GBR meets with MMG to discuss its operations in DRC and what needs to be done to improve the business environment.
Looking at the current situation in the DRC, what does MMG believe needs to happen for the country to recognize its full mineral potential?
We need more robust conversations on how to improve the business environment to get investors excited, specifically by discussing how to support the large industries by bringing in smaller industries. There are not many small industries currently active in the DRC; most of them are sitting across the border where there is a more conducive business environment. We need to support the capacity of smaller companies to supply consumables and other items into the mining sector to promote a healthier industry overall. It is not the job for the mining industry to do grassroots development of these industries, however, discussion needs to happen between the private sector and the government to change the regulatory framework to the benefit of all the different industries.
How does MMG approach its relationship with the government in the DRC and how can the private sector best assist in improving the conditions in DRC? Continue reading
What would you describe as your key milestones during your tenure as the first Minister of Mining in Malawi?
JB: As The first Mining Minister in Malawi I have a major challenge to develop a new but key ministry for the nation.
My number one focus is to ensure that we have a legal framework that is aligned with international best practices. It is crucial that mining companies already present in Malawi are fairly treated and that new mining initiatives benefit both Malawians and new investors. We will also integrate artisanal small‐scale miners into the formal mining sector. Secondly, as Minister, I will follow up on projects that are already pre‐existing and new exploration activities to make certain the mining community knows the Ministry is available to listen to the challenges and explore together the best solution moving forward.
Stanbic has been present in Zambia since 1992 with Standard Bank’s acquisition of ANZ Grindlays as a part of its African business development strategy. Can you tell us about Stanbic’s evolution in Zambia?
PR: Stanbic has branches in 13 cities and towns in Zambia and will be opening three more branches this year as our expansion in Zambia continues. Stanbic, a part of the JSE listed holdings company, Standard Bank Investment Corporation, was the first South African bank to identify with the potential of embarking into the rest of Africa. This bold move continues to stand us in good stead making the Stanbic franchise in Africa is a very powerful one with a significant first-mover advantage. Stanbic is well positioned in the local market, offering a full retail banking bouquet, business banking services and corporate and investment banking solutions.
Andy Clay and Godknows Njowa talk about the operations of Venmyn Deloitte.
Venmyn Deloitte was established in November 2012, when Deloitte purchased 25-year-old mineral advisory firm Venmyn and incorporated it into Deloitte South Africa’s Mineral Advisory Services practice. Can you elaborate on the company’s role in the African mining industry?
AC: The purpose of Venmyn’s merge with Deloitte is twofold. Firstly, through Deloitte we now have a base in almost every country and are truly global. Secondly, we have access to a vast selection of specialized skills that we can call upon as Deloitte has 250,000 employees worldwide and can do business practically anywhere, mainly for the securities exchanges and transaction orientated projects. We specialize financial valuation, technical evaluation and projects requiring technical expertise. Venmyn Deloitte helps companies to understand the value of their assets relative to the market price. Companies have to value their assets relative to impairment calculations and Venmyn Deloitte helps them do that within the context of IFRS standards and the mineral asset valuation codes. A mineral asset is much more than the ore in the ground. It is also the ability to license and to mine it and the ability to raise finance. The accounting definition of an asset is a resource that is in control of an enterprise and from which future economic benefits will flow. The problem is that by the legal interpretation of control and the accounting interpretation means 51%. Godknows and myself also sit on the new International Minerals Valuation Committee that is coordinating a new common mineral asset valuation template.
Mark Learmonth discusses the challenges of operating in Zimbabwe.
Can you provide a brief overview of Caledonia and the evolution of its operations in Africa?
ML: Caledonia is a Canadian company whose main interest is a 49% share in the Blanket gold mine in Zimbabwe. Becoming fully indigenized in late 2012 has afforded us tremendous growth opportunities. Blanket gold mine produced a record of just over 45,000 oz in 2012 and has very low cash cost of $570 per oz in 2012, down from $590 from the previous year. In January of 2013 we announced Blanket mine’s growth strategy to increase production by 90% to 76,000 oz by 2016. Blanket will be investing $37 million that will be internally generated at the mine over the next five years. Caledonia paid its first dividend in February of 2013 and has just announced a further dividend in respect of profits generated in 2012. We are one of a very small number of gold mining companies that will be growing aggressively over the next few years whilst paying a dividend. We have surplus capacity and we can increase production substantially without having to invest heavily in the metallurgical plant. Further north, Caledonia also has a base metals exploration project that focuses mainly on copper in the North West province of Zambia.
Ralf Hennecke discusses BME’s long history in Zimbabwe.
In our last report in 2011 South Africa accounted for 75% of BME’s business in Africa and there were plans to expand its operations in Africa. Can you tell us how these plans have progressed since then?
RH: In Southern Africa BME now has a large portion of the market share on surface mining and on the entire continent outside of South Africa, our market share has risen considerably over the last year. This is evident in that Africa is now on par with South Africa in terms of turnover, which is a significant change over the last two years. This can be attributed to phenomenal growth in Africa rather than a contraction in the South African market, as this has in fact been steadily growing. In the last 12 months BME’s volumes grew by 92% in the rest of Africa. Differentiating between surface and underground mining in South Africa, BME has a small market share of the underground market, while we are predominantly strong in surface mining. In Africa, BME is equally strong in both and may even be a stronger supplier for underground mining from a volume perspective. Zimbabwe, Zambia and Ghana have more underground mining than their African counterparts and in both Zimbabwe and Zambia, BME has the largest underground market share. There seems to be a trend in Africa for many surface mines to change to underground when they get too deep.
Zimbabwe is one of the richest countries on earth with respect to untapped mineral wealth and natural resources per person. Today the mining industry countributes only 15% to the nations GDP, however givien the mineral endowment, there is room for growth. What steps is the Ministry taking to perpeturate long-term sustainable growth in one of Zimbabwe’s mainstay industries?
PM: The Ministry of Mines and Mining development superintend the development of the mining sector in Zimbabwe. The Ministry is the administrator of the mining laws and regulations and we can provide any potential investor with the information they need to invest in the mining industry.