmont. “When I came back to mining I wanted the employees and leaders I supported to feel like customers,” she says.

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September 2017

Newmont’s 2016 Beyond the Mine Sustainability Report

At Newmont, she started as a talent management specialist working on recruitment strategy, team sessions and succession planning.

“My role was soon expanded to support all areas of the businessleading talent management and acquisition, our emerging talent

DIGGING DEEP

program, global mobility (our region had the highest number of ex-pats), HR technology and inclusion and diversity,” she reveals.

It’s been a steady rise that has seen her work across five different roles during her seven years with Newmont. Now, based with her young

family in Colorado, the real work has begun with her latest position.

The great enabler “My role as Global Inclusion & Diversity Director at Newmont is to deliver on our diversity and inclusion strategy so that it becomes 9

INSIGHT

“We’re broadening the dimensions of inclusion and diversity so they go beyond the norms we see. That is the challenge, because our industry is very unique” – Beatrice Opoku-Asare, Newmont Mining Corporation’s Global Inclusion & Diversity Director

an enabling driving factor for the business,” Opoku-Asare explains.

“On our strategy map, we see employee engagement as a key element of delivering the business strategy. On a global level, it’s my job to create systems, structures and approaches to ensure inclusion and diversity is actually driving employee engagement and discretionary effort and in turn enabling business factors beyond our competitors to create a competitive advantage. I 10

September 2017

work with each of our regions who have an ‘inclusion and diversity lead’ helping to bring structure from a governance and strategic perspective while utilising their feedback to make sure it’s relevant for their region.”

However, Opoku-Asare admits when she joined Newmont, inclusion and diversity was not discussed and her role did not even exist. She cites the appointment of current CEO Gary Goldberg in 2013 as a turning point. After highlighting areas for improvement and taking the learnings from pockets of excellence globally, Newmont developed a strategy it began executing that very same year.

“We identified three key areas: our workplace, our workforce and our community,” Opoku-Asare says.

“In the workplace, we focused on the culture and creating an inclusive environment where people can leverage diversity by developing new skills and behaviours. Looking at our workforce we chose to zoom in on women and nationals. Our community focus was about partnering with external organisations to make sure we can access the talent we need and are putting Newmont out there when it comes to inclusion and diversity. Then,

DIGGING DEEP

in 2015, we refreshed our strategy to include the local community. We want to make sure we create an environment where local employees will flourish within our organisation.

The term we use is ‘local locals’ or indigenous peoples. For example, in Australia we have a policy of inclusion with the Aboriginal community. We’re now refreshing our global strategy towards 2018 which is why I moved from our Ghana office into this role.”

Defining diversity But what’s been the biggest challenge she’s faced in promoting a more

inclusive and diverse industry?

“I would say a lack of awareness, in terms of understanding what these words actually means,” Opoku-Asare concedes. “We’re broadening the dimensions of inclusion and diversity so they go beyond the norms we see.

That is the challenge, because our industry is very unique. I know other companies struggle but we have very good support at board level from our CEO and our board chair Noreen Doyle. Making the business case for inclusion and diversity should be just as important as anything else we focus on, like safety, efficiency,

11

INSIGHT

“Whenever you see an article about women in mining you’re probably going to see a woman in

a swimsuit with a hard hat!”

– Beatrice Opoku-Asare, Newmont Mining Corporation’s Global Inclusion & Diversity Director

12

September 2017

DIGGING DEEP

productivity, bottom line results… because we know it’s actually a key driver of all these metrics” Opoku-Asare is proud of the momentum Newmont has achieved with its expanding global network of business resource groups (17 and counting) which are employee led, established and run with help from executive sponsors.

“We have a diversity group which focuses on multicultural awareness creation and cultural agility,” she says. We also have a group looking at advancing the role of women. And we have a veteran’s business research group supporting transitions within our community and another covering wellness and health. We also have our ‘local locals’ business resource group in the Peru office focusing on our indigenous employees and enabling their status in the business.

“People don’t get paid for doing this work it’s their passion. They are starting the conversation and providing a comfortable forum for people to share ideas, solve problems, speak up and learn. For example, when a manager joins a business research group he can better serve and interact with a new

employee arriving from a different country. It’s been a huge success.”

International Women in Mining Alongside her work for Newmont, Opoku-Asare also sits on the board of International Women in Mining.

“We’ve started a lot of programs and recently launched an ongoing photo competition because we realised that whenever you see an article about women in mining you’re probably going to see a woman in a swimsuit with a hard hat!” she laughs indignantly.

“Research has shown that what we see influences what we do and how we think, so it was important to challenge assumptions and show more positive images of real women (who make up 17% of the workforce) in the mining industry. I’m privileged to have the opportunity to do that.”

But on a personal level, what’s been the biggest challenge she has faced as a woman in the industry?

“Again, it’s about awareness,” maintains Opoku-Asare. “People may make comments or show behaviour which happens because we haven’t had conversations about how that behaviour impacts someone.

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INSIGHT

“We need to learn to develop skills to tap into somebody else’s difference while building on what we have in common” – Beatrice Opoku-Asare, Newmont Mining Corporation’s Global Inclusion & Diversity Director

“For example, if someone says a particular job might be more difficult for a woman, that is a tough situation.

Unconscious bias exists and I over compensate because I’m a woman.

From early in my career I’ve gone out of my way to prove that I belong and to prove that I wasn’t given a role just because I was a woman. In Ghana, where we had a number of expats, I would over compensate to make sure I’m showing a national who is really bringing it to the people.”

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September 2017

She explains that she’s learned to see past the bias and just get on with her job. “The pressure of all women in the world is not on my shoulders so I just need to show the best of myself as an individual to change the culture.

If I want to be part of that change then I have to step up and support other women with the language to have these conversations and create an environment for discussion. I want to be part of the success story.”

It’s a success story Opoku-Asare’s

DIGGING DEEP

already shaping but her ultimate goal for the future is a simple one, and typical of a woman not concerned with ego but has the urge to help others in spades.

“Ultimately, I want a role like mine to not have to exist,” she confesses.

“Because I want the journey to reach a point where we can leverage difference – whether age, race, gender or sexual orientation – for positive effect. Everybody fits into this picture because it’s all about diversity of

thought, experience and background.

I want people to be curious about differences and not see them as a threat. The prospect of getting to that point is what really motivates me. We need to learn to develop skills to tap into somebody else’s difference while building on what we have in common.

I would really love for the industry to come together to discuss inclusion and diversity in the same way and progress to make it a competitive advantage for the industry as a whole.”

15

ZINC MINING

Zinc is in the ascendancy

Ascendant Resources is waking a sleeping giant in Honduras to capitalise on the ramped zinc pricing environment fuelled by demand from the tech sector. President and CEO Chris Buncic tells us how they do it down in El Mochito

Writ ten by: DANIE L BRIGHTMORE

ZINC MINING

ASCENDANT RESOURCES IS on track to become a major player in the zinc market and take advantage of increasing demand from the technology industry in batteries and protective coating.

The company’s stewardship of the El Mochito mine in Honduras began in 2016 and looks set to reap major rewards. Operating for almost 18

September 2017

70 years (since 1948), the mine has proven consistently rich in lead, silver and zinc deposits. However, ownership changes since the nineties - with their short-term strategies and increased management turnover - led to diminished productivity; something Ascendant is on a mission to improve through a back to basics “mining 101� approach.

ZINC IS IN THE ASCENDANCY

One to one with Chris Buncic, Ascendant Resources President and CEO

It’s a practical approach company President and CEO Chris Buncic (a recent recipient of the CIM Bedford Canadian Young Mining Leaders Award) believes will bring dividends.

Buncic gained a diverse range of experience before taking the reins at Ascendant (formerly known as Morumbi Resources). A mechanical engineer for six years in the product

development field, after he received his MBA from the Schulich School of Business at Toronto’s York University, he also spent six years in institutional equity research at two Canadian brokerage firms Cormark Securities and Mackie Research Capital - before starting out in the mining industry in 2013.

“My financial background helps 19

ZINC MINING

“It’s critical for

us that everybody who comes to work here goes home, so

that’s a challenge

we’re ready to meet as we accelerate operations” – Chris Buncic, President and CEO

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September 2017

me with strategy,” maintains Buncic. “I can evaluate potential M&A (mergers and acquisitions) transactions and the breadth of what I’ve done managing cross-functional teams, throughout the reinventions of my career, gives me a good mix of experience which supports my ability to run this company.”

With Buncic at the helm, the company’s plans for El Mochito are just the start. “Ascendant Resources is a resource company focused on the acquisition of mining assets we think we can extract value from but are priced and financed in a way that we know are accretive to shareholders on a risk-adjusted basis,” he explains.

“We go out there to find deals we think we can add a lot of value to and get priced appropriately, or inexpensively. With the El Mochito acquisition, we’re executing on that strategy. Our first task is to get the operation back to positive with regards cashflow, and that’s on a sustainable basis. Then we can widen our focus to consider other acquisitions in Central America.”

Buncic concedes the biggest challenge ahead is to increase the mine’s throughput while furthering

ZINC IS IN THE ASCENDANCY

horizontal development towards higher-grade ore. “We recognised El Mochito had a lot of issues when we took it over,” he says. “Underinvestment during the sale process has required that we catch up on underground development and infrastructure. We’ve also made great strides in repairing the relationship between the company and its workers.

It was strained through a lack of visible leadership and the general uncertainty brought on by low production rates and few plans for growth.”

People power The El Mochito mine is one of the largest employers in the Honduran municipality of Las Vegas (population, 70,000) and, as a significant contributor to the country’s GDP and foreign reserves, Buncic recognises the importance of the mine to its homeland and wants his company to be good corporate citizens. “We communicated our plan to the community to invest in new equipment and restore the operation to its former success.

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ZINC MINING

“We have a talented team in place with more than a decade of experience at the mine so we will add exploration to expand the resource” – Chris Buncic

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September 2017

ZINC IS IN THE ASCENDANCY

We’re proactively working with them, and the union, on an ongoing collective bargaining negotiation.”

Buncic is keen to nurture a workforce he knows is integral to the mine’s success and stresses their safety is key: “It was a challenge for previous owners Nyrstar as the mine had fatalities in the past. It’s critical for us that everybody who comes to work here goes home, so that’s a challenge we’re ready to meet as we accelerate operations.”

When asked what he considers Ascendant’s greatest successes so far with the El Mochito project, Buncic is keen to focus again on the workforce: “Gaining alignment with the employees of the mine at all levels of the operation is something we’ve had success with and will continue to work on. We’ve shown we’ll be a positive force in restoring the mine for our mutual success which has had a positive effect in the community. We’ve had great support from the local mayor as well as the federal government.”

By implementing a series of short term management projects, Ascendant has been able to fix many operational problems to help drive

throughput. “An example would be getting our cycle times up in hauling ore to the bottom of the shaft,” offers Buncic. “There’s a 2,300-ton-per-day concentrator flotation mill that’s in great working order, and the shaft has a 4,000-ton-per-day hoisting capacity, so there’s no problems getting ore up the shaft, it’s really about getting the ore to the bottom of the shaft from the face. It’s a logistical and training issue to increase our cycle times; and then it becomes a supervision issue.”

Allied to cycle times, Ascendant has implemented critical shift changes on its trucks. “We’ve gone from three eight-hour shifts to four,” he says. “Because the distance from the headframe on the surface to the working face can take 45 minutes to get to and back, then with 30 minutes for lunch, you’re losing a lot of time during the day. With that fourth shift, we’re changing over at the truck and going from 15 to 22 productive hours in a day. That gets utilisation of equipment up and more ore to the bottom of the shaft.”

With greater utilisation comes an even greater need for implementing preventative maintenance programs.

With a fleet entering its eighth year of 23

ZINC MINING

“It’s a priority to make sure all stakeholders of the operation - including employees, the local community and the environment - are taken care of” – Chris Buncic

service, Ascendant is moving away from working in “failure mode” and actively tracking KPIs (key performer indicators) related to equipment and making improvements where necessary. This all helps the company to work towards its goal of stability and hitting a production target of 2,200 tons per day or greater.

What lies ahead Buncic expects El Mochito to continue to operate for several more decades, at the very least, just by exploiting the resource already believed to exist. Taking a long view towards the mine’s sustainability is why 24

September 2017

Ascendant take its corporate social responsibility (CSR) so seriously.

“There were programs in place we’re continuing to support,” says Buncic. “It’s a priority to make sure all stakeholders of the operation - including employees, the local community and the environment are taken care of. We’re supporting locally and nationally with the foundation for CSR in Honduras; we’ve received eight awards for that due to our initiatives at the mine through AMPAC, the company we inherited.

“The CSR team at El Mochito participates in community development through reinvestment

ZINC IS IN THE ASCENDANCY

in educational programs and we support a hospital. We’re partnering with the local government and local non-profits to construct and operate the Central Educational & Vocational El Mochito. This technical school on site will have several courses on offer ranging from welding, electrical, geology and chemistry to develop local skills in the country.

We’re also committed to battling low nutritional levels with a school meals program supporting 750 local children. It’s vital for us that El Mochito is a mine for Hondurans and that they’re considered for important employment roles, which works alongside our strategy of giving El

Mochito back to the residents.”

Buncic is full of enthusiasm for Ascendant’s future and the future of El Mochito. “We have a talented team in place with more than a decade of experience at the mine so we will add exploration to expand the resource,” he promises. “Then we will be able to justify expansion of the mill and potentially go north of 3000 tons per day. But we need to make sure that makes sense with our exact pricing and mine-life projections because we’re growing a company long term and we would like to grow Ascendant Resources into a really large company!” With his drive and focus, don’t bet against it.

25

TOP 10

Rated by personal net worth, here are the biggest players in the mining sector right now‌ Edited by: ANDREW WOODS

TOP 10

9 VLADIMIR POTANIN

10 ALBERTO BAILLERES GONZALES According to Forbes, the Mexican billionaire has a total net worth of $11bn, although not all of it is derived from mining. Gonzales serves as a chairman of ITAM and Grupo BAL, and also is on the Fresnillo plc Board of Directors. Penoles, one of the companies that he controls, is the largest producer of silver in the world and one of Mexico’s top mining companies. Much of Gonzales’ wealth from mining bolsters his other companies, including pension firms, bullfighting, department stores, financial services and Mexican CocaCola bottling company FEMSA. 28

September 2017

Potanin was the richest miner in the world for quite some time, with holdings in palladium, copper and platinum companies. Potanin’s main holdings however are in Norilsk Nickel.

Potanin formed Uneximank in 1993 to gain control of Norilsk Nickel, Sidanco and Interros. Potanin has built a personal net worth of $13.8bn and spent a great deal of his time after this initial mining success, investing in the Russian Olympic presence.

Potanin is also a part of Giving Pledge; an agreement between many of the world’s most successful billionaires to give a majority of their wealth away to charity before their death.

TOP 10 MINING BILLIONAIRES

7 ALISHER USMANOV

8 GERMAN LARREA MOTA VELASO Velasco is at the head of one of Mexico’s richest families, who together own just under half of Grupo Mexico. Grupo Mexico is the country’s biggest infrastructure and mining business, and also produces the third largest amount of commercial copper in the world. As a head of the Velaso family, he has an enormous amount of influence over the holdings of Grupo Mexico, including railroad company ITM, Americas Mining Corporation, and influences in many airport operators.

Velaso’s personal wealth ($14.5bn) places him as the second richest person in Mexico.

The top miner in the world according to revenue is Alisher Usmanov.

Usmanov’s personal holdings in mining come to more than $14.8bn by some estimates, a number that does not even represent his peak. His wealth comes primarily from holdings in Metalloinvest, the steel and iron ore giant. Usmanov also has holdings in cell phone companies, soccer clubs and financial investments across the world. He is currently the third richest person in Russia.

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TOP 10

5 IRIS FONTBONA

6 GINA RINEHART Rinehart is another highly productive billionaire who has been recently affected by commodity prices.

Rinehart’s business is iron ore and low prices have hurt her net worth.

Despite this, she was the richest person in her native land of Australia for five straight years, having just been toppled from that position

by Harry Triguboff, the continent’s largest property developer. Rinehart maintains her wealth ($15bn) through a joint venture with Hope Downs, Rio Tinto and the Roy Hill Project.

She remains the largest miner in Australia, just edging Andrew Forrest of Fortescue.

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September 2017

Beverage and mining make Fontbana (net worth $15.3bn) and her sons the richest family in Chile. Iris is the widow of Andronico Luksic, who founded the Luksic Group in the 1950s (he died of cancer in 2005). Their Santiagobased mining company Antofagasta primarily mines copper, although the family has expanded into agriculture, manufacturing, transportation and metals. Antofagasta also owns many Chilean copper mines and has a majority stake in Quineco, which is one of the biggest conglomerate companies in Chile.

TOP 10 MINING BILLIONAIRES

3 VLADIMIR LISIN

4 WANG WENYIN Amer International is one of the world’s biggest cable and copper suppliers and Wenyin stands at its head. Working his way up from a warehouse position in his native China, Wenyin began his entrepreneurial career as a power cord supplier. That company now employs over 15,000 people and has its own production facilities and mines. Wenyin controls around 1000 sq kms of mining land in China and over 10,000 sq kms of mining area across the world. Wenyin reported sales of over $40bn each year from 2014 to 2016, and he also holds a minority stake in Colorado’s General Moly. Wenyin is worth over $15.4 bn according to some estimates.

Lisin is in the steel business and serves as the Board of Directors’ chairman of Novolipetsk; the biggest producer of steel in Russia. Lisin is also in control of many other ventures that add to his substantial net worth of $16.1bn, including Universal Cargo Logistics Holding. Lisin expands on the reach of his mining companies by controlling numerous ports and shipping companies that form essential parts of the supply chain.

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TOP 10

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September 2017

TOP 10 MINING BILLIONAIRES

2

LAKSHMI MITTAL

Mittal serves as the CEO of ArcelorMittal, which is the biggest steelmaking business across the globe. Although his net worth has dropped in recent years due to commodity process, he is still far ahead of most of his peers in terms of professional output. He is still the world’s largest steelmaker despite a 20% drop in revenue in 2015. The peak of Mittal’s net worth was over $69bn in 2008, at the height of steel prices. He is still the sixth richest person ($16.4bn net worth) in his native India.

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TOP 10

1

ALEXEY MORDASHOV

Mordashov is no longer the CEO of Russian steel company Severstal, but he still owns a majority stake in the company through his stock; he served 19 years as CEO. Mordashov also holds stakes in Nordgold, TUI Group and Silovye Mashiny, which deals in gold, tourism and power engineering, respectively.

Mordashov is currently the second richest individual ($17.2bn) in Russia.

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September 2017

TOP 10 MINING BILLIONAIRES

35

KEFI MINERALS: STRIKING GOLD WITH ETHIOPIAN EXPERTISE Written by: Laura Mullan Produced by: Richard Deane

As Ethiopia becomes the fastest growing economy in the world, KEFI Minerals looks set to lay the foundations for the country to become a major player in the mining market, all through its flagship Tulu Kapi Gold project

H

idden in the remote hills of Western Ethiopia lies the Tulu Kapi Gold Project - a lucrative mining operation owned

by KEFI Minerals. Thanks to the company’s hands-on business approach, Tulu Kapi Gold Project will not only generate an impressive gold yield once operational in 2019, it will also make a lasting contribution to the local community.

Executive Chairman of KEFI Minerals, Harry Anagnostaras-Adams, has an impressive portfolio of work - stretching from Europe to Africa, Australia, and the Middle East. But it is

38

September 2017

the company’s projects in the ArabianNubian shield, such as the Tulu Kapi project, which he believes are gamechanging. “Some of the team at KEFI Minerals are from Western Australia, an area which is geologically similar to the Arabian-Nubian shield, and so we feel we know what’s going to happen,” says Anagnostaras-Adams.

“The Arabian-Nubian shield including Ethiopia and Saudi Arabia - will go through a transformation over the next few decades to become one of the world’s major mining and metal production regions. Therefore, we feel that we are being focused enough, and

AFRICA

980,000oz

Open-pit gold output forecast at Tulu Kapi over 10 years

careful enough, and successful enough to establish a platform there and be a part of that from ground zero.”

Trenching work at the Tulu Kapi gold project

Gold sample from the surveying work

Ethiopia’s gold rush According to the World Bank, Ethiopia is now the fastest growing economy in the world, meaning that investment, particularly in gold, is high on the country’s agenda. “It’s a completely transforming country,” notes Anagnostaras-Adams. “It’s changing its education system, its infrastructure, it’s investing in energy, and industrialisation is booming.”

Spotting the opportunity to invest in 2015, the Ethiopian government backed the Tulu Kapi Gold Project by granting it a mining licence and in doing so, became entitled to a 5% free-carry interest in the mine. It’s an alliance that AnagnostarasAdams describes as “critical” to the success of the company and one which it strives to maintain.

However, it’s not just the government’s financial push which is crucial to the London-listed firm.

“Part of the relationship is about funding,” reflects Anagnostaras-Adams, “but another part of it is about dealing with social issues in the area.

“We want to ensure the community is a strong

miningglobal.com

39

KEFI MINING

IAN PLIMER Non-Executive Director

FABIO GRANITZIO Group Exploration Manager

40

September 2017

“The ArabianNubian shield including Ethiopia and Saudi Arabia - will go through a transformation over the next few decades to become one of the world’s major mining and metal production regions” HARRY ANAGNOSTARAS ADAMS Executive Chairman

AFRICA

KEBEDE BELETE Country Manager Ethiopia

NORMAN LING Non-Executive Director

JEFF RAYNER Adviser Exploration and Corporate Development

miningglobal.com

41

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backer of the mine, not just tolerating it, but actually wholeheartedly supporting it and I think the government’s involvement as a partner is critical in that capacity.

“It’s important that the local community and population recognises that it’s important for the country and it’s a true partnership. It’s not just foreigners coming in to exploit minerals but it’s foreigners coming in to introduce training and other benefits to the community and country at large.”

Bringing about positive change KEFI Minerals and the Ethiopian government both strive to sustain this win-win relationship - however, ultimately, the key beneficiary from the partnership is the local community. Through workforce training, infrastructure development, and creating a local supply chain, KEFI Minerals has already begun to leave a lasting legacy in Ethiopia.

“The community undeniably has more infrastructure, more livelihood

Geologists taking structural measurements in the core yard

miningglobal.com

43

K E F I M I N E R A L S LT D

opportunities, and more economic opportunities than ever,” says Anagnostaras-Adams, “but the really important thing that we provide is the supply chain and the employment because that provides a significant flow of money to the community.

“Clearly from a social value point of view, our business wants to bring benefits, training and skills to the country, rather than just importing labour and exporting materials. But even from a purely financial point of view, you can see that the stability, cost base, and commitment of the workforce is far greater if you can source work and embed it into the local

“For us, the key is to be hands on, embed ourselves in the country, and build relationships from the ground up” HARRY ANAGNOSTARAS-ADAMS, EXECUTIVE CHAIRMAN, KEFI MINERALS 44

September 2017

community as much as possible, rather than employing foreign workers.”

A high grade and low cost project The emerging gold miner first acquired Tulu Kapi back in 2014; a significantly advanced project that had seen $50mn of investment from an English-based consortium. “We took the project back to square one,” notes AnagnostarasAdams, “and that transformed the economics of it on paper.”

From carefully tweaking the mining method to reviewing the data base, KEFI Minerals has significantly developed the mine plans further, aiming for a late 2019 production date.

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K E F I M I N E R A L S LT D

This notably enhanced the efficiency of the mine, which AnagnostarasAdams says will establish Tulu Kapi as a high grade and low-cost project.

Open-pit gold production is forecast to hit 980,000oz over 10 years, however, this development would not have been possible without the help of contractors Ausdrill and Lycopodium, who are viewed more as partners for the firm.

The two heavyweights bring over

20 years of experience working in the mining industry in Africa. “They are a vital key to the ongoing development of the project and the wider company,” says Anagnostaras-Adams. “They have such a long record of success in different African mining countries and therefore they are well equipped to bring their training systems and experiences to a new Tulu Kapi.

“Their roles are very far-reaching

1.0mn

1.7mn

ounces Probable Tulu Kapi ore reserve 46

September 2017

ounces The total mineral resources at Tulu Kapi

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In the remote hills of Western Ethiopia lies the Tulu Kapi Gold Project - a lucrative mining operation owned

by KEFI Minerals

for us - they are the foundations of our HR management, of our operational management, and our financial management - so our relationship couldn’t be any more important.”

Forging relationships on the ground With two operational mines and a cost-effective portfolio to explore, KEFI Minerals has big ambitions for the region. But in an industry that is constantly evolving, how can KEFI Minerals stay one step ahead?

“Our business style is that we run a very small head office in Cyprus, but everyone else is based at the sites where the action is. I spend more time myself in Saudi Arabia and Ethiopia than anywhere else,” says Anagnostaras-Adams.

“For us, the key is to be hands on, embed ourselves in the country, and build relationships from the ground up which is where the relationship with the government comes in - they see the commitment of the people on the ground. So that’s our philosophy, that’s our style, and as we grow it will be our challenge to grow and still maintain that. I like to think that it sets us apart.”

In the four years spent developing Tulu Kapi, working with local and national stakeholders, KEFI Minerals has developed the mine plans in a cost-effective manner and has done so whilst making an active, positive and long-lasting contribution to the locality.

Through Tulu Kapi, KEFI Minerals laid the foundations for Ethiopia to one day become a major player in the mining industry.

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Headline for AN INTRODUCTION an company FROM THE KENYA MINISTRY report OF MINES

Written by xxxxx Produced by xxxxx Written by: Dale Benton Produced by: Richard Deane

M I N I S T RY O F M I N E R A L R E S O U R C E S

Dan Kazungu, Cabinet Secretary, Ministry of Mining, Republic of Kenya, introduces our special focus on the growing mining sector in Kenya CAN YOU GIVE US A BRIEF HISTORY OF THE MINISTRY OF MINES IN KENYA? The ministry of mining was established in 2013 through a decision by president Uhuru Kenyatta to create a new ministry mandated solely to grow the mining sector after having been given prominence by vision 2030 pillar seven, which identified mining or the extractives sector as a key contributor to a diversified economy with the potential for jobs and wealth creation for Kenya.

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WHAT IS THE HISTORY OF THE MINING SECTOR IN KENYA? Traditionally, mining was not the primary focus for Environment and natural resources management - mining was largely ignored. Its therefore no wonder that Kenya never realized the full potential of mining until 2013 after President Uhuru Kenyatta’s administration whose transformation agenda included bringing mining to the forefront.

With that, Kenya’s mining journey began in earnest and the country

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kicked off on a reform agenda to transform mining to be more inclusive, modern, ensure the sector attracts responsible investors and to legitimize artisanal and small-scale miners while having community (Kenyans) benefits taken care of.

WHAT IS THE ROLE AND THE VISION OF THE MINISTRY IN TODAY’S INDUSTRY? The goal of the ministry is to transform mining to become a key contributor to the economic growth and transformation of the country. The aim is to see growth and GDP in the mining sector hit double digits. We see Kenya as a hub for mineral trading and value addition for east and central Africa, leading in technical expertise, logistics, funding for mineral projects and services. We have plans to consolidate leadership through the set-up of a regional mineral and metals exchange.

To achieve this, the ministry is tasked to promote Kenya as a minerals hub for players across the board by carrying out the right reforms and creating an environment that ensures that mining

investments thrive based on a win-win formula, i.e. for the investor, national government, county government and the communities. The ministry is making deliberate efforts in the spirit of inclusivity to Kenyans who have been excluded from the mining eco-system to now be a part of it. In addition, efforts are being made to attract large-scale mining in the country to bring in investment, technology transfer, technical expertise and highly specialised jobs and opportunities.

CAN YOU TELL US ABOUT THE CHANGING FACE OF KENYA’S MINING INDUSTRY? As a country Kenya is proud to state that in the first year of its reform, efforts to create a robust mining climate have started to bear fruit. According to the global mining investment attractiveness index by the Fraser institute, Kenya has jumped 16 places up to position 86 in 2016 from position 102 in 2015 in a global mining attractiveness survey.

Today, Kenyans are more aware of the opportunities in the mining sector (especially artisanal miners) that are

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now claiming their space encouraged by the progressive mining law in place.

Small and Medium Scale miners are showing increased interest too.

Exploration and mining companies are in Kenya carrying out exploration leading to the announcement of what is considered the biggest gold discovery on the continent - 1.3mn ounces of inferred gold along the Liranda corridor in Ikolomani in Western Kenya.

Large-scale mining investments are coming to Kenya for example Base Resources (Base Titanium) that is the single largest mining company in the country, Acacia Mining, Gold Plat, Tata (Magadi soda), Lafarge limestone project.

WHY HAS IT TAKEN SO LONG, IN YOUR OPINION, FOR KENYA TO REALISE THE ENORMOUS ECONOMIC POTENTIAL OF ITS NATURAL RESOURCES? It all comes down to leadership and vision. Over the years industry players have been talking about mining opportunities. It takes leadership to transform this, to real worth. This

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is what formed the vision to grow Kenya’s into a medium sized economy.

The other reason is socio-economic socialisation as over the years, Kenya was presumed to be an agricultural economy and so little attention was paid to mineral exploitation.

YOUR MINISTRY’S WORK, LEGISLATION AND COLLABORATIVE APPROACH HAS BEEN PRAISED BY SOME OF THE MAJOR MINING OPERATIONS IN THE COUNTRY. HOW IMPORTANT IS TO MAINTAIN GOOD RELATIONSHIPS? As a country, we believe strongly that to create a robust investment environment, relationships are extremely key and not about shortterm gains. Mining projects are by nature long-term and therefore the relationships built should be longterm. This is the natural habit to adopt, not just to please investors but also to create a “win-win-win-win” in the sector. This is the only sustainable way; – win for the investor who takes the risk (sometimes massive

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“As a country, we believe strongly that to create a robust investment environment, relationships are extremely key and not about short-term gains�

DAN KAZUNGU Cabinet Secretary Ministry of Mining, Republic of Kenya

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risks) and creates jobs, win for the national government that creates the enabling environment for investments to flourish and prosper, win county governments as that is where all mining projects are established and last win for the local community as Kenyans are the core beneficiaries of the mining activities in the country.

WHAT OTHER WORK IS THE MINISTRY DOING TO SEEK OUT NEW POTENTIAL AREAS FOR EXPLORATION? Private companies such as Base Titanium carry out geological surveys that share data with the ministry, which

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is encouraged practice. The country has put in effort to do a comprehensive nationwide airborne geophysical mapping survey in order to identify new potential areas for mineral discovery.

Both investors and government have been keen to have the latest data on minerals in the country. The finalisation of this survey will be a key milestone for Kenya’s mineral development, as it will drive key interest and attractiveness to Kenya as a modern mining jurisdiction.

YOU HAVE CREATED AN AMBITIOUS 20-YEAR STRATEGY FOR THE SECTOR WITHIN THE 2030 VISION. TELL US ABOUT

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IT AND WHETHER YOU FEEL YOU ARE ON COURSE? WITH ELECTIONS APPROACHING, HAVE YOU LAID A FIRM FOUNDATION? Kenya’s 20-year strategy is part of what we call the 6-pack initiative that was a realization that in order to promote an attractive and robust proper mining environment, six key components have to be achieved; the strategy itself that outlines how Kenya will leapfrog this mining journey to become a key player in the region and in the world, mining policy that aims at creating the right environment for reform, repealing old laws and building institutions while looking at issues of inclusivity and environmental concerns, Mining Act 2016, the most progressive mining law in Africa, the mining regulations to enable the implementation of the mining law, a fiscal Policy framework to ensure Kenya has both an attractive and competitive tax and royalty regime and finally availability of the latest data.

The idea here has been that for the country to get its basic right by laying the foundation for a successful sector.

Kenya has also learned lessons from

her peers in mining that if the basics are not in place, things can go wrong.

CAN YOU DETAIL THE IMPORTANCE OF EVENTS SUCH AS THE KENYA MINING FORUM TO HELP PROMOTE THE SECTOR NATIONALLY AND INTERNATIONALLY? The Kenya Mining Forum and other such like events are designed to bring investors into the country and the entire region for them to experience first-hand Kenya’s mining sector. The first edition of the KMF in 2016, attracted close to 400 investors from 15 nationalities.

The second edition is expected to be even bigger than the first.

TELL US HOW IMPORTANT YOU THINK THE UPCOMING MINING FORUM IS IN NOVEMBER. I welcome you all to Nairobi for the second edition of the Kenya Mining Forum in November. We are ready to network, share thoughts and experiences and above all we want to do business because Kenya is open for Mining Business.

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KENYAN MINING ON THE RISE Written by: Dale Benton Produced by: Richard Deane

BASE TITANIUM, A CRUCIAL PLAYER IN KENYA’S EMERGING MINING MARKET, HAS BEEN FORMALLY ACCREDITED BY KENYA VISION 2030 AS ITS FLAGSHIP MINING PROJECT

T

he Kenyan mining industry is on the rise. Historically, the country focused on agriculture, tourism, services and manufacturing as its main economic pillars, but in recent years, that focus has begun to shift towards extractives – both oil and mining.

“In the past mining was not seen as a significant sector of the economy – that is until Base Titanium’s Kwale Mine entered into production in early 2014,” says Joe Schwarz, General Manager – External Affairs and Development, Base Titanium. “The industry is now contributing around 1% to the GDP, but with increased interest in extractives and a friendly investment climate that will increase.”

FLYING THE FLAG FOR KENYA In 2013 the Government of Kenya created, for the first time, the stand-alone Ministry of Mining in recognition of the emergence of mining, led

by Base Titanium, as an increasingly important sector of the economy with real growth potential.

“Establishing the Ministry of Mining has really given the mining industry in Kenya a new focus and impetus,” Schwarz says. “With the Ministry and Base Titanium working collaboratively to promote further

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An aerial view of dozer mining in the Central Dune at Base Titanium’s Kwale Mine.

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B A S E T I TA N I U M

“It’s absolutely vital that we play our part, we are guests in the community and must obtain a social license to ensure a harmonious and mutually beneficial operating environment” – Joe Schwarz, General Manager – External Affairs and Development

Magaoni Secondary school built by Base Titanium.

The company is investing heavily in local education.

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Sorghum – one of the crops supported under the livelihood programme.

investor interest in the sector, we stand as a benchmark for others to emulate.”

This relationship with the Ministry of Mining is important, not only for Base Titanium, but for any future mining projects in Kenya that will contribute to the achievement of country’s Vision 2030 objectives of establishing Kenya as a middle-income country by 2030.

For Schwarz, that relationship with the Ministry is crucial in jointly driving the mining agenda by attracting serious investment into exploration and development in

a mutually beneficial manner.

Collaboration is key and this has also allowed Base Titanium, through the Kenya Chamber of Mines, to work closely with the Ministry of Mining on formulating the Mining Regulations after the Mining Act 2016 took effect in May last year.

“We provided significant input to the public review process.

With this positive relationship we are able to exchange views in a constructive manner to achieve a balanced outcome,” Schwarz says.

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B A S E T I TA N I U M

“As Kenya’s leading mining company, working with the Ministry, we have also had opportunities to jointly promote Kenya as an investment destination.” “Being the preeminent mining company in the country, we shall again be playing a leading role in supporting the November 2017 edition of the Kenya Mining Forum as its main sponsor,” Schwarz adds.

“We fully support Mining Cabinet Secretary Dan Kazungu’s philosophy

Building skills in mineral processing.

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of making Kenya a predictable, stable and attractive investment destination and work with the government to showcase the country at events such as this.” This forum is the premium annual mining investment event, showcasing Kenya’s potential and ‘open for business’ stance.

LEADING FROM THE FRONT Construction of the Kwale Mine was completed in 2013 and the first shipment of ilmenite left its port facility in February 2014. Since then a number of process optimisations have been successfully completed to improve efficiencies and debottleneck the plant. Hydraulic mining has been successfully introduced and will ultimately replace dozer mining and the wet concentrator will soon be uprated to fully utilise the minerals separation plant capacity as mining moves to lower grade areas.

In the fourth year of its 11-year mine life, 2017 proved to be a highly successful year for the project. Over 10mn tonnes of ore were mined leading to a combined 671,000 tonnes of ilmenite, rutile and zircon

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being exported as the market for all three products showed signs of significant improvement.

The importance of Kwale to the Kenyan mining industry is amply illustrated by the fact that it now contributes close to 60% of the total value of Kenya’s minerals output.

Regional exploration to extend the life of the mine is one of the company’s key future growth strategies. The initial phase has been successfully completed and plans are in hand for further exploration in the coming year.

But for Schwarz, the success of the Kwale Mine and Base Titanium extends well beyond its core mining operations. He also measures the success of the company through its role in building the mining economy and giving back to its host communities by improving their livelihoods in a sustainable manner.

“The cornerstone of our philosophy is the flow of mutual benefits,” he says.

“It has to be win-win for everyone, all the stakeholders must share in the benefits – Government, investors and the local communities.”

During the construction phase of

Spirals in the wet concentrator.

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B A S E T I TA N I U M

the project Base Titanium spent one third of the $320mn capital cost with Kenyan suppliers and contractors.

THE COMMITMENT TO MAXIMISING LOCAL CONTENT DIDN’T END THERE In operation, the company continually aims to maximise local procurement, spending $37mn annually (or 84% of the total) on spares, consumables and services purchased from local suppliers. In all, Base Titanium expects to contribute close to $1bn to Kenya’s 64

September 2017

GDP through the period of 2015-2025.

“Viewing direct revenues from a mining operation of this scale in isolation is to see only a quarter of the picture” he says. “The indirect and induced economic stimulus generated beyond this through wider employment creation, the supply chain, consumer spending and taxation is enormous in comparison.”

ENHANCING A COMMUNITY For any mining operation, the role of the local community can never be

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Ship loading at the dedicated port facility. In 2016 the Kwale Mine accounted for close to 60% of Kenya’s mineral output.

underestimated. Base Titanium has proven that it is a key contributor to the Kenyan economy, but how is the local community benefitting?

To date, the company has invested $10mn in four pillars of community development; social infrastructure, livelihood enhancement, health programmes and education.

“It’s absolutely vital that we play our part, we are guests in the community and must obtain a social license to ensure a harmonious and mutually beneficial operating environment,”

Schwarz says. “Such benefits need to be tangible and sustainable.”

Base Titanium has built a number of schools and health facilities, sunk community boreholes and supports various medical campaigns such as immunisations and training community health workers. Provision of secondary and tertiary scholarships has so far benefitted close to 1,000 students from needy families.

“The centre piece of our community programmes right now is creating and supporting miningglobal.com

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opportunities for sustainable livelihood enhancement,” Schwarz says.

This has seen the company work on multiple agricultural programmes, taking farmers, groups and communities from just subsistence towards sustainable commercial agriculture in cotton, potato and sorghum production. Base Titanium is working with governmental and non-governmental organisations, including international partners, to enhance these programmes and to connect the farmers with markets for their products.

programmes to address competency gaps and enhance skill levels of our existing employees; also, a range of external programmes are run, including apprenticeships, student attachments, a graduate training scheme and imparting artisan skills to neighbouring community members.”

Currently 970 people, including outsourced service contractors, are employed at the Kwale Mine.

Reflecting the company’s commitment to prioritise job opportunities for

THESE, SCHWARZ SAYS, ARE EXAMPLES OF THOSE REAL AND TANGIBLE BENEFITS Earlier this year, a report from the Zambia Chamber of Mines revealed that the global mining industry is facing its most significant skills shortage in decades, and Base Titanium is all too aware of the importance of providing employment and training opportunities.

“One of our key programmes is training and skills development,” he says. “This includes internal training

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Cotton harvesting in full swing

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locals, 65% of these employees are drawn from Kwale County. A clear barometer as to the effectiveness of its training programmes is the reduction by 50% of its expatriate complement over the last three and a half years.

“All this feeds into our succession planning. By empowering people with the right skills and experience, Kenyans are progressively taking over most technical and management roles from expats,” Schwarz says.

“It’s a clear illustration of the success

of our investment in training to empower the local community and Kenyans in general.”

Mining needs to be at the forefront of economic growth if Kenya is to achieve its Vision 2030 goal of becoming a middle-income country in the next 13 years. Schwarz says. “We fully support the endeavours of the government to transform the mining sector into an increasingly significant contributor to employment, exports and the socioeconomic growth of the country.”

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Developing Future African Cities 25 – 26 October 2017

Sandton Convention Centre, Johannesburg

BENEFITS OF ATTENDING • Forge new business partnerships on the African continent.

• Understand city masterplans and transit orientated development projects and align your company’s strategy.

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Register before 31 August and save R2,750 on your delegate pass Please contact Stephan Herman on T: +27 21 700 3598 or E: stephan.herman@spintelligent.com