The Mineral Industries of Africa in 2008

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The Mineral Industries of Africa in 2008 2008 Minerals Yearbook AFRICA U.S. Department of the Interior September 2010 U.S. Geological Survey THE MINERAL INDUS T RIES OF AFRICA By Thomas R. Yager, Omayra Bermúdez-Lugo, Philip M. Mobbs, Harold R. Newman, Mowafa Taib, Glenn J. Wallace, and David R. Wilburn The 56 independent nations and other territories of continental • Niger—National Institute of Statistics, Africa and adjacent islands covered in this volume encompass • South Africa—Department of Minerals and Energy, Mineral a land area of 30.1 million square kilometers, which is more Economics Directorate, than three times the size of the United States, and were home • Swaziland—Central Statistical Office, to 984 million people in 2008. For many of these countries, • Tunisia—Industrial Promotion Agency, mineral exploration and production constitute significant parts For basic economic data—the International Monetary Fund. of their economies and remain keys to future economic growth. For mineral consumption data— Africa is richly endowed with mineral reserves and ranks first • BP p.l.c., or second in quantity of world reserves of bauxite, chromite, • Department of Minerals and Energy of the Republic of cobalt, hafnium, industrial diamond, manganese, phosphate South Africa, and rock, platinum-group metals (PGM), soda ash, vermiculite, and • International Iron and Steel Institute. zirconium. For exploration and other mineral-related information—the The mineral industry was an important source of export Metals Economics Group (MEG) in Canada. earnings for many African nations in 2008. To promote exports, groups of African countries have formed numerous trade blocs, General Economic Conditions which included the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), the In 2008, the real gross domestic product (GDP) of Africa Economic Community of Central African States, the Economic increased by 5.2% after increasing by 6.3% in 2007. In Community of West African States, the Mano River Union, the 2008, the GDP increased by an average of 6.1% in African Southern African Development Community (SADC), and the petroleum-exporting countries and by an average of 4.7% in West African Economic and Monetary Union. Algeria, Angola, African petroleum-importing countries. GDP growth in African Libya, and Nigeria were members of the Organization of the petroleum-exporting countries was projected to be at or about Petroleum Exporting Countries (OPEC). In 2008, COMESA, 2.2% in 2009 and 5.1% in 2010. In petroleum-importing EAC, and SADC agreed to form an expanded free-trade zone. countries, GDP growth was expected to be at or about 1.4% in The African Union was formally launched as a successor 2009 and 3.3% in 2010 (International Monetary Fund, 2009, to the Organization of African Unity in 2002 to accelerate p. 90). socioeconomic integration and promote peace, security, and Decreased economic growth is likely to be the result of the stability on the continent. worldwide economic crisis that started in late 2007. In Botswana, The U.S. Geological Survey (USGS) acknowledges and the GDP is expected to decrease by about 10.2% in 2009 because expresses its sincere appreciation to the following Government of the collapse in global demand for diamond. South Africa’s agencies, international institutions, and private research GDP is likely to decrease by 2.2% in 2009 in part because of a organizations for providing mineral production statistics, broadly based decrease in mineral production. Angola, Equatorial basic economic data, and mineral exploration and other Guinea, and Nigeria were likely to face adverse economic effects mineral-related information: from the decrease in worldwide petroleum demand (International For mineral production statistics— Monetary Fund, 2009, p. 89-90, 173). • Algeria—Ministry of Energy and Mines, • Benin—Ministry of Mines, Energy, and Water, Investment Data and Political Risk • Burundi—Ministry of Energy and Mines, • Côte d’Ivoire—National Institute of Statistics, Despite the decrease in the GDP in 2009 in South Africa, • Egypt—Ministry of Petroleum, numerous new mines and expansions of existing mines were • Ethiopia—Ministry of Mines and Energy, planned that included coal, diamond, gold, iron ore, manganese, • Gambia—Geological Department, PGM, titanium, and zirconium mines. The estimated capital • Ghana—Minerals Commission, costs of the expansion of the Sishen iron ore mine was • Guinea—Ministry of Mines, Geology, and Environment; $1.2 billion; the new Sishen South iron ore mine, $1.1 billion; National Directorate of Statistics, the Goedgevonden coal mine, $390 million; the Burnstone • Mali—National Directorate of Geology and Mines, gold mine, $238 million; and the Xolobeni mineral sands mine, • Mauritania—National Office of Statistics, $200 million. • Mauritius—Central Statistics Office, Elsewhere, capital expenditure for the Ambatovy nickel • Morocco—Directorate of Statistics, mine in Madagascar was expected to total $3.3 billion by • Mozambique—National Directorate of Mines, 2013. The capital costs of the Moatize and the Benga coal • Namibia—Ministry of Mines and Energy, mines in Mozambique were estimated to be $1.4 billion and AFRICA—2008 1.1 $800 million, respectively. In the Democratic Republic of the metals, diamond, gold, PGM, and uranium (Metals Economics Congo [Congo (Kinshasa)], the estimated capital cost of the Group, 2008). Tenge Funkurume copper mine was $1.9 billion; the Ruashi Exploration was focused primarily in (in order of the number Mine, $335 million; and the Kinsevere Mine, $200 million. The of sites being actively explored) South Africa, Zambia, Namibia, capital cost of the Kouilou potash mine in the Republic of the Tanzania, Congo (Kinshasa), Ghana, Burkina Faso, and Mali, Congo [Congo (Brazzaville)] was estimated to be $723 million. but activity also took place in a number of other countries. Gold Projects in the feasibility or prefeasibility stage included the targets accounted for approximately 33% of reported African Twangiza and the Moto gold mines in Congo (Kinshasa), which exploration projects; PGM made up about 15%; copper and had estimated capital costs of $541 million and $483 million, diamond each represented about 13%; uranium made up about respectively. In Madagsacar, the capital cost of the Ranobe 12%; and base metals made up about 7%. Based on the number of mineral sands project was expected to be $250 million. The active exploration sites, early-stage projects composed about 53% capital cost of the proposed Kanyika niobium (columbium) of the 2008 activity, whereas producing projects accounted for mine in Malawi was estimated to be between $156 million and about 24% and feasibility stage projects represented about 16%. $177 million. Exploration activity in Africa in 2008 fluctuated widely over Countries directly affected by wars, internal ethnic or political the course of the year as the result of changing commodity conflicts, and refugee displacements in 2008 included Chad, prices, disruption of mineral supply owing to electricity Congo (Kinshasa), Côte d’Ivoire, Ethiopia, Nigeria, Somalia, shortages and regional unrest, and reduced credit availability. Sudan, and Uganda. At the beginning of 2008, commodity prices were high and mineral exploration was active in many areas of the region. Legislation Australian and Canadian companies, which have traditionally invested heavily in African minerals projects, announced plans High mineral commodity prices at the beginning of 2008 to continue such investment. China announced ambitious plans led some Governments in Africa to review existing mining to invest in the mineral sector of such African countries as agreements with a view toward increasing state revenues from Congo (Kinshasa), Guinea, Niger, South Africa, and Zambia. exploration and mining companies. Mineral exploration projects Indian-owned companies expanded efforts to prospect for in Congo (Kinshasa) are ongoing in spite of concerns related to gold and uranium in Niger and announced development plans the Government’s reevaluation of mining contracts and unrest in for manganese and iron ore projects in Côte d’Ivoire (Cocks, parts of the country (Vaccaro, 2008). Mining contracts in Guinea 2008). Russian firms were also investigating opportunities to are also being reviewed after a change in government following gain additional access to African minerals (Pfeiffer, 2008). the death of President Conte (Mukumbira, 2008; Mining Review Exploration activity in South Africa was affected by electricity Africa, 2009). In November 2007, the Government of Tanzania shortages in early 2008. Despite high levels of interest in appointed the Mining Review Contracts Committee to review exploration, global financial difficulties at the end of 2008 all mining contracts. In July 2008, the Committee recommended further affected mineral-dependent economies in Africa, that the Government own 10% of the shares of all mining particularly Botswana, Congo (Kinshasa), South Africa, Zambia, companies in Tanzania (Mining Journal, 2008). and Zimbabwe, leading to layoffs and scaled-back investment Zimbabwe implemented its Indigenization and Economic and growth projections (Tsiko, 2009). Empowerment Act in 2008, which requires that indigenous Zimbabweans own at least 51% of any business operating in Commodity Overview Zimbabwe. Zimbabwe’s central bank has proposed reforms to the country’s mining sector that would effectively make the Estimates for production of major mineral commodities for Zimbabwe Mining Development
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