Extractives News Roundup | 10th April 2024

Summary of the most relevant news and insights in Africa's Mining, Oil and Gas Sectors

Uganda aims to stop exporting unprocessed minerals to boost its mining sector and create jobs. Permanent Secretary Irene Batebe emphasized the importance of value addition, noting initiatives such as a tin processing facility in Mbarara. New laws emphasize processing minerals within the country for added value. The government is setting higher purity standards for mineral exports, starting with tin. Uganda is also investing in exploration programs to accurately assess its mineral wealth.

In Kenya, a new mining police unit has commenced operations to tackle illegal mining activities. Led by Richard Ndirangui, the unit aims to collaborate with counties to enforce mining laws effectively. During a meeting with the Turkana County Directorate of Mineral Resources, strategies were discussed to prevent illegal practices in the mining sector. Triza Amoni, Chief Officer for Energy and Petroleum, emphasized the significance of upholding mining laws to safeguard the sector's future.

Rio Tinto plans to divest its stake in a Cameroon aluminum smelter, parting ways with the government due to a shift in strategy away from aluminum. The move marks the end of decades-long partnership, with Rio seeking a new investor for the 100,000 tonne-a-year facility known as Alucam Group. Despite the sale, Rio Tinto's contracts for technical and administrative assistance will remain unaffected. The smelter, located in Edea and employing 570 people, is a joint venture with the Cameroonian government, with both entities holding 46.67 percent stakes, alongside the French Development Agency and employee ownership.

TotalEnergies and SONATRACH have signed an MoU to develop gas resources in Algeria's Timimoun region, aligning with hydrocarbon activities law. This collaboration aims to optimize production from the Timimoun field, reducing costs and emissions. Earlier, the two companies extended their LNG cooperation until 2025, with SONATRACH supplying two million tonnes of LNG to TotalEnergies in France. TotalEnergies has a longstanding presence in Algeria's energy sector, participating in oil and gas exploration and production and engaging in LNG and downstream activities.

The Ghana Mineworkers' Union plans to stage a five-day protest starting April 15, 2024, demanding the revocation of Future Global Resources Limited's mining lease for the Bogoso-Prestea Mines. They argue that the company lacks adequate financial capability to run the mine effectively. The protest will begin at the Ministry of Lands and Natural Resources before moving to the Jubilee House. The union urged the government to act in compliance with recommendations from the Minerals Commission and the Attorney General’s Department. They also expressed confidence in the current workforce's ability to operate the mine pending potential investor involvement.

Zambia's finance minister is optimistic about increasing copper output to over a million tonnes per year by 2026, driven by investments in mine expansion. This boost follows the resolution of ownership disputes and investments in key mining projects, including those by Mopani Copper Mines, Konkola Copper Mines (KCM), First Quantum, Barrick Gold, and International Resources Holding.

Mali's industrial gold production is forecasted to decrease by approximately 14% this year, dropping to 53.7 metric tons, according to data from the mines ministry. The country hosts industrial mines operated by international companies like Barrick Gold, B2Gold Corp, Resolute Mining, and Hummingbird Resources. Barrick Gold leads in production, followed by B2Gold and Resolute Mining. Reasons for the lower forecast were not provided. Mali recently signed an agreement with Russia to build a 200-ton-per-year gold refinery in Bamako and adopted a new mining code to increase government ownership of mining projects.

Botswana Diamonds plans to use AI on its large diamond exploration database to identify potential drill targets and uncover new mineral deposits. This move comes as the company aims to capitalize on advancements in technology to enhance its exploration efforts. Last year, it made significant progress, including identifying a high-grade anomaly through a gravity survey. Botswana Diamonds remains active in South Africa, Eswatini, and Zimbabwe, where it continues to explore opportunities in the diamond sector.

Zimbabwe’s Young Miners Federation (YMF) is calling for a review of the newly introduced special capital gains tax on mining title transfers, citing concerns over its affordability for small-scale miners. YMF CEO Mr. Payne Kupfuwa emphasizes the importance of taxes for government revenue but suggests that the tax should not be overly burdensome for small businesses. YMF proposes exemptions or reduced tax rates for small-scale miners to support industry growth. The introduction of the tax has sparked debate within Zimbabwe's mining sector, with some expressing concerns about its potential impact on investment. Nonetheless, Zimbabwe's mineral wealth remains a crucial pillar of its economy.

Prime Minister Mohamed Ould Bilal chaired a ministerial committee meeting in Mauritania to review progress on implementing an action plan for civil mining. The focus was on reducing environmental risks and ensuring citizen and livestock safety. Ould Bilal urged sectors to speed up implementation and address emerging challenges in the sector.

Cameroon inaugurated Central Africa's first enclosed gold ore processing unit in Kana, Eastern region, led by Codias, Yucam, and Xin Wang companies. With a daily capacity of 500 tons, it aims for over 90% metal recovery, reducing environmental impact. The government plans 10 such units nationwide, urging operators to transition to enclosed systems within six months to mitigate environmental risks.

The Kenyan government is finalizing a Sh 5.8 billion deal to establish the country's first modern gold refinery in Kakamega County. The refinery aims to provide a reliable market for artisanal and small-scale gold miners from various counties, promoting economic development and job creation. It has secured land and environmental approvals, with negotiations ongoing regarding the state's stake. The project aligns with efforts to enhance value addition in the mining sector and address challenges faced by artisanal miners.

The national task team, including the South Africa Army Light Modern Brigade, has seized mining equipment, diamonds, explosives, weapons, and drugs worth over R8 million in a two-month operation against illegal mining. The joint task force, operating under Operation Prosper, involved the SANDF, SAPS, and other government entities. The seized items include firearms, drugs, vehicles, mining equipment, and cash. A total of 217 arrests were made for illegal mining, contraventions of the Precious Metal Act, possession of firearms, drug dealing, and other offenses. President Cyril Ramaphosa authorized the deployment of SA Army personnel under Operation Prosper at a cost of R500 million. The task force aims to conclude its operations by the end of April.

The Nigeria Security and Civil Defence Corps (NSCDC) Mining Marshal apprehended five individuals in Abuja with lithium, a solid mineral, loaded in two trucks. Acting on the Commandant General’s directive, the NSCDC has intensified efforts to protect critical national assets and infrastructure, including mining sites. Illegal mining poses a significant threat to the nation’s economy and security, prompting the arrest of the suspects for conspiring to sabotage the economy through illegal mining activities. The arrested individuals admitted to illegally possessing and transporting lithium without proper certification or documents. The investigation is ongoing, and the suspects will face legal proceedings to deter others from engaging in similar activities.

Namibia's diamond sector faces challenges due to a slowdown in demand from key markets and potential restrictions imposed by G7 countries, according to Minister of Mines and Energy Tom Alweendo. Despite this, there are positive developments in the mining sector, including increased investment and preparations for construction by various license holders. The government is prioritizing in-country value addition for critical minerals and actively engaging with international forums to discuss global supply chains. Alweendo highlighted the mining sector's significant contribution to the national treasury.

Environmental and human rights activists are urging the Nigerian government to reject Shell's plans to sell off its operations in the Niger Delta unless the company addresses the pollution caused by its activities. Shell's intended sale of its Nigerian subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC), to a local consortium has raised concerns about environmental cleanup and compensation for affected communities. Activists argue that Shell must do more to remediate the environmental damage before exiting the region. The Nigerian government, however, has signaled its intention to approve the divestment plans, emphasizing its commitment to fostering a business-friendly environment in the energy sector.

The appointment of Minister Antoinette N’samba Kalambayi as Mines Inspector has sparked controversy in the DRC, raising concerns about transparency and integrity in governance. The move highlights governance challenges and emphasizes the need for reforms to promote accountability and rebuild public trust.

INSIGHTS

Illegal mining and rock blasting endanger lives, property and the environment in Nigeria. Urgent action is needed from the government to criminalize these activities and implement robust policies to address them. Stakeholders emphasize the importance of responsible mining practices and providing alternative livelihood opportunities for affected communities. Efforts include advocating for safer explosives in mining and construction, but challenges remain, such as illegal dynamite importation. Government intervention, collaboration among agencies, and public awareness campaigns are crucial to combat illegal mining effectively and ensure the safe use of explosives in mining operations.Text here

INSIGHTS

The United States Institute of Peace (USIP) emphasizes the need for the U.S. to enhance its strategy on critical minerals in Africa to counter export controls and market manipulation by competitors. With heavy reliance on imports for minerals like cobalt and graphite, the report suggests boosting diplomatic and commercial presence in African mining hubs. Recommendations include strengthening commercial diplomacy, partnering with countries like the Democratic Republic of Congo and Zambia for electric vehicle battery supply chains, and increasing diplomatic presence in mining centers such as Lubumbashi. Additionally, leveraging existing aid programs and expanding the Minerals Security Partnership to include African partners are proposed to foster responsible mineral supply chains globally.Text here

INSIGHTS

Ukraine's drone attacks on Russian refineries may impact Libya's illicit oil trade, which sees fuel smuggled from Russia through Turkey. Much of this oil is then allegedly smuggled out of Libya and re-exported, generating substantial profits. However, recent disruptions to Russian refinery capacity due to the attacks may force smugglers to seek alternative fuel supplies. This situation exacerbates tensions within Libya, with accusations of government complicity in fuel smuggling and calls for subsidy reforms to address fuel shortages and stabilize the economy.

INSIGHTS

Resource-poor African countries are expected to surpass resource-rich ones in economic growth and development, driven by factors like diversification, human capital investment, governance, and regional integration. The World Bank forecasts a widening gap between these two groups, with non-resource-rich countries projected to achieve higher growth rates due to increased private consumption and investment. This trend challenges the notion that natural resources are essential for prosperity in Africa.

RESEARCH

Kofi Yeboah Asare, Katharina Salomea Hemmler, Andreas Buerkert, John Victor Mensah 


The paper investigates terrestrial sand mining around Accra, Ghana, an essential resource for urban infrastructure. Despite significant mining activity, governance has been overlooked. Qualitative data from key informants and focus groups reveal widespread illegal mining due to bureaucratic procedures, limited collaboration among regulators, and bribery. This leads to environmental degradation, impacting local livelihoods negatively. The study emphasizes the need for regulatory reform and collaboration to enforce existing laws and ensure sustainable sand mining practices.Text Here