Search Results for "Africa"

South African Iron Ore Major Kumba Cuts 1,772 Jobs

Mining Weekly reported that Kumba Iron Ore (JSE:KIO) has cut 1,772 jobs following the closure of its Thabazimbi mine, in Limpopo in an attempt to survive the low iron ore price.

As quoted in the market news:

Out of a previous complement of 572, only 221 permanent and fixed-term employees remained at head office, with the 351 head office jobs cut by the Anglo American group company in the first quarter representing a 61% reduction and a saving of R200-million a year.

A 31% reduction of permanent and fixed-term employees is under consultation at Kumba’s Sishen and Kolomela iron-ore mines in the Northern Cape as part of a Section 189A legal process, which will cut permanent and fixed-term employees by 261 people, reducing the employee complement from 846 to 585.

Kumba’s closure of its Thabazimbi mine, in Limpopo, will cut permanent employees by 800 and fixed-term employees by 360, taking the total job cuts carried out so far by the JSE-listed company to 1 772.

In presenting 61% lower headline earnings for the six months to June 30, Kumba CEO Norman Mbazima said that more than 200 individual cost-cutting measures undertaken in the six months to June 30 had reduced controllable costs by R1.8-billion. The company was now targeting a decreased break-even cash iron-ore price of $45/t, a far cry from the $135/t averages of 2013.

Click here to read the full Mining Weekly report.

Rio Tinto Spots Development Opportunities in Africa

Mining Weekly reported that Rio Tinto plc (ASX:RIO,LSE:RIO,NYSE:RIO) sees development opportunities in the mining industry in Africa.

As quoted in the market news:

The government of Guinea had been working with Rio Tinto to develop the project, which would also include the development of the new 650 km Trans-Guinean multi-use railway line, which would link south-east Guinea with the coast along the Southern growth corridor. A new deep-water port in Moribaya would also be the first in the country to provide access to large cargo ships.

Rio Tinto Diamonds and Minerals CE Alan Davies stated:

We have the opportunity to create immense value together. There is no good reason why Africa should not make this the African century – and mining can play its part as a catalyst in that transformation.

Click here for the full Mining Weekly report

West African Minerals Reports Inferred Mineral Resource Estimate for Sanaga

West African Minerals Corporation (LSE:WAFM) announced its maiden Mineral Resource estimate for its Sanaga license in Cameroon totals 82.9 Mt at 32.1 percent iron at a 25 percent iron cut-off grade.

As quoted in the press release, some highlights include:

  • CIM (NI-43-101 compliant) Inferred Mineral Resource of 82.9 Mt @ 32.1% Fe at a 25% Fe cut-off grade to a depth of 150m below surface.
  • Included in the MRE is a higher grade oxidised cap and near-surface enriched mineralisation of 15.8 Mt @ 37.3% Fe at a 25% cut-off grade.
  • Mineralisation has been intersected along a strike length of approximately 3 km from the surface to a vertical depth of approximately 150m and remains open at depth.
  • Positive metallurgical testwork reported on 21 October 2014 supports the potential production of a premium grade (69% Fe) concentrate at a favourable mass recovery of approximately 40%.
  • A summary Environmental and Social Impact Assessment (ESIA) has been completed and submitted to the Government of Cameroon for review and approval.

Brad Mills, president of West African Minerals Corporation, commented:

WAFM is very pleased to announce today the discovery of a high quality iron ore resource in coastal Cameroon. Preliminary metallurgical test work has confirmed that we can produce a premium grade and quality concentrate. The geometry of the mineralisation, which outcrops at surface, lends itself to low cost, low stripping ratio open pit mining. The project’s close proximity to existing rail, power and port infrastructure suggests minimal capital expenditures will be required to develop export infrastructure.

Click here for the full West African Minerals Corporation (LSE:WAFM) press release.

African Minerals Gets $13 Million from Restricted Bank Account to Pay Salaries, Taxes

The Mining Weekly reported that African Minerals Ltd.’s (LSE:AMI) partners in the Tonkolili iron ore project, located in Sierra Leone, have agreed to release $12.96 million from the project’s restricted bank account in Hong Kong.

As quoted in the market news:

The cash had been used to pay December salaries and accumulated taxes due in Sierra Leone.

In December, African Minerals was forced to place Tonkolili on care and maintenance, pending a $102-million cash payment from SISG or securing additional short-term funding.

The company said in a statement to shareholders:

These discussions remain the company’s utmost priority and while the African Minerals board continues to make every effort to advance them, there can be no certainty of future releases of funds.

Click here for the full Mining Weekly report

African Minerals Looks to Blend Iron Ore and Beat a Stagnant Market

African Minerals Looks to Blend Iron Ore and Beat a Stagnant Market

African Minerals and Timis are looking to blend their iron ore to better compete in the European steel market.

As the slumping iron ore price continues to affect companies around the world, African Minerals (LSE:AMI) has announced plans to blend its iron ore with that of a newly acquired partner.

In a corporate update released on Monday, the company said it will look at blending iron ore from its Tonkolili mine in Sierra Leone with material from Timis’ Marampa project to produce higher-grade iron ore. The goal? To hopefully lure more European consumers.

Friends with benefits

Established and owned by Frank Timis, executive chairman of African Minerals, Timis acquired the Marampa mine from PricewaterhouseCoopers on Monday. The plan for Timis and African Minerals is to take the 65 percent iron product from Marampa and the 58 percent iron product from Tonkolili and combine them. At its current state, the low-grade iron ore from Tonkolili doesn’t sell well when it’s shipped to China.

The additional benefit of combining the two and finding European buyers is that freight costs to Rotterdam and other European centers are about $12 per tonne lower than shipping costs to China.

“It is expected that, subject to the agreement of commercial terms, AML and ARPS will benefit substantially from lower infrastructure costs by virtue of higher tonnage, as well as the opportunities that will become possible through blending our combined products, accessing new markets in Europe and reducing our combined freight costs as a result,” said Alan Watling, CEO of African Minerals, in a statement.

All about the gains

Taking a more in-depth look at the proposed arrangement, Reuters notes that ore from West Africa usually sells at a discount to the benchmark 62 percent iron ore price. Lower iron prices have not helped the sector either — the iron price has dropped roughly 40 percent from this time last year.

The upside to selling this mixed blend is that it would present a significantly higher price than what the companies currently receive for their product. According to Platts, the price for 58 percent iron is $67.50 per tonne, while the price for 62 percent iron price is about $80.

The European Union represents a lucrative market for iron ore as it accounts for about 10 percent of the world’s steel, putting it in second place behind China. Steel production as a whole is up about 3,000 net tonnes from this time last year.

The announcement provided a welcome boost for African Minerals’ share price. The company has shed some 90 percent of its share price this year, but Monday’s news saw it rise about 20 percent, placing it among the London Stock Exchange’s top gainers in the morning. The company’s share price closed the day roughly 4 percent higher.

Broader appeal

A Dundee Capital Markets report released on Monday afternoon states that African Minerals’ deal with Timis has three benefits, with possibly the most significant being that it “can almost be treated as having one foot in the door for expansion/combination down the road.”

As iron ore prices continue to hamper companies focused on the commodity — with Rio Tinto (NYSE:RIO) and BHP Billiton (NYSE:BHP) engaged in a production war as they seek to become the lowest-cost miner of the steelmaking agent — the opportunity to blend two products looks like an innovative move.


Securities Disclosure: I, Nick Wells, hold no direct or indirect investment in any of the companies mentioned.

African Minerals Looks to Europe with Iron Ore Deal

African Minerals is looking at blending its iron ore with products from another mine in Sierra Leone to produce higher grade iron ore to sell in Europe.

According to Reuters:

With that deal now completed, African Minerals said it had agreed with Timis Corp to explore the possibility of blending products from its Tonkolili mine with ore from Marampa. If successful, it would be able to sell to European steelmakers at a significant premium to the price at which it sells to China.

Because of its lower quality, West African ore typically sells at a discount to the benchmark 62 percent iron price.

Click here to read the full article.

Ebola Outbreak Hurting West Africa’s Iron Ore Companies

Symptoms of ebola

Despite efforts to contain the current outbreak of Ebola, which began in Guinea last year and has since spread not only to various other West African countries, but also to Spain and the United States, the disease remains a problem. 

In its latest report on the situation, released on October 10, the World Health Organization states that since October 8 there have been 8,399 “confirmed, probable, and suspected cases” of Ebola and 4,033 deaths. The cases have been reported in seven countries, with Guinea, Liberia and Sierra Leone described as having “widespread and intense transmission” and Nigeria, Senegal, Spain and the US said to have experienced “an initial case or cases, or with localized transmission.”

While of course the disease’s most serious impact is the fact that it’s taken so many lives, it’s unfortunately had a number of other negative consequences. For investors, the key thing to note is that Ebola has created significant issues for mining companies operating in and around the affected areas — for instance, copper and cobalt producers have faced difficulties, while more recently diamond miners have encountered problems.

Currently, however, the sector whose hardships are in the spotlight is iron ore. The metal’s price has been on a downward spiral this year due to increased sales from companies like BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT) and Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), and the Ebola outbreak has further hurt smaller companies by prompting investor anxiety about their stability.

For instance, Bloomberg reported on Monday that African Minerals (LSE:AMI) and London Mining (LSE:LOND), both of which operate in Sierra Leone, are down 92 and 96 percent this year, respectively. While the former continues to operate, the latter was “suspended from trading on Oct. 10 after it said the only investors it was still engaged in talks with were those not seeking to keep the company operating.”

Meanwhile, the news outlet states, Sable Mining Africa (LSE:SBLM), which is developing an iron ore mine in Guinea, is down 85 percent so far this year, while Bellzone Mining (LSE:BZM), which is also focused on Guinea, has had its shares suspended.

While those poor figures have resulted in buying opportunities for companies like Glencore (LSE:GLEN), which is rumored to be interested in taking over Rio Tinto, for the most part they do not seem to have brought similar benefits for investors. As The Wall Street Journal notes, while London Mining is certainly a takeover target for major miners, the company has stated that “[u]nder the structures currently proposed, the board believes that there will be little or no value remaining in the equity of the company and the other listed securities of the group.” Not good news for investors.

As a result, many market participants, particularly those involved in the iron ore space, are now wondering about the best way to handle investing in Africa, with some raising the question of whether it’s possible to create an “Ebola-proof” portfolio.

That would certainly be helpful, but as Louis James, chief metals & mining investment strategist at Casey Research, points out in a recent note, it’s easier said than done. ”Unfortunately,” he quips, “with the disease already present in the US and EU, the only sure [way to do so] is to sell everything and go 100% to cash.”

That’s an “extreme” measure, he admits, and also one that it’s too early to take, but it does help highlight the fact that now is not the time for investors to sit idly by. James recommends selling “all stock in companies that rely upon or have close connections to Liberia, Guinea, and Sierra Leone — if not the rest of the countries on the outbreak list, except for the US and Spain,” pointing out that “West Africa’s gold fields are a major source of global mine supply, and if the disease does spread farther across the continent, especially east and south, there could be serious supply issues with copper, uranium, and other metals.”

At the same time, James states, investors need to keep the situation in perspective and not be alarmed by fearmongering. “Think of it as an orderly retreat, made only when necessary in the face of a clear and present danger, such as Mali or Côte d’Ivoire looking like the next Ebola dominoes to fall,” he suggests, concluding that he is “not ready to sell everything in Africa yet.” Investors should certainly be taking a good look at what they believe.


Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Related reading: 

What Does the Ebola Outbreak Mean for Congo Copper Operations?

Epidemics and Mining: How Companies Are Dealing with Crisis

Tekmira Pharmaceuticals Surges as Ebola Reaches United States

West African Iron Ore Provides Updates

West African Iron Ore Corp. (TSXV:WAI) provided a technical, financial and corporate update. Highlights include: a delay on the anticipated NI43-101 technical report on the N’Dougou Project, a convertible debenture financing agreement with Sky Alliance Resources, and Philip O’Neal resigning from the Board of Directors.

As quoted in the press release:

Update on Technical Report

The Company anticipated releasing its NI43-101 technical report on the N’Dougou Project, including a Compliant Mineral Resource estimate, in Q4-2013; however, due to a confidentiality agreement with the metallurgical testing company, the Company is unable to finalize the report because of its inability to release the metallurgy section publicly for the time being. These delays are outside of the Company’s control and the Company will release the technical report when it is in a position to do so. The report is expected to provide a resource estimate for three commodities – Iron Ore, Alumina and Silica.

Update on Finances

On May 10, 2013, the Company signed a $2,000,000 unsecured convertible debenture financing agreement with SKY ALLIANCE RESOURCES, INC. (“SARI”). SARI has agreed to finance up to $2,000,000 by way of up to four drawdowns of $500,000. Each drawdown will be in the form of a convertible debenture with a term of 5 years and an 8% annual interest rate. During the term of the Debentures, SARI will have the option to convert all or any portion of the outstanding debentures into common shares of the Company at market price at the time of drawdown, subject to a minimum conversion price of $0.10 per share.

Changes to the Board of Directors

The Company also announces that Philip O’Neill has resigned for personal reasons as director of the Company on Saturday 26th April 2014. We are grateful for Philip’s assistance over the past year and wish him all the very best in his next venture. The Company does not anticipate replacing Mr. O’Neil in the immediate future.

West African Iron Ore Corp. CEO, Guy Duport, said:

We knew two years ago that having an iron ore property on the edge of the Atlantic Ocean (close to port, transportation and infrastructure) would not in itself be sufficient to fulfill our goal of creating a “World-Class Project”. Even while a confidentiality agreement has restricted the finalization of our NI43-101 technical report, we feel that we have accomplished much in these difficult markets. The road ahead is still long and raising capital in 2014 will be key to our success. We are very encouraged by the level of interest we have received from potential partners and we hope to announce shortly the completion of a partnership that will fund the long-term development of WAI and our Forécariah property. I would also like to take this opportunity to say thank you to our local team in Guinea and to the Guinean Government for its support of our project. As well, the Board of Directors and I would like to thank you, our shareholders, for your loyalty, patience and interest in our project during these challenging times.

Click here to read the West African Iron Ore Corp. (TSXV:WAI) press release
Click here to see the West African Iron Ore Corp. (TSXV:WAI) profile.

Oman-Australian JV to Develop Pelletizing Plant in South Africa

Times of Oman reports that an Oman-based investment company, Anvwar Asian Investments, and an Australian iron ore developer are jointly planning to develop an integrated iron ore mine along with a large pelletising plant in South Africa.

As quoted in the market news:

The $1.5 billion mining venture – Ferrum Iron Ore – has granted mining right over three farms covering 53 square kilometres. The project concept is based on mining, crushing and separating at the Moonlight mining area, to produce concentrate, which will be pumped by slurry pipeline to Thambazimbi, some 220km away. 

Read the full story on Times of Oman here

Chinese Company Invests Close to $1B in African Mine

China’s Tianjin Materials & Equipment Group Corp. paid $990 million to secure a 17 percent investment in a Sierra Leone iron ore mine, Bloomberg reported.

The investment caused the seller of the stake, African Minerals Ltd. (LSE:AMI) to jump the most in 4.5 years in London, said Bloomberg.

As quoted in the market news:

The company agreed to sell 17 percent of its Tonkolili mine to China’s Tianjin Materials & Equipment Group Corp. for $990 million, it said today in a statement. The deal boosts financing at the miner, which had shelved a $2.5 billion expansion after missing sales forecasts. For China, it increases access to a key steelmaking material to feed growth in construction and cars.

Click here for the full story on Bloomberg

Tanzania to Become Africa’s 4th Largest Iron Producer

Tanzania is set to become the fourth largest iron producer in Africa once production at the Liganga iron project starts within five years, reported DailyNews. The country would produce a million tonnes per year.

As quoted in the market news:

Tanzania-China Mineral Resources Limited (TCIMRL), a joint venture company formed by NDC and Sichuan Hongda Group (SHG), is implementing the mega project which will also involve production of titanium and vanadium. 

Click here for the full story on DailyNews.


West African Iron Ore Welcomes Jorge Cantonnet to its Board of Directors

West African Iron Ore Corp. (TSXV:WAI) announced the appointment of Mr. Jorge Cantonnet as Non-Executive Chairman and Director of the Company.

As quoted in the press release:

Mr. Jorge Cantonnet is a senior financial industry executive with over 30 years of experience in establishing and managing private equity, investment banking and direct investment businesses in global emerging markets, with value exceeding several billion dollars.

Click here to read the West African Iron Ore Corp. (TSXV:WAI) press release
Click here to see the West African Iron Ore Corp. (TSXV:WAI) profile.

West African Iron Ore Corp. Completes Debt Settlement

 West African Iron Ore Corp. (TSXV:WAI) issued a total of 2,415,000 common shares to non-executive directors pursuant to the previously announced settlement of $241,500 in accrued directors’ fees.

As quoted in the press release:

….the Company has issued a total of 2,415,000 common shares to non-executive directors pursuant to the previously announced settlement of $241,500 in accrued directors’ fees. The shares issued are subject to a hold period expiring October 6, 2013.

Click here to read the West African Iron Ore Corp. (TSXV:WAI) press release
Click here to see the West African Iron Ore Corp. (TSXV:WAI) profile

Sundance Weighing Options on African Project

Sundance Resources (ASX:SDL) said on Monday it is considering its options for the Mbalam-Nabeba iron-ore project, following the collapse of takeover discussions with Hanlong Mining, Mining Weekly reported.

As quoted in the market news:

In a letter to shareholders, chairperson George Jones noted that the company had received expressions of interest from a range of countries, expressing a range of views about how possible transactions could be structured, including rail and port solutions, and direct investments in the project.

Click here for the full Mining Weekly news report

West African Iron Ore Arranges $2 Million Financing Agreement

 West African Iron Ore Corp. (TSXV:WAI) arranged a $2 million unsecured convertible debenture financing agreement with Sky Alliance Resources Inc. (SARI), a privately owned, international mining and consulting firm based in Hong Kong and registered in the British Virgin Islands.

As quoted in the press release:

SARI has agreed to finance up to CAD$2.0 million by way of up to four drawdowns of CAD$500,000. Each drawdown will be in the form of a convertible debenture (collectively the “Debentures”) with a term of 5 years and an 8% annual interest rate. During the term of the Debentures, SARI will have the option to convert all or any portion of the outstanding Debentures into common shares of the Company at a conversion price of CAD$0.10 per share for the first CAD$500,000 drawdown. All other drawdowns will have the option to convert any portion of the outstanding Debentures at the market price at the time of drawdown, subject to a minimum conversion price of CAD$0.10 per share. Subject to TSX-V approval, the remaining CAD$1.5 can be drawn down at WAI’s election after completion of a resource report in a form prescribed by National Instrument 43-101 with respect to the Forécariah tenement.

Click here to read the West African Iron Ore Corp. (TSXV:WAI) press release
Click here to see the West African Iron Ore Corp. (TSXV:WAI) profile

S. African Billionaire Motsepe Eyes Iron Ore Industry in Guinea

Mining Weekly reported that African Rainbow Minerals’ executive chairperson and South African mining magnate, Patrice Motsepe wants to invest in Guinea’s iron ore.

As quoted in the news article:

An investment by Motsepe would give a boost to Guinea’s mining industry after moves by Conde to revise the country’s mining code coupled with a violent political stand-off over legislative elections have dampened investor sentiment.

Click here to read the full Mining Weekly report.

Hanlong Seeks Partner for $4.7-billion African Iron Project

Reuters reported that Hanlong Group, a privately owned Chinese company, is in talks with four of China’s state-owned steel mills with the aim of choosing one of them to be its partner for Sundance Resources Ltd.’s (ASX:SDL) Africa-based, $4.7-billion Mbalam iron ore project.

As quoted in the market news:

Hanlong has been ordered to team up with a large Chinese company for the Mbalam project in order to secure final approval from China’s top planner, the National Development and Reform Commission (NDRC), for the A$1.38-billion Sundance takeover.

The takeover has been held up for a year due to delays in securing approvals from the Chinese government, which is keen to ensure that Mbalam is properly funded to help break the grip of mega miners Vale, Rio Tinto and BHP Billiton on iron ore supplies.

Click here to read the full Reuters report.

Anglo American Says Iron Output Falls After Strikes in South Africa

Bloomberg reported that Anglo American Plc said iron ore production in its Kumba Iron Ore unit went down in the fourth quarter due to strikes.

As quoted in the market news:

Output at Anglo’s Kumba Iron Ore unit fell 19 percent to 9 million metric tons, mainly because of a walkout at the Sishen mine, the company said today in a statement.

Click here to read the full Bloomberg report.

South Africa Overtakes India as China’s Number 3 Iron Ore Supplier

Mining Weekly reported that South Africa is now the number 3 iron ore supplier for China, providing roughly 40.6 million tons in 2012, which was 12% higher compared to 2011.

As quoted in the market news:

Supplies from India amounted to 10.6% of China’s total imports in 2011, but were already disrupted by a mining ban in Karnataka, India’s biggest iron-ore producing state.

India’s share of total imports into China has been in steady decline for several years, falling from 23% in 2006 to just 4.4% last year.

Click here to read the full Mining Weekly report.

West African Iron Ore Renews Forécariah Licenses and Provides Financing Update

West African Iron Ore (TSXV:WAI) announced that the Minister of Mines and Geology of the Republic of Guinea granted its first renewal for its Forécariah permits, under Decree number: A 2012/10253/MMG/SGG, valid for a period of 24 months. The Company also reported that financing is moving forward because of the Forecariah licenses renewal.

As quoted in the press release:

… The three renewed exploration licenses held by WAI’s wholly owned subsidiary Sky Alliance Ressources Guinée S.A. (“SARG”), cover an area of 1,050 km² in the province of Forécariah. SARG has a management office in Conakry, the capital city of the Republic of Guinea, maintains and manages ground operations on the property from exploration bases in the city of Forécariah and a base camp near the village of Bokaria.
… Any debentures issued pursuant to the LOI will now be converted into common shares of the Company at the greater of the market price of the Company’s shares at the time of issuance of the Debentures or the conversion price of CAD$0.10 per share. CIF’s aggregate beneficial ownership of common shares of the Company may not exceed 19.9% of the issued and outstanding common shares of the Company at the time of exercise.

Click here to read the West African Iron Ore (TSXV:WAI) press release
Click here to see the West African Iron Ore (TSXV:WAI) profile.