Coal Mining In Africa

The mineral industry of Africa is the second-largest mineral industry in the world. Africa is the second largest continent, with 30.37 million square kilometre of land, which implies large quantities of resources. With a population of 1.4 billion living there. For many African countries, mineral exploration and production constitute significant parts of their economies and remain keys to economic growth. Africa is richly endowed with mineral reserves and ranks first in quantity of world reserves of bauxite, cobalt, industrial diamond, phosphate rock, platinum-group metals (PGM), vermiculite, and zirconium.

The Central African Mining and Exploration Company (CAMEC), one of Africa's primary mining enterprises, is criticized for its unregulated environmental impact and minimal social stewardship. In the spring of 2009, retired British cricket player Phil Edmonds' assets were seized by the United Kingdom's government due to CAMEC's illicit association with former self-appointed Zimbabwean President Robert Mugabe CAMEC recently sold 95.4% of its shares to the Eurasian Natural Resources Corporation. It is under restructuring and is no longer trading under the CAMEC brand.

African mineral reserves rank first or second for bauxite, cobalt, diamonds, phosphate rocks, platinum-group metals (PGM), vermiculite and zirconium.MIA, p1.1 Many other minerals are present in quantity. The 2012 share of world production from African soil was bauxite 7%; aluminium 5%; chromite 38%; cobalt 60%; copper 9%; gold 20%; iron ore 2%; steel 1%; lead (Pb) 2%; manganese 38%; zinc 1%; cement 4%; natural diamond 56%; graphite 2%; phosphate rock 21%; coal 4%; mineral fuels (including coal) - 13% and petroleum 8%; uranium 18%;MIA, p1.7 and platinum 69.4%.

Key producers

As of 2005, strategic minerals and key producers were:

Estimates for production of major mineral commodities for 2005 and beyond have been based upon supply-side assumptions, such as announced plans for increased production, new capacity construction and bankable feasibility studies. The outlook sections were based on projected trends that could affect year 2005 producing facilities and on planned new facilities that operating companies, consortia, or governments have projected to come online within indicated timeframes. Forward-looking information, which includes estimates of future production, exploration and mine development, cost of capital projects, and timing of the start of operations, are subject to a variety of risks and uncertainties that could cause actual events or results to differ significantly from expected outcomes.
MIA: 2005 Minerals Yearbook.

Economics

Organizations promoting exports

The mineral industry is a significantly important source of export earnings for many African nations. To promote exports, groups of African countries have formed numerous trade blocs, which included the Common Market for Eastern and Southern Africa, the Economic and Monetary Community of Central Africa, the Economic Community of Central African States, the Economic Community of West African States, the Mano River Union, the Southern African Development Community, and the West African Economic and Monetary Union. Algeria, Libya, and Nigeria were members of the Organization of the Petroleum Exporting Countries (OPEC). The African Union was formally launched as a successor to the Organization of African Unity in 2002 to accelerate socioeconomic integration and promote peace, security, and stability on the continent.

Dependence of African countries

Many African countries are highly and dangerously dependent on mineral exports. Mineral fuels (coal, petroleum) account for more than 90% of the export earnings for Algeria, Equatorial Guinea, Libya, and Nigeria. Minerals account for 80% for Botswana (led by, in order of value, diamond, copper, nickel, soda ash, and gold), Congo (Brazzaville) (petroleum), Congo (Kinshasa) (diamond, petroleum, cobalt, and copper), Gabon (petroleum and manganese), Guinea (bauxite, alumina, gold, and diamond), Sierra Leone (diamond), and Sudan (petroleum and gold). Minerals and mineral fuels accounted for more than 50% of the export earnings of Mali (gold), Mauritania (iron ore), Mozambique (aluminium), Namibia (diamond, uranium, gold, and zinc), and Zambia (copper and cobalt).

The mineral industry's exports make up an important part of the African gross income. Ongoing mining projects of more than US$1 billion are taking place in South Africa (PGM 69%; gold:31%), Guinea (bauxite and aluminium), Madagascar (nickel), Mozambique (coal), Congo (Kinshasa) and Zambia (cobalt and copper), Nigeria and Sudan (crude petroleum), Senegal (iron), and many others.

Investment

The Department of Mineral Resources of South Africa reported that investment in newly committed precious metals projects in South Africa—those for which funds had already been committed or were being expended—was $8.26 billion in 2005. An additional $9.56 billion was reported for potential precious metals projects in South Africa (that is, feasibility-level projects for which funds had not yet been committed). PGM accounted for 69% of the investment and gold 31%. Potential investments in iron ore projects was at least $950 million. Investment in newly committed processed minerals projects amounted to $681 million, and potential processed minerals projects is $584 million.

By 2008, capital expenditure for the heavy mineral sands project at Mandena in Madagascar was expected to total $585 million; at Moma in Mozambique, $348 million; and at Kwale in Kenya, $178 million. By 2010, capital expenditures for bauxite and alumina in Guinea were likely to total more than $2.35 billion; nickel in Madagascar, $2.25 billion; and coal in Mozambique, $1 billion. Substantial capital expenditures were also likely for aluminum in Mozambique and South Africa, cobalt and copper in the Democratic Republic of the Congo (Congo-Kinshasa) and Zambia, crude petroleum in Nigeria and Sudan, iron ore in Senegal, and natural gas in Nigeria. However, commercial investment in mining in Africa has been shown to increase the likelihood of protests in the surrounding area.

Exploration

Exploration activity, as defined by African exploration budgets reported by the MEG, increased to $807 million in 2005 from $572 million in 2004. Africa's share of the world exploration budget increased slightly to 16.5% in 2005 from 16.1% in 2004. In 2005, the principal mineral targets in Africa were copper, diamond, gold, and platinum group metals (PGM).

African countries that experienced the highest levels of exploration activity in 2005 were, in descending order based on the number of exploration sites as compiled by the USGS, South Africa, Burkina Faso, Ghana, and Zambia, but activity took place in a number of other countries. Gold accounted for approximately 51% of reported African exploration projects, diamond accounted for about 14%, copper and PGM each accounted for about 11%, and nickel accounted for 5%. Early stage projects accounted for about 77% of the 2005 activity, and feasibility stage projects accounted for about 12%.

Australian and Canadian junior companies continued to invest time and money to explore Africa. South African companies continued to expend a sizable amount of their exploration resources outside of South Africa.

Trade

Africa's current account surplus amounted to 2.3% of its GDP in 2005 versus 0.1% of GDP in 2004. In 2005, sub-Saharan countries ran an average deficit of 0.6% of the GDP, and countries in the Arab Maghreb Union ran an average surplus of 12.2% of GDP. Trade surpluses in oil-exporting countries more than offset trade deficits in oil-importing countries.

Oil-importing countries had an average current account deficit of 3.3% of the GDP in 2005, and oil-exporting countries had an average current account surplus of 12.2% of GDP. Out of 33 African nations for which information was available, 20 countries experienced a decline in their terms of trade between 2002 and 2005 and 13 experienced an improvement. Oil importers experienced the worst decline. However, Botswana's terms of trade improved because higher prices for oil imports were more than offset by higher prices for diamond exports. Similar reasoning held for Mozambique because of higher prices for aluminum; in Niger, for uranium; and in Zambia, for copper.

The average current account deficit for oil-importing countries is expected to increase to 4.1% of the GDP in 2006 and to 3.8% of the GDP in 2007. For oil-exporting countries, the surplus is predicted to rise to 15.4% of the GDP in 2006 and 15.8% of the GDP in 2007. Africa was expected to run a current account surplus of 3.6% of the GDP in 2006 and 4.2% of the GDP in 2007.

In 2004 or 2005, mineral fuels accounted for more than 90% of the export earnings of Algeria, Equatorial Guinea, Libya, and Nigeria. Minerals and mineral fuels accounted for more than 80% of the export earnings of Botswana (led by, in order of value, diamond, copper, nickel, soda ash, and gold), Congo (Brazzaville) (petroleum), Congo (Kinshasa) (diamond, petroleum, cobalt, and copper), Gabon (petroleum and manganese), Guinea (bauxite, alumina, gold, and diamond), Sierra Leone (diamond), and Sudan (petroleum and gold). Minerals and mineral fuels accounted for more than 50% of the export earnings of Mali (gold), Mauritania (iron ore), Mozambique (aluminum), Namibia (diamond, uranium, gold, and zinc), and Zambia (copper and cobalt). Gold was a significant source of export earnings in Ghana, South Africa, and Tanzania. Diamond was a significant source of export earnings in the Central African Republic and South Africa, as was uranium in Niger.

Africa's natural gas exporters included Algeria, which had 72% of the continent's natural gas exports, Nigeria, 13%, Egypt, 9%, and Libya, 6%. Europe received 91% of African total natural gas exports and was the destination of 95% of Africa's natural gas exports by pipeline and 88% of Africa's liquefied natural gas (LNG) exports. The United States received 11% of Africa's LNG exports, and countries of the Asia and the Pacific region, 1%.

In 2005, Europe received 35% of Africa's petroleum exports; the United States, 32%; China, 10%; Japan, 2%; and other countries in the Asia and the Pacific region, 12%. West African countries sent 45% of their exports to the United States and 32% to China, Japan, and other countries in the Asia and the Pacific region. North African countries sent 64% of their exports to Europe and 18% to the United States. Intraregional exports to African countries amounted to only 2% of total African petroleum exports.

Intraregional minerals trade was however significant in the case of gold. South Africa imported 142,000 kilograms per year of gold, mostly from West African countries, to supply its gold refinery. A majority of African gold mine production was refined in South Africa before export to other regions.

Most of Africa's copper and platinum group metals PGM production was exported in refined form. The majority of Africa's chromite production was processed into ferrochromium before export. For other commodities, which included bauxite, colored gemstones, diamond, iron ore, petroleum, and uranium, most of or all the continent's production was exported before downstream processing.

Legislation

In September 2004, the Eritrean government ordered a halt to all mineral exploration activity in the country while it reviewed its Mining Act. The government suspension was lifted in January 2005. The government increased the maximum possible equity interest that it may hold in a project through an option agreement from 20% to 30%.

Effective February 28, 2005, platinum producers could no longer hold proceeds from Zimbabwean mining activity in foreign accounts to fund exploration and development in that country. The loss of direct access to these earnings may make it more difficult for foreign companies to fund exploration in Zimbabwe.

At the end of 2004, the government of Liberia passed legislation providing for controls on the export, import, and transit of rough diamond. In addition, the government suspended the issuance of all permits for diamond mining and placed a moratorium on alluvial diamond prospecting.

On December 15, 2005, the Parliament of Ghana passed a new Minerals and Mining Law (law number 703). The new law provides for access to mineral rights on a first-come, first-considered basis; a specific time frame within which all applications should be granted; the right for applicants to demand written reasons from the Minister if an application is rejected; the government's right to acquire land or authorize its occupation and use if the land is required for mining purposes; the establishment of a cadastral system for the administration of mineral rights; the establishment of the permissible range of royalty rates at not less than 3% or more than 6% of total mining revenues; the government's right to obtain a 10% free-carried interest in mining leases; and the establishment of the period of duration of a mining lease, which is not to exceed 30 years and which may be renewed once for a period not to exceed an additional 30 years.

In South Africa, the Government's Black Economic Empowerment program required that black ownership of the mining industry reach 15% by 2009 and 26% by 2014. Recent actions to increase black ownership included the acquisition of 20% of Gold Fields by black-owned Mvelaphanda Resources Ltd. by 2009; the transfer of mines held by AngloGold Ashanti to black-owned African Rainbow Minerals; and the acquisition of 30% of Sallies Ltd. by African Renaissance Investments (Pty) Ltd.

Environment

Deforestation for fuel use and land-intensive agricultural production continued to be a significant environmental issue in many African countries. Other causes of deforestation included artisanal production of gemstones, lime, and sand and gravel. The West African Gas Pipeline, which was expected to start regular operations in the end of 2008, could help mitigate the effects of deforestation in Benin, Ghana, and Togo and reduce emissions of greenhouse gases. In 2005 natural gas was being flared by Nigeria; in the future, Nigeria expected to export natural gas to Benin, Ghana, and Togo. The government of Nigeria had committed to ending the flaring of natural gas, which would lead to decreased pollution.

The use of mercury by artisanal gold miners has led to serious air and water pollution in Ghana, Kenya, Mozambique, South Africa, Sudan, Tanzania, and Zimbabwe. The Global Environment Facility, the United Nations Development Programme, and the United Nations Industrial Development Organization began the Global Mercury Project in August 2002 to alleviate these problems. The Global Mercury Project has been providing cleaner technologies and training for miners, conducting health assessments, and helping institute government regulatory capacities.

Metals

Aluminium, bauxite, and alumina

From 2000 to 2005, African production of refined aluminium increased by 54%. In Mozambique, the Mozal smelter was completed in 2000, and the Mozal 2 smelter, in 2003. South Africa's production increased because of the expansion of the Hillside smelter in December 2003. Output also increased in Cameroon and Egypt. In Ghana, the Valco smelter was shut down because of droughts that reduced the country's effective hydropower capacity. South Africa accounted for about 48% of African aluminium output; Mozambique, 32%; and Egypt, 14%. Kenya was the only African producer of secondary refined aluminium. Africa accounted for 5% of the world's aluminium production in 2005.

African bauxite production declined by about 3% from 2000 to 2005. From 1990 to 2005, Africa's share of world bauxite production decreased to 9% from 16%. Guinea accounted for about 95% of African bauxite production; Ghana accounted for most of the remainder. In 2005, Guinea was the only African producer of alumina.

In 2005, world aluminium consumption amounted to 31.6 million metric tons (t) compared with 29.9 t in 2004. African consumption of aluminium increased by 3.4% in 2005. In South Africa, aluminium consumption increased to 374,000 t in 2005 from 342,000 t in 2004.

The production of refined aluminium is expected to rise by an average of about 10% per year from 2005 to 2011. The Mozal 3 smelter in Mozambique and the Coega smelter in South Africa are expected to open in mid-2009 and late 2010, respectively. In Cameroon, Alcan Inc. plans to triple production from its smelter by 2010. Aluminium Smelter Co. of Nigeria Ltd. could reopen its smelter at Ikot Abasi by 2009 and reach full capacity by 2011. In Ghana, Alcoa Inc. plans to increase production at the Valco smelter starting in 2006.

African bauxite production was likely to increase by an average of about 10% per year from 2005 to 2011. In Guinea, planned increases in alumina refining capacity of about 5 million metric tons per year in 2008 and 2009 are expected to lead to higher bauxite production. The Sangarédi and the Kamsar refineries are likely to start production in late 2008 and 2009, respectively, and the expansion of the Friguia refinery could be completed in 2009. The reopening of the Sierra Mineral Holdings bauxite mine in 2006 and the restart of mining in the Kambia District in 2010 could increase Sierra Leone's bauxite production to 2.7 Mt in 2011.

Copper

Africa's mine production of copper increased by 48% from 2000 to 2005. Zambia was the leading producer in Africa; the country's increasing production was attributable to higher output from the Mufulira and the Nkana Mines and the reopening of the Chambishi Mine. The production increase in Congo (Kinshasa) was mostly attributable to the opening of the Lonshi Mine and the Dikulushi Mine in 2001 and 2002, respectively. South Africa's output declined because of lower production from the Palabora Mine and the closure of the Maranda Mine in 2004. In 2005, Zambia accounted for 65% of African copper mine production; South Africa, 15%; and Congo (Kinshasa), 13%. Africa's share of world copper mine production was 5% in 2005 compared with 14% in 1990.

Africa's refined copper production rose by 40% from 2000 to 2005; increased production from the Bwana Mkubwa and the Mufulira plants in Zambia more than offset lower South African output. In South Africa, production declined because of lower output from the Palabora refinery. In 2005, Zambia accounted for 77% of African refined copper production; South Africa, 19%; and Egypt, 3%. Congo (Kinshasa), which accounted for 37% of continental refined copper output in 1990, had ceased production by 2000. Egypt was the only producer of secondary refined copper; primary production accounted for most African production.

In 2005, world refined copper consumption increased to 16.8 Metric tonnes from 16.7 t in 2004; African consumption of copper amounted to about 170,000 t in 2005. South Africa's consumption declined to 82,000 t in 2005 from 84,000 t in 2004.

African copper mine production was expected to rise by an average of about 16% per year from 2005 to 2011. Congo (Kinshasa) could account for about one-half of the increase in output. Nikanor plc planned to open the Kananga and the Tilwezembe mines in 2006 and 2007, respectively, and to restart production at the Kamoto-Oliveira-Virgule (KOV) Mine in late 2009. Central African Mining and Exploration Company plc (CAMEC) was expected to open a new mine during the first quarter of 2008 and to reach full capacity in 2009. Tenke Mining planned to start the Tenke Fungurume project in late 2008. Anvil Mining Ltd. planned to increase production at Kulu in 2006 and to open the Mutoshi Mine in early 2007. Metorex Ltd. is likely to start the Ruashi Tailings project in mid-2006 and the Ruashi Mine in July 2008. Other new sources of production include the Kolwezi Tailings project in 2008 and the Etoile Mine in 2009. The Ruashi Tailings project and the Lonshi Mine were expected to be shut down in 2010.

Output was likely to rise sharply in Zambia because of higher production from the Kansanshi mine in 2006 and the opening of the Chingola and the Lumwana mine in 2007 and 2009, respectively. Expansions are planned for the Mufulira, the Mufulira South, and the Nkana Mines in 2007.

In Botswana, the Dukwe mine was expected to open in 2009 and to reach full capacity by 2011; production from the Phoenix Mine was likely to triple by 2011. Nevsun Resources Ltd. planned to start mining from a copper-rich zone at Bisha in Eritrea in 2010. In Mauritania, the Guelb Moghrein Mine started to produce refined copper in late 2006. South Africa's production could increase because of the expansion of the Limpopo PGM mine.

The production of refined copper was expected to rise by an average of 17% per year from 2005 to 2011. Zambia's production is expected to increase because of higher output from the Mufulira refinery and the Bwana Mkubwa and the Kansanshi solvent extraction-electrowinning (SX-EW) plants in 2006 and the Konkola SX-EW plants by 2007. In Congo (Kinshasa), new SX-EW plants could open at the Kolwezi Tailings project and the Mutoshi Mine in early 2008, and at the KOV Mine in late 2009. CAMEC planned to start production at the Luita plant in 2008. Congo (Kinshasa), which did not produce refined copper in 2000, could account for more than 25% of Africa's refined copper output by 2011.

Gold

Africa's gold mine production was 522,000 kilograms/1,148,400 pounds in 2005, which was a decrease of 14% compared with that of 2000. Production was considerably less than that of 1990 because of the long-term decline in South African production. From 1990 to 2005, Africa's share of world gold mine production decreased from 32% to about 21%.

In South Africa, the decrease in production since 2000 was broad based, with output declining at the Great Noligwa Mine, the , the Kloof mine, the Mponeng, the Savuka Mine, and the TauTona Mines. The Ergo mine, the North West, and the St. Helena Mines have been closed. The decline in Ghana's production was partially attributable to lower output at the Bibiani Mine. Output also decreased in Zimbabwe.

In Tanzania, production increased in recent years because of the opening of the Geita Mine in 2001; the North Mara Gold Mine in 2002; the Buhemba Mine in 2003; and the Tulawaka Mine in 2005. The Bulyanhulu Mine, the North Mara Gold Mine, and the Tulawaka Mine are all owned or operated by Barrick Gold. Output increased since 2000 in Mali because of the opening of the Loulo, the Morila, and the Yatela Mines. The Mupane and the Samira Hill Gold Mines were opened in Botswana and Niger, respectively; these countries had only artisanal gold production before 2004.

In 2005, South Africa accounted for 56% of African gold production; Ghana, 13%; Tanzania, 10%; and Mali, 8%. South Africa's share of continental gold production continued to decline from 89% in 1990 because of rising production costs associated with deeper underground operations and increased production in Ghana, Guinea, Mali, and Tanzania.

Gold mine production in Africa is expected to increase by 17% from 2005 to 2009. The long-term decline in South Africa's production could be reversed because of the expected completion of the Moab Khotsong mine in 2006, the Dominion Mine in 2007, the Tshepong Decline project in 2008, the Phakisa Shaft in 2009, and the planned expansion of the Masimong Mine in 2010. By 2011, these projects could more than offset the shutdown of the Ergo and the North West Mines in 2005, the planned closure of the Crown Mine in 2009, and lower production from the Great Noligwa, the Kopanang, and the Tau Lekoa Mines.

In Ghana, the outlook is for a substantial increase in output because of the expected opening of the Ahafo mine in the second half of 2006 and the Akyem Mine in 2008 and higher production from the Chirano Gold Mine and the Wassa Mines. Output is expected to decline at the Bibiani Mine.

Tanzania's production was likely to rise to 60 tonnes by 2009 with the opening of the Buckreef Mine in 2007 and the Buzwagi Gold Mine in 2008 and the increased capacity at the North Mara Mine; these increases could more than offset the decreased production at the Geita Gold Mine

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