Business Developments - 22 May 2023

Hello everyone!

We start this week’s newsletter by looking at Guinea due to its ongoing gold exploration programs.

Australia-based Golden Rim Resources has announced positive results from its ongoing exploration program and has provided assay results for the final 44 AC drill holes from exploration drilling to identify new targets at the Kada Gold project. Discovering gold at the Sadan prospect confirmed the company’s view that Kada still had significant gold ounces to uncover. Gold Rim feels it has only scratched the surface at Kada, with 930,000 oz at Massan across a 1 km strike, and another attractive target in Bereko, 9km to the north. The company now focused on filling in the gaps across Kada’s 15 km long bedrock gold corridor and expressed confidence this would uncover further zones of mineralization and underpin resource growth.

Mining remains a hot sector on the continent, especially as the price of gold rises. Here are some recent developments:

In Zimbabwe, President Emmerson Mnangagwa has approved nationwide audits on mining activities. The decision is part of the government’s efforts to ensure transparency and compliance in the mining sector, a key pillar of the country’s economy. The audits will cover all mining activities, with a particular focus on operations that have an impact on the environment and local communities.

Kuvimba Mining House, one of Zimbabwe’s leading mining companies, is set to inject US$ 1 million into the Zimbabwe Iron and Steel Company (ZISCO Steel). The funds are expected to help ZISCO Steel ramp up its operations and contribute to revitalizing the country’s steel industry. The initiative is part of Kuvimba Mining House’s broader commitment to supporting key sectors and contributing to economic development in Zimbabwe.

Minister of Mines and Energy Tom Alweendo has revoked the mining license of China-based Xinfeng Investments in Namibia. The decision is part of an ongoing effort to regulate the country’s mining sector and ensure compliance with national mining laws. In a letter dated 28 April addressed to Xinfeng, Alweendo explained the decision was made after Xinfeng was found to have deliberately included misleading, untrue, and incorrect information during the application process. This is despite having been allowed to explain the misleading information. Xinfeng’s explanations failed to prove the information was truthful, correct, and not misleading.

According to the Fraser Institute’s latest annual survey, Namibia has significantly improved its mining investment attractiveness. The survey ranks jurisdictions based on their geologic attractiveness and the extent to which government policies encourage exploration and investment. Namibia’s improved ranking reflects its successful efforts to create a favorable environment for mining investment through stable and supportive policies.

In Niger, Canada-based Global Atomic Corporation has secured a long-term agreement to supply uranium concentrates from its Dasa Project in Niger to a significant North American-based nuclear utility. The supply agreement, which extends from 2024 to 2030, positions Global Atomic as a major supplier of uranium to the North American market and ensures a steady demand for the output from the Dasa Project.

In Liberia, Hamak Gold has identified high-priority targets at its Nimba Gold Project after completing a detailed airborne geophysical survey. The survey provided new insights into the area’s geological structure and mineral potential, allowing the company to refine its exploration strategy. The company is planning follow-up ground-based exploration to validate the identified targets.

The management of the rail link between Liberian mining sites and the port of Buchanan is still the subject of intense negotiations. The U.S. State Department brought together Washington executives from ArcelorMittal and the American company High Power Exploration to solve this logistical and commercial disagreement.

In Côte d’Ivoire, Australia-based Turaco Gold has successfully raised US$ 3.75 million through a share placement. The funds will accelerate exploration of the company’s gold projects in Côte d’Ivoire. The successful fundraising highlights investor confidence in Turaco’s projects and the potential of Côte d’Ivoire as a gold-producing region.

In the Democratic Republic of Congo (DRC), President Felix Tshisekedi is expected to travel to Beijing soon for a visit likely to include both gratitude and grievance, given China’s deep engagement in the central African country’s mining of critical minerals. Tshisekedi’s trip has not yet been made official, and his foreign policy adviser said a state visit was still being discussed with the DRC’s Chinese counterparts. Tshisekedi has called for an overhaul of a US $6.2 billion “minerals for infrastructure” deal signed in 2008, demanding a more significant share than that agreed upon by his predecessor, Joseph Kabila. China has been the Democratic Republic of the Congo’s leading mining partner for more than 15 years, but some of the terms of its 2008 deal with China are not sitting well with its leaders a decade and a half later.

In South Africa, Rainbow Rare Earths, a London-listed company, has raised nearly US$ 8 million through a share placement. The funds will be used to further the development of the Phalaborwa Rare Earths Project’s pilot plant. The project aims to capitalize on the growing demand for rare earth elements, critical components in various high-tech industries.

AngloGold Ashanti, a multinational gold mining company headquartered in South Africa, has decided to delist from the Australian Securities Exchange (ASX). The decision is part of a broader strategy to simplify the company’s portfolio and focus on core assets. The company also believes that the administrative and compliance obligations and costs associated with maintaining the ASX listing are no longer in the best interests of its shareholders. The delisting will not affect the company’s listings on the Johannesburg Stock Exchange and the New York Stock Exchange.

South African data has shown that mining production and sales slowed by 2.6 percent in March 2023 compared to March 2022, reports SABC News. The largest contribution to the decline in the annual figure came from diamonds and the platinum group of metals. However, monthly mining production exceeded expectations, increasing 6.5 percent in March compared to February. Gold, platinum group of metals, iron ore, and manganese contributed to the increase. Economist at Efficient Group, Dawie Roodt, says load shedding and the logistical constraints in the country will pose a challenge for mining production in the latter part of the year.

Canada-based Fortuna Silver Mines intended to acquire Australia-based gold company Chesser Resources for just over US$ 60 million. The acquisition will allow Fortuna to expand its footprint in West Africa.

An analysis in The Africa Report discusses the future of mining in Africa, focusing on Ghana, Nigeria, and Zimbabwe. It highlights the crucial role of the “minerals of tomorrow,” such as lithium, cobalt, and copper, which are vital for renewable energy technologies. African countries, the article suggests, need to strategically manage these resources to avoid repeating past mistakes with traditional minerals like gold and diamonds.

Turning to Energy, the solar power plant at Mubuga in Burundi is set to double its capacity. With a capacity of 7.5 MW, the government of Burundi, in partnership with the Dutch project developer Gigawatt Global, plans to expand the total to 15 MW. This expansion aligns with Burundi’s National Development Plan 2018-2027, which seeks to increase access to electricity from 7 percent to 30 percent.

In Mozambique, energy majors are inching closer to resuming their LNG projects after a security hiatus. A positive turning point is in sight, with TotalEnergies and ExxonMobil seeking to recommence operations as security conditions improve in the Cabo Delgado region. The government and security forces are working on a phased return of the operators.

South Africa is considering delaying the decommissioning of its coal power plants. The Department of Mineral Resources and Energy is reportedly looking at options to extend the life of these plants beyond their planned decommissioning dates, citing the need to ensure energy security. The decision is controversial, given the environmental impacts of coal power and the country’s commitments to reducing greenhouse gas emissions.

Tanzania has estimated the cost of its LNG project at US$ 42 billion. The project, aimed at transforming Tanzania into a significant LNG exporter, has been delayed due to protracted negotiations between the government and international oil companies. The project’s completion is expected to boost the country’s economy.

France-based BNP Paribas stated it would no longer finance new gas field projects, further restricting some of its funding for fossil fuels, as campaigners pursue lawsuits against the euro zone’s biggest bank for supporting the sector. The French banking group joined other leading fossil fuel lenders, such as HSBC, in extending a previous commitment to new oil projects to include some gas activities. But climate activists noted that most of the bank’s support for oil and gas is given through corporate loans and bond underwriting services, not the direct loans BNP has addressed in its new policy.