01/04/2010 - 00:00

Like moths to Africa’s flame

01/04/2010 - 00:00

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THROW a dart virtually anywhere at a map of the African continent and the chances are an Australian company will be operating in close proximity.

Like moths to Africa’s flame

According to Canberra, more than 300 Australian companies are active in Africa with total or prospective investments worth $20 billion, mostly in the mining and energy sectors.

That should hardly come as a surprise given Africa’s legendary mineral wealth.

The continent is already the biggest source of gold, copper, diamonds and manganese, and is a major global source of myriad other commodities such as oil, gas, uranium, iron ore, coal, nickel, mineral sands and bauxite.

Australian geologists also have a special affinity for the continent, given scientists say that 500 million years ago Western Australia and East Africa were joined together as part of the Gondwana supercontinent, meaning common geological traits are widespread.

As in the Pilbara, iron ore remains the biggest game in town for Australians in Africa, with Rio Tinto’s planned $US6 billion iron ore development at Simandou in Guinea the king of the heap.

The project hosts at least 2.2 billion tonnes of high-grade iron ore, from which Rio plans to produce up to 70 million tonnes a year.

Though the Guinea government had threatened to strip Rio of the leases for failing to develop the project earlier, it last month reaffirmed the company’s rights when Rio agreed to sell a 44 per cent stake to China’s Chinalco group for $US1.3 billion.

Meanwhile, BHP has formed a joint venture with Indo-European steel giant ArcelorMittal to jointly progress their neighbouring iron ore assets in Guinea and Liberia, including BHP’s huge Nimba project not far from Simandou.

But several small Western Australian companies are also at the forefront of unlocking iron ore potential of the Africa’s north and west.

Sundance Resources this year expects to complete feasibility studies into a planned $US3.3 billion, 35mtpa iron ore mine at Mbalam in Cameroon, which would immediately see it rival Fortescue Metals Group in size.

To the north in Mauritania, Sphere Investments has completed feasibility studies for a $US1.65 billion magnetite iron ore mine at Guelb el Aouj and is canvassing prospective partners. It is also seeking partners for the smaller Lebtheinia magnetite project nearby and its planned Askaf hematite iron ore mine.

Tony Sage’s Cape Lambert Resources has been an aggressive mover in the West African iron ore sector, taking a 63 per cent stake in the advanced Marampa iron ore project in Sierra Leone and bidding to buy the outstanding 68 per cent of Congo-focused iron ore associate DMC Mining.

Meanwhile, former Kingstream Steel boss Nik Zuks has resurfaced in London with plans for a $600 million float of his aspiring Guinea miner Bellzone Mining to complete studies into its proposed $US4.4 billion Kalia magnetite iron project.

Uranium has also become a commodity of choice for Australians in Africa, inspired by Perth-based Paladin Energy’s development of the big Langer Heinrich mine in Namibia, and its new Kayelekera mine in Malawi. Expansions at the two mines are expected to yield more than 13 million pounds of uranium annually by mid-2014, cementing Paladin as one of the world’s biggest producers.

Close on its heels is Extract Resources, which is planning to match Paladin’s output from its $US700 million Rossing South project in Namibia by 2014, followed by scores of smaller explorers, such as David Riekie’s Avonlea Minerals, which are also scouring for uranium in Namibia, Botswana, Tanzania, Zambia, and Malawi among others.

Copper has been another drawcard for Australian companies, with Perth-based Equinox Minerals and Anvil Mining each establishing world-scale copper mines at Lumwana in Zambia and Dikilushi in the Democratic Republic of Congo respectively, despite significant logistical and political challenges.

Gold has traditionally been the main attraction for Australian companies in Africa, and scores of local firms are active in Ghana, Tanzania, South Africa and elsewhere, most notably Resolute with its Syama and Golden Pride mines in Mali and Tanzania respectively.

Other advanced players include Azumah Resources and its neighbour Ampella Mining, which have identified major gold resources on the Ghana-Burkina Faso border.

Adamus Resources and Perseus Mining are also nearing production at their Ghana gold projects.

Meanwhile, Perth-spawned Aquarius Platinum and Zimplats have become world-scale platinum miners. Aquarius is the world’s fourth largest platinum miner with three mines in South Africa, while Zimplats re-opened BHP’s troubled Hartleys mine in Zimbabwe before becoming part of the giant Impala Platinum group.

African coal has become an increasing attraction to Australian companies, with Perth pair Riversdale Mining and Continental Coal now in production at their Zululand and Vlakvarkfontein mines in South Africa respectively. Perth energy developer Aviva Corporation is also planning a massive coal mine and power station development at its Mmamantswe coal project in Botswana.

Similarly, Albidon Nickel owns the Munali nickel mine in Botswana, and manganese miners and explorers such as OM Holdings, Shaw River Resources and Jupiter Mines are evaluating major manganese deposits in South Africa’s Kalahari Basin

 

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