New Delhi, India --- 26 March 2013 - An auction to sell the 10% stake owned by Indian group Videocon Industries in the Area 1 oil block of the Rovuma basin in Mozambique, is taking place in Hong Kong between now and the end of the month.

Citing a business source, Indian newspaper “The Business Standard” reports that when it announced that it would put the stake up for sale, the Indian group said it had mandated the Standard Chartered and Union des Banques Suisses (UBS) banks to carry out the deal.

So far no information has been released about the auction underway, which is expected to involve over US$2 billion, based on sales of other stakes in the block and in Area 4, where the China National Petroleum Corporation (CNPC) paid US$4.21 billion to Italian group ENI for a 20% stake.

The first big deal involved the Area 1 block, when Thai state group PTT paid US$1.89 billion for an 8.5% stake owned by Irish company Cove Energy.

According to “The Business Standard,” most of the profit from this sale, which requires approval from the Mozambican authorities and will be charged capital gains tax, will be used to reduce the group’s debt, currently estimated at US$4 billion.

Johannesburg, South Africa --- March 25, 2013 - Transnet SOC Limited ‒ South Africa’s state-owned ports and rail operator ‒ is planning to raise R20 billion (US$2.16 billion) for the fiscal year through to March 2014 to fund its expansion plans.

This is of major importance to the mining industry ‒ a top customer which has literally all its bulk minerals like coal, iron ore and manganese transported to the coast by Transnet for export, reports Bloomberg News.

The figure compares to about R18 billion raised in the current financial year, Transnet CFO Anoj Singh said in an interview here. About 60% of the target of R20 billion may be reached by selling five-to-ten year bonds, he added. “Beyond that, it gets expensive.”

Transnet plans to tap the South African market for about 60% of the bond issue and offshore investors for the rest, according to Singh. The money will go toward capital expenditure for the year of R35 billion rand, while debt funding requirements will be 11% higher than a year ago, he said.

Transnet started a seven year R300 billion development plan across South Africa and its neighbouring commodity-producing countries last year.

The company’s financial performance for the year ending March 2013 will be “reasonable,” Singh said. Transnet is “commodities linked” and weaker “global economic growth has impacted us,” he added.

In the 2012 fiscal year, earnings before interest, taxes, depreciation and amortisation rose 20% to R18.9 billion.

Dar es Salaam, Tanzania --- 25 March 2013 - Chinese President Xi Jinping will set out plans for mining and infrastructure development on a trip to Africa this week, as China seeks to reassure leaders on the continent who have voiced unease about his country’s trade relations.

During his eight-day trip Xi, 59, stops in Tanzania, the Republic of Congo and South Africa, where he’ll sign business cooperation deals and attend a summit of BRICS nations, reports Bloomberg News.

Trade between Africa and China doubled since 2007 to more than US$200 billion and Chinese investment stands at US$20 billion, according to Standard Bank Group Limited,  Africa’s biggest lender.

While African nations welcome the investment and the job creation that comes with it, leaders from Botswana’s Ian Khama to Nigerian central bank chief Lamido Sanusi are asking whether the relationship has benefited Africa as much as it has China. That’s a shift in tone after officials welcomed China for taking a different strategy from the West by offering investment without demanding poverty alleviation, democratic reforms or anti-corruption measures.

“There’s a belief that since Africa got a raw deal from the colonial West, then the Chinese must be Africa’s best friend,” said George Ayittey, a Ghanaian economist and president of the Free Africa Foundation, a Washington-based research institute, in a phone interview.

“But the evidence doesn’t show that, and the main criticism is that they are building infrastructure in exchange for Africa’s resources in deals that are structured to favour China.”

Xi arrived in Tanzania yesterday and met President Jakaya Kikwete before the two countries signed 16 economic cooperation agreements worth as much as US$16 billion, Salvator Rweyemamu, director of presidential communications, said in a phone interview. The country also signed a loan agreement with China Merchants Bank for a planned US$10 billion port at Bagamoyo on the Tanzanian coast, he added.
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Today, Xi will deliver a major speech to reaffirm China’s policy to Africa, Chinese vice foreign minister Zhai Jun told reporters in Beijing..

“We expect him to talk about avenues of investment, trade, peace and security, and to elaborate on mining, oil and gas, energy and infrastructure development,” Tanzanian foreign minister Bernard Membe said in an interview.

Xi will also attend a two-day summit of leaders from the so-called BRICS countries -- Brazil, Russia, India, China and South Africa -- that begins in the South African port city of Durban tomorrow. He arrives in Congo Republic on March 29 for talks with President Denis Sassou-Nguesso, according to Congo’s Communications Ministry.

More than 50% of China’s imports from Africa in 2012 were coal and oil, with iron ore and copper making up a further 14%, Jeremy Stevens, a Beijing-based economist at Standard, said by e-mail.

This has caused some concern among African leaders. Sanusi of Nigeria, Africa’s biggest oil producer, compared China’s purchase of primary goods and sale of manufactured items to the continent to British colonial policies. Sanusi also criticized Chinese investment in Africa which, with some exceptions, he said,  failed to transfer skills to local communities.

“Africa must recognize that China, like the U.S., Russia, Britain, Brazil and the rest, is in Africa not for African interests but its own,” Sanusi said in an opinion article in the London-based Financial Times on March 11.

Botswana’s Khama told a South African newspaper last month that he was echoing comments voiced privately by other African presidents when he expressed frustration at his government’s dealings with Chinese companies. The state blames China National Electric Equipment Corporation for delays in building generators at the Moropule B coal-fired power plant that have resulted in outages in the southern African country.

“We have had some bad experiences with Chinese companies in this country,” Khama said in an interview published in the Johannesburg-based Business Day  last month: “We are going to be looking very carefully at any company that originates from China in providing construction services of any nature.”

China has more than 2,000 companies working throughout the continent, Jia Qinglin, former chairman of the National Committee of the Chinese People’s Political Consultative Conference, revealed in January.

“Yes, there are some growing pains,” he said. “There are one to two million Chinese entrepreneurs. They have made a great contribution to local development, but due to various reasons, such as lack of mutual understanding, there have been some problems.”

Johannesburg, South Africa --- 25 March 2013 - The South African mining industry ‒ backbone of the continent’s biggest economy ‒ is heading for its worst electricity shortage in five years in a threat to platinum and gold production and to the rand currency.

Bloomberg News reports that State-owned Eskom Holdings SOC Limited is straining to meet demand from a growing economy as consumption is set to swell when the Southern Hemisphere winter drives the need for heat. Faults at the Koeberg nuclear power plant near Cape Town are crimping supply, while imports are reduced because of flooding in Mozambique.

“We do see a significant risk of power shortages,” said Shaun Nel, director at the Energy Intensive User Group of Southern Africa, whose 32 members include the local units of BHP Billiton Limited  and ArcelorMittal.  “We are seeing a significant number of factors that point to a system in distress.”

A repeat of the January 2008 blackouts that halted South African mines for five days and paralysed factories, would imperil South Africa’s 2013 growth forecast of 2.7%. The rand has dropped to a four-year low, partly on concern that disruptions to mining will cut exports from the holder of the biggest-known reserves of platinum and chrome and fifth- largest gold producer.

Eskom, generator of about 95% of the nation’s power, estimated surplus capacity over peak demand for March 18 at 1.5%. That’s as thin as the margin was when the power cuts struck five years ago, pushing gold and platinum prices to records as Anglo Amrican, Impala Platinum Holdings Limited and Harmony Gold Mining Company halted operations.

While Eskom later revised that March 18 margin to 3.3%, it remains razor-thin compared with a level of as much as 17% in mid-December.

An average of about 10,800MW, or 25% of Eskom’s total capacity including imports from Mozambique, has been unavailable this year because of maintenance, both planned and unforeseen, according to data from the Johannesburg-based utility.

Eskom targets spare capacity of 15%. Peak power demand of about 31,000MW this week compares with the more than 36,000MW consumed at the height of last winter.

“This winter will be a particular challenge,” Eskom CEO Brian Dames said in an interview on Johannesburg-based Talk Radio 702 last week. “I am concerned about the increased unreliability.”

Eskom said in a status bulletin yesterday that “the system remains tight.” The power producer is spending US$55 billion to replace old equipment and expand capacity.

Faults at the Koeberg nuclear plant north of Cape Town will keep it partly shut until April, while imports from Mozambique have been cut by 50%. Furthermore, Medupi ‒ set to be the world’s fourth-biggest coal-fired station once complete ‒ has been beset by delays, with labour unrest resulting in a two-month construction shutdown this year. There are doubts that it will meet its completion deadline at the end of this year.

Perth, Australia --- 25 March 2013 - The declining rate of new gold discoveries and grades across the global market during the last decade has accelerated over the last 4 years.

Data and analysis from IntierraRMG reveals that the two-year period from 2003 to 2004 was the best in the study range, with over 400Moz of new gold discovered. This includes inferred, indicated and measured ounces with an average grade of 1.65g/t. In contrast, 2005 and 2006 had the lowest number, with just over 150Moz of  new gold discovered - albeit with a similar grade.

Discoveries then increased significantly during 2007 to 2008 with greater than 390Moz. The average grade also increased significantly to 2.65g/t ‒ the highest in the 10 year period.

Over the next two years, slightly more than 250Moz were discovered with a declining grade of 1.25g/t. This deterioration continued through 2011 and 2012 as the amount of new gold ounces discovered dipped below 225Moz with a reduced grade of 1.17g/t.

The analysis revealed that in this 10-year study period, Africa lead the way with new discoveries of 479Moz of gold with an average grade of 2.8g/t. Next was North America, although with only 290Moz, and with a much lower grade of 1.3g.t.

Europe had the third most new discoveries with 240Moz with a higher grade than North America of 2.0g/t. South America recorded 188Moz, while Australasia saw 74Moz of new discoveries with an average grade of 1.4g/t.

IntierraRMG Western Hemisphere director Glen Jones concluded, “With global drilling activity waning, IntierraRMG forecasts that the next few years will continue the trend with fewer new gold discoveries.”

Johannesburg, South Africa --- 22 March 2013 - Witwatersrand Consolidated Gold Resources Limited (Wits Gold) ‒ which has a primary listing on the JSE and a secondary listing on the TSX ‒ is preparing a bid for the Burnstone gold mine in South Africa, which is in a business-rescue programme. The company is also keen to bid for AngloGold Ashanti’s Navachab gold mine in Namibia, says Wits Gold CEO Philip Kotze.

Burnstone has been idled while business-rescue practitioners find a buyer. The mine was on the cusp of being ramped up to full production but was stalled by operational problems. The business rescue started in September last year after the owner, Great Basin Gold, ran out of money.

Five approved potential buyers are bidding for the asset and three more are awaiting approval. Unconfirmed reports suggest Russia’s Renova and a Chinese company are on the list.

In a statement issued here, Wits Gold said it had spent R20 million on a diligence study of Burnstone, which mines the channelised Kimberley Reef near Balfour in Mpumalanga.

The hard work has been done by Great Basin, which built a metallurgical plant, a decline shaft and a vertical shaft at the mine.

Wits would need to raise capital by issuing shares in about August, Kotze said, adding that Burnstone was too debt laden for Wits to incur debt to buy the asset. “Our challenge is to not overpay for the asset. If we get it at the right price we can make a real success of Burnstone. Otherwise we are quite happy to walk away,” he added.

One criticism of Burnstone is that the long-hole stoping mining method is wrong.
Some mining experts have suggested that the nature of the reef is better suited to conventional mining to reduce dilution.

Kotze said Wits would use conventional mining at the stopes and use machines for development. Trials would continue on long-hole stoping at some parts of the mine where the reef was thickest.

Wits plans a different underground development model to that of Great Basin ‒ one that would take three years to complete. The focus, once it is in production, is to generate cash to return to shareholders, making Wits an attractive dividend play for investors.

The second asset Wits would like to acquire is AngloGold’s Navachab mine, which joint interim AngloGold CEO Srinivasan Venkatakrishnan says is up for sale, with the process starting this month.

The purchase of one or both of these mines should result in an upward re-rating of Wits’s share price, Kotze said.

Wits will complete a bankable feasibility study in September to build a new gold mine at its shallow De Bron-Merriespruit deposit near Welkom in the Free State. The project, with life-of-mine capital of US$680 million, would be funded with debt and equity in a 60:40 split, Kotze added.

Maputo, Mozambique --- 22 March 2013 - Rio Tinto Ventures (Mauritius), a subsidiary of Anglo-Australian mining giant Rio Tinto, and Mozambican mining company Empresa Mozambicana de Exploração Mineira (EMEM), have set up a partnership for coal prospecting in the country’s Tete province.

Called Minas de Changara, the new company ‒ in which the Rio Tinto group owns 75% and EMEM has the remaining25% ‒ will start operating with a portfolio of three coal prospecting and research licenses already owned by Rio Tinto, via Rio Tinto Changara, reports Macauhub News Agency.

The Anglo-Australian group will fund prospecting and research work, and the two partners will be responsible for financing the project’s development if the prospecting work shows that it is feasible for it to be developed.

Rio Tinto, which is listed on the Australian and London stock exchanges, is one of the world’s main mining groups and its portfolio of assets includes bauxite, copper, diamonds, gold, industrial minerals and iron ore.

EMEM is a state company set up in June 2009 whose focus is geological mining, advisory, consulting and technical assistance, prospecting and research for natural resources, and development of partnerships with other national and foreign companies.

Johannesburg, South Africa --- 22 March 2013 - South African mining company Exxaro Resources may dismiss the 3,200 coal miners who have embarked on an illegal strike at six of its operations in the country if they refuse to return by next week.

JSE-listed Exxaro is a South Africa-based diversified mining group with assets of R37 billion and a market capitalisation of R60 billion. It has a commodity portfolio in coal, mineral sands, base metals and ferroalloys, and growing exposure to iron ore. The company is the second-largest South African coal producer with capacity of 47Mtpa, and the third-largest global producer of mineral sands.

London, England --- 22 March 2013 - Eurasian Natural Resources Corporation (ENRC) ‒ the London-listed metals and power company that has posted a surprise full-year loss ‒ is in talks with its five main owners on the issue of selling new shares to expand its free float and raise cash.

Maputo, Mozambique --- 20 March 2013 - Brazilian mining giant Vale has awarded Portuguese construction company Somague two construction projects in Mozambique to the value of US$228 million. They form part of the ambitious overall project on which Vale will be spending a total of US$4.5 billion.

Macauhub News Agency quotes Portuguese newspaper Diário Económico as reporting that the two projects are for the Nacala railway corridor, specifically, “reconstruction of the railway facility of the Nacala line, over approximately 600km.”

The Nacala railroad corridor project is intended to provide a logistical solution for transporting coal mined in Moatize, in Tete province, in northern Mozambique, as an alternative to the overloaded and physically unreliable Sena line to Beira.

The new railroad corridor is a total of 912km long and links the Moatize mine, 20km northeast of the city of Tete, to the port of Nacala-a-Velha, on the Indian Octheean, along a route that also passes through Malawi.

At the end of the process to rebuild the railway, the Nacala railroad corridor is expected to have capacity to carry anything up to 30Mtpa of coal.

Maputo, Mozambique --- 20 March 2013 - The next tender for oil and gas prospecting and production in Mozambique will only be launched after approval of the Oil Law review and its regulation by the country’s parliament and government.   

Daily newspaper Notícias ‒ cited by Macauhub News Agency ‒ reports that natural resources minister Abdul Razak is of the opinion that interest in Mozambique from the international oil industry remains “quite strong” and that several companies are waiting for new public tenders to be launched to bid for new prospecting areas.

“We hope that by the end of this year, following the review and update to current oil legislation, a new tender will be announced that will offer new opportunities for oil and gas prospecting and production in Mozambique,” said Razak.

He also noted at last week’s international gas conference in the Mozambican capital that there were some sedimentary basins that had yet to be explored, such as lake Nyassa.

Although this basin has already been the focus of a dispute between Mozambique’s neighbours Tanzania and Malawi, on the Mozambican side there has been no concession of areas for oil and gas research so far, as the government’s priority has been the Rovuma basin.

The Oil Law review (Law 3/2001) is intended to introduce regulations on natural gas liquefaction as an oil operation, as well as non-conventional natural gas exploration, such as the methane associated to coal, which have taken on an importance that they did not previously have.

Sydney, Australia --- 20 March 2013 - Energy-related resource development company Resource Generation Limited ‒ which is Australian-based and dual-listed on the Australian and Johannesburg stock exchanges ‒ has expressed its intention of finding alternative sources to fund its US$630 million Boikarabelo coal project in the Waterbereg area of South Africa.

Perth, Australia --- 20 March 2013 - Australian company Triton Minerals ‒ a mineral explorer and resource management company headquartered in Perth ‒ is due to start quarrying graphite soon in the Cabo Delgado province of Mozambique.   

In a statement published on the company’s website here, managing director Brad Boyle noted  that he was very happy with the launch of the first phase of exploration. He said that acquisition of equipment and hiring staff was also going according to plan.

Macauhub News Agency reports that the initial focus will be on the Balama Norte region, which is considered to have high quality graphite deposits due to its proximity to the graphite currently being explored by Australia’s Syrah Resources.

In the statement Triton Minerals also said that representatives of contractor Jigsaw Geoscience Pty, as well as from their partner Grafex Limited, would visit the project’s location this week.

Australian company Jigsaw Geoscience has been hired to map the land and collect soil samples, with an initial focus on the Balama Norte licence.

Canberra, Australia --- 19 March 2013 - Mozambique and Australia have signed a partnership agreement on mining development which is directed at institutional capacity and the training of human capital in the southern
African country.

The agreement was signed by Mozambican foreign minister Oldemiro Baloi, and the secretary for foreign affairs of the Australian parliament, Richard Marles, at a ceremony witnessed by Mozambican president Armando Guebuza and Australian prime minister Julia Gillard, reports allAfrica.com.

Speaking at the press conference, Baloi explained that the agreement was aimed at developing the mining sector in Mozambique, and one of its essential components is institutional capacity building and the training of human capital.

“As a country, we want to make maximum use of the experience of Australia”, he said. “If we look attentively at the history of this country, we note that about a century ago it was in the same situation as Mozambique today – with great potential resources, but not yet translating those resources into wealth.” Baloi said that Australia had undergone a successful transformation from which Mozambique could learn a great deal.

He added that the government wanted the wealth generated by the exploitation of mineral resources to benefit all Mozambicans. But for this to be possible, the training component was very important “so that Mozambicans themselves may exploit what they will benefit from.”

In a joint communiqué the two countries expressed their satisfaction with the growing ties between Mozambique and Australia, including international matters that concerned both of them, such as climate change and food security.

Julia Gillard took the opportunity to thank Mozambique for supporting Australia in its bid for a seat as a non-permanent member on the United Nations Security Council for the period 2013/2014.

The communiqué said that Guebuza and Gillard had discussed strengthening bilateral cooperation, including in water supply, sanitation, agriculture, and the granting of scholarships for Mozambicans to study at Australian universities. They also agreed to encourage private businesses in the two countries to deepen trade and investment ties.

Johannesburg, South Africa --- 19 March 2013 - AngloGold Ashanti and Sibanye Gold have lost about R481million after a power outage caused by a lightning strike at an Eskom substation last week forced them to close large operations.

While the outage at the Midas substation near Carletonville, which supplies 400MW to the mines, is isolated, concerns are growing about Eskom's ability to keep the lights on if it does not commission its Medupi project by the end of the year, Fin24 reports, quoting Business Day.

On Monday Eskom said it had a national buffer of 500MW, due to unplanned outages of 7227MW at its plants. This was close to the margins that led to blackouts in late 2007 and early 2008.

The international standard for a reserve margin, a measure of capacity over demand, is 15%. In South Africa it is 1%.

If Eskom does not bring its Medupi plant on line by the end of the year, South Africa faces the real prospect of blackouts and load shedding next year.

AngloGold and Sibanye, formed after Gold Fields unbundled three mines, appear to have lost 32,646oz of gold production worth R481million at current prices due to the outage. Eskom has since restored 300MW of power to the area.

During the power failure, Driefontein mine used generators to hoist 400 people to the surface.