Politics – African Mining Market https://africanminingmarket.com Connecting Suppliers and Buyers Wed, 01 Feb 2023 14:14:16 +0000 en-ZA hourly 1 https://wordpress.org/?v=6.4.1 https://africanminingmarket.com/wp-content/uploads/2023/05/cropped-amm23_identity-32x32.png Politics – African Mining Market https://africanminingmarket.com 32 32 Russian forces help secure Central Africa gold zone https://africanminingmarket.com/russian-forces-help-secure-central-africa-gold-zone/15001/ Wed, 01 Feb 2023 14:13:49 +0000 https://africanminingmarket.com/?p=15001 Iron Ore, Gold

Three nations have agreed with the help of Russian troops to secure a gold-rich region in the Central African Republic rife with armed rebel groups, the latest sign of Moscow’s expanding influence on the continent. A deal struck last month between the CAR, Chad and Sudan aims to fight armed groups operating along the mineral-rich …]]>
Iron Ore, Gold

Three nations have agreed with the help of Russian troops to secure a gold-rich region in the Central African Republic rife with armed rebel groups, the latest sign of Moscow’s expanding influence on the continent.

A deal struck last month between the CAR, Chad and Sudan aims to fight armed groups operating along the mineral-rich borders with the two neighboring states, Hassan Bouba, a powerful ex-rebel leader who now serves as CAR’s livestock minister, said in a phone interview. During a trip to Chad on Sunday, Sudanese General Abdel Fattah Al-Burhan said both countries agreed to “achieve security and stability” in CAR.

The agreement further embeds Russia in the politics and security of the region at a time when the West is trying desperately to curtail Moscow’s growing footprint. The Kremlin has in recent years strengthened ties to African nations including Libya, Sudan, Mali and Burkina Faso.

Western governments including the European Union and the US, United Nations officials, humanitarians and rebel fighters say that the Wagner Group, a private mercenary firm with close ties to the Kremlin that was hired by CAR’s government in 2018 to fight a decade-long rebel insurgency, has concentrated on securing diamond and gold mines across the country. CAR’s government maintains that the only Russian forces in the country are unarmed trainers.

Most of the CAR has been outside of state control for the past decade, subject instead to the power of various rebel factions fighting for access to the country’s vast gold and diamond reserves.

Russian Ministry of Defense spokesman Igor Konashenkov didn’t respond to a request for comment sent by text message. A Chadian presidency official declined to comment.

Last year, government forces backed by Russian troops attempted to take control of resource-rich areas in northeastern CAR, according to Enrica Picco, Central Africa project director for the International Crisis Group and a former member of the UN panel of experts on CAR.

“This really sparked tensions between the armed groups that were trying to protect their last source of revenue in the north of the country and the government forces and Russian allies,” Picco said. The deal struck this month will destabilize the region even further, she said.

Abdu Buda, a spokesman for the rebel UPC, said fighting has begun intensifying in northeastern CAR.

“There are many resources in this area and our enemies have come to leave their businesses and machinery in our territory,” he said.

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Calls for Konkola Copper Mines boost intensify https://africanminingmarket.com/calls-for-konkola-copper-mines-boost-intensify/14974/ Mon, 30 Jan 2023 15:14:31 +0000 https://africanminingmarket.com/?p=14974 Konkola Copper Mines

The contentious issues surrounding Konkola Copper Mines (KCM) have triggered varying concerns, as rallying calls for Vedanta Resources Limited to return to the giant mining firm intensify amid plummeting business opportunities on the Copperbelt and other areas. Many interest groups, including trade unions, civil society, suppliers and contractors have cried blue murder over receding business …]]>
Konkola Copper Mines

The contentious issues surrounding Konkola Copper Mines (KCM) have triggered varying concerns, as rallying calls for Vedanta Resources Limited to return to the giant mining firm intensify amid plummeting business opportunities on the Copperbelt and other areas.

Many interest groups, including trade unions, civil society, suppliers and contractors have cried blue murder over receding business opportunities in Chililabombwe, Chingola, Kitwe and other areas occasioned by under-performing mining firms.

In June 2019, the government placed KCM under liquidation and forced Vedanta out of the investment while in January 2021, the government, through ZCCM-IH, acquired 90% shares in Mopani Copper Mine as Glencore International exited the deal.

However, Vedanta challenged the action through a protracted legal process until after the United Party for National Development government opted for out-of-court negotiations which are currently on-going.

Mine expert Edward Simukonda called on the government to act expeditiously on Mopani and KCM so that the two major mine assets could quickly stir back to full life as Zambia targets to hit an annual three million tonnes of copper output in the next 10 years.

The two mines, Mopani and KCM, are not producing what is expected of them. They have not produced enough tonnage the past few years because of problems that everybody knows the companies are going through.

“Until these issues are looked into and production starts shooting, I see a very bleak future for us to attain three million tonnes of copper in the next ten years,” he said.

Mr Simukonda said there were a lot of issues that needed to be addressed for Zambia to really rely on KCM and Mopani as the major producers of copper.

“Are the workers paid well? Are they performing according to standard? Do we have enough operating equipment? Do we have capacity to buy new equipment? Are we looking at manpower development?” he noted.

The mine expert believes that even as the government resolves issues at KCM and Mopani, there will also be need to support small-scale producers as has been the case in the Democratic Republic of Congo and other jurisdictions.

The Church is also concerned as Bishop Joseph Kazhila, the general overseer of Life Fellowship Ministries International clearly states that KCM should immediately return to the rightful owners, Vedanta, to bring life back to the mine and surrounding community.

“KCM is in dire need. It is sick. It is in a grave position and it is wrong for people to lie that things are okay. Every business is established to make profit so that it can prosper and expand. How do you engage new employees if the company is not making profit, if the future is bleak?” he questioned.

Bishop Kazhila added: “You cannot continue to pretend that things are well in KCM. In life, it is good to swallow pride. Prevention is better than cure and I think the time to do that is now. There is no way out. We are looking at national interest. People may have had differences with Vedanta in the past but the time to act is now.”

The labour movement has had a change of heart and is now calling for the quick return of Vedanta Resources to KCM, observing that the situation at KCM is desperate.

The Mineworkers Union of Zambia (MUZ), National Union of Miners and Allied Workers (NUMAW) and United Mineworkers Union of Zambia (UMUZ) have urged the government to quicken negotiations with Vedanta so that the global conglomerate can quickly return to Chingola.

MUZ president Joseph Chewe said: “We are aware that the situation at KCM is desperate, starting from Chililabombwe, Chingola, Nkana and Nampundwe. Operations are in dire need of new life,” he stressed.

His counterpart at UMUZ Wisdom Ngwira said the happenings at KCM had negative effects on workers and mining towns while the NUMAW leader Saul Simunjika echoed the sentiments.

The calls for Vedanta to return to KCM management have also been reverberating in the civil society where Advocates for National Development and Democracy executive director Samuel Banda insists that Zambia has no option but to hand back KCM to Vedanta.

Mr Banda said, legally, KCM belongs to Vedanta and whichever way one looks at the issue, the Indian investor has the right of claim, hence there should never be any further delay.

Clearly, the calls to hand KCM back to Vedanta have grown exponentially with ordinary citizens in Chingola and Chililabombwe chipping in.

Mulabizi Mkandawire, a resident of Chingola, said it was time the government moved faster because the situation in the mining town had deteriorated while suppliers and contractors had already been pushed out of business.

Moses Sakuwaha, however, feels that the government must attach strict conditions for Vedanta to follow on return in order to protect suppliers, contractors and workers.

He says stringent conditions are inevitable so that the global firm does not renege on any of the terms and conditions of the agreement.

It is thus dependent upon the government to religiously follow the law and also ensure that KCM is managed in a manner that will benefit both the investor and citizens while upholding national interest and promoting value addition.

It is encouraging that most stakeholders have had a change of heart regarding Vedanta Resources which, during its stay in Zambia, during the reign of the Patriotic Front (PF), was viewed as a bad corporate citizen.

Perhaps the most critical question to ask here is: Why did Vedanta Resources behave in the manner they did during the time of the PF?

Was the behaviour of Vedanta Resources reminiscent of that of the PF?

How did Vedanta behave before the reign of the PF?

Vedanta operates mines in other jurisdictions which include Namibia and South Africa.

How has Vedanta behaved in these countries?

As answers are sought to the foregoing questions, what needs to be borne in mind is that Vedanta Resources are the legal owners of KCM.

Therefore, there is no way Vedanta Resources can be wished away without the Zambian government incurring huge costs, both legal and in form of compensation.

Taxpayers’ money cannot be used to pay costs when an alternative could have been found.

While the government has not publicly given details proffered in the negotiations thus far, Vedanta had announced before the talks began that workers will be offered a 20% salary rise and a one-off K2,500.00 payment to each employee.

Vedanta Resources Limited also pledged to clear the US$220 million owed to suppliers and contractors, which has been outstanding since 2019.

At the time of the pledge, Vedanta Resources chairman Anil Agarwal said: “Vedanta is committed to paying the suppliers, specifically small suppliers, up to two hundred and twenty million United States dollars which was due as on 21 May 2019, when the provisional liquidator was appointed.”

In addition, Mr Agarwal has guaranteed that Zambian-owned small and medium enterprises will be prioritised in the supply chain while payments will be effected within contractual agreements.

Back in India, Vedanta has entered into a joint venture with Faxconn on a 60-40% equity arrangement in the state of Gujarat to set up a mammoth semi-conductor manufacturing plant and a testing unit.

The global operator is intent on setting up a unique investment in vehicle battery manufacturing and opening the Zambian economic outlay to giant firms in India which will, in turn, transfer technology among other economic spin-offs.

Already, Vedanta Zambia country director Moses Banda says his team will engage the government on plans to invest in the electric vehicle battery manufacturing industry in the country.

It is now up to the government to make a decision in the best interest of the country while giving space to Vedanta to grow the investment and generate sufficient profits.

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Zanzibar eyes oil in US$2 billion growth plan https://africanminingmarket.com/zanzibar-eyes-oil-in-usd-2-billion-growth-plan/12473/ Thu, 10 Feb 2022 13:11:00 +0000 https://africanminingmarket.com/?p=12473 Shell, Oil Markets

Zanzibar is touting a US$2-billion plan to entice shipping, explore for oil and process seaweed as it seeks to expand beyond tourism that makes up more than a quarter of its economy. The five-year blueprint proposes developing an oil and gas industry alongside efforts to boost its “blue” economy, Hussein Mwinyi, president of Tanzania’s semi-autonomous …]]>
Shell, Oil Markets

Zanzibar is touting a US$2-billion plan to entice shipping, explore for oil and process seaweed as it seeks to expand beyond tourism that makes up more than a quarter of its economy.

The five-year blueprint proposes developing an oil and gas industry alongside efforts to boost its “blue” economy, Hussein Mwinyi, president of Tanzania’s semi-autonomous archipelago, said in an interview. The government will hire an adviser for the financing and debt needed to fund almost two dozen wide-ranging projects estimated at 5.5 trillion shillings (US$2.4 billion), he said.

The Indian Ocean islands are seeking new sources of income and to reduce dependency on the mainland for provisions, including power. It wants to encourage fishing and better use of the seaweed that’s exported for use in food and beauty products, with a renewed push for diversification coming after global Covid-19 restrictions caused travelers to stay away from its tropical beaches and resorts.

We need to capitalize on oil and gas,” Mwinyi said from his office in Zanzibar City, the capital of the island state of 1.6 million people. Zanzibar has commissioned the collection of data to help attract investment, he said.

The move will boost access to electricity, currently delivered through undersea transmission lines. Talks about building as much as 180 megawatts of renewable and possibly gas generation have started, according to the president.

It’s also looking to promote its position off Africa’s east coast to create a shipping hub where cargoes can be offloaded and rerouted, using the experiences of Dubai and Singapore.

“Their economy grew because of the ports, it was transshipments,” said Mwinyi, the 55-year-old ex-Tanzania defense minister and the son of the nation’s former, President Ali Hassan Mwinyi. “We want Zanzibar to be a hub of shipments of cargo, make it a logistic center for the region.”

Made up of Unguja, Pemba and several small islands, Zanzibar accounts for about 6% of the gross domestic product of Tanzania, East Africa’s second-biggest economy. It has its own government and runs a separate budget, but has been pushing for a greater share of foreign loans and grants amid negotiations with the mainland over revenue-sharing from fossil fuels.

Damaged Coral

While the growth plan reflects the priorities of developing nations to secure its own power sources and thrive from trade and natural resources, it clashes with environmental concerns that are especially key to coastal areas and island states.

Zanzibar is directly affected by climate change with saltwater infiltrating areas including rice farms. It’s also threatening the local water supply, causing residents near the capital to suffer from headaches and nausea when no other water source is available, according to a United Nations Environment Programme report.

Coral reefs have been destroyed by people and the government is encouraging fishermen to move to other areas, Mwinyi said.

At the same time, Africa is not to blame for significant greenhouse-gas emissions, he said, and states like Zanzibar should be able to utilize natural resources to grow their economies.

“So if we happen to find this gas which we are going to find because all indications are there, we must use it for economic development,” Mwinyi said.

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Zimbabwe makes u-turn on mining royalties to halt currency slide https://africanminingmarket.com/zimbabwe-makes-u-turn-on-mining-royalties-to-halt-currency-slide/12433/ Fri, 04 Feb 2022 16:40:12 +0000 https://africanminingmarket.com/?p=12433 Zimbabwe News

Zimbabwe’s finance minister requested mining companies to pay up to half of their royalties in local currency, as part of measures to stem a decline in the unit that has been fanning inflation. The order reverses a 2020 decision requiring mining companies to pay the tax only in foreign currency. A similar rule has been imposed …]]>
Zimbabwe News

Zimbabwe’s finance minister requested mining companies to pay up to half of their royalties in local currency, as part of measures to stem a decline in the unit that has been fanning inflation.

The order reverses a 2020 decision requiring mining companies to pay the tax only in foreign currency.

A similar rule has been imposed on taxes and duties levied on imported vehicles, while taxes due from exporters are now payable in both foreign and local currencies in proportion to approved retention levels, Finance Minister Mthuli Ncube said in a statement posted on his Twitter account Friday.

“These measures reflect government’s commitment to promote the wider use of the Zimbabwean dollar and to continuously strengthen the economy so as to build lasting macro-economic stability,” he said.

The Zimbabwean dollar has weakened 6.8% this year to 116.65 per dollar, after losing almost a quarter of its value last year, and changes hands at more than twice that rate on the streets of the capital, Harare.

The decline has fueled inflation which quickened to more than 60% in January, from 54% in October.

The policy change comes days after the central bank agreed with business leaders that it would “continue fighting inflation through restrictive monetary policy and building foreign exchange reserves as a way of augmenting the defense of the value of the local currency.”

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Where a US$5 billion green incentive runs into politics of coal https://africanminingmarket.com/where-a-usd-5-billion-green-incentive-runs-into-politics-of-coal/11707/ Mon, 18 Oct 2021 09:41:14 +0000 https://africanminingmarket.com/?p=11707 Saleable Coal

The world’s richest countries are courting South Africa as a model of how to transition to a more climate-friendly future from a dependency on coal. While US$5 billion of cheap loans and grants are on offer as a first step, transforming Africa’s most industrialized economy demands more than cash. It needs to win over power …]]>
Saleable Coal

The world’s richest countries are courting South Africa as a model of how to transition to a more climate-friendly future from a dependency on coal.

While US$5 billion of cheap loans and grants are on offer as a first step, transforming Africa’s most industrialized economy demands more than cash. It needs to win over power brokers like Gwede Mantashe, a former coal unionist who is now energy minister and chairman of the ruling African National Congress, to weaken the nation’s reliance on the black rock.

A leading member of the South African Communist Party who also completed his MBA this year, Mantashe has made it clear saving the planet isn’t his highest priority.

Envoys from nations including the U.S., Britain and Germany met government ministers in Pretoria last month with the US$5 billion package to hammer out a deal that could be announced at the upcoming COP26 global climate conference on ending the use of coal . But Mantashe didn’t turn up. The 66-year-old was hundreds of miles away, addressing a mining investment conference and arguing against attempts to curb use of the country’s massive coal resources. Instead, he called for investing in experimental technologies to cut emissions from coal.

He’s hardly an outlier. Coal, mainly mined in the eastern province of Mpumalanga, has underwritten the system of political patronage and Black economic empowerment that has kept the ANC in power since the end of apartheid.

“We industrialized on the back of coal,” said Jesse Burton, a Cape Town-based senior associate at climate-research group E3G. “Coal is the backbone of our economy,” she said, while noting it’s no longer the cheapest form of energy.

The fuel supplies 82% of South Africa’s power, and businesses that rely on energy sourced from coal account for 45% of employment and 70% of exports, according to Roger Baxter, chief executive officer of Minerals Council South Africa, which represents most mining companies. Coal-trucking firms alone, many of them Black-owned, employ 5,000 people. Black shareholders now own a third of the companies that supply coal to state-owned power monopoly Eskom Holdings SOC Ltd.

Which helps explain why the politics are so potentially explosive.

President Cyril Ramaphosa, who co-founded the National Union of Mineworkers in the 1980s, has set up a powerful commission to guide the country toward lower emissions and more renewable energy. But he also relies on Mantashe, a bulwark against his rivals in the six-member group that runs the ANC.

“He is Ramaphosa’s only ally in the top six. The rest have all got knives out,” said Burton. “If the dependency of the ANC on coal mining rents is as great as everyone believes it to be, you need someone like Mantashe to manage it.”

That means maintaining support of the unions. Eskom employs more than 42,000 people, many of them at its 15 coal-fired plants; coal mines provide jobs for almost 90,000.

The unions backed Ramaphosa in his ascendancy to the top of the ANC and remain on his side, which gives Mantashe even more leverage.

“He knows the levers he controls,” said Ralph Mathekga, an independent political analyst and author of books about the ANC. “That’s why he has the audacity to press his agenda. Look at how one man’s energy view is holding back the president’s agenda on energy.”

Mantashe challenges such a characterization, saying he shares climate activists’ ultimate objective.

“In South Africa, there is no one who argues against moving from high-carbon emissions to low-carbon emissions, including coal companies,” Mantashe said in an interview. “Where there is a debate, is navigating through the transition. We must navigate it carefully without hurting ourselves.”

As for skipping the Sept. 28 meeting with climate envoys, Mantashe said it didn’t directly involve his portfolio. “It was not a beauty contest among ministers,” he said.

Mantashe said he backs technology that can mitigate coal emissions and is pushing for the development of the nation’s gas fields.

Tyrone Seale, acting spokesman for Ramaphosa, cited the president’s views in the Oct. 11 edition of a weekly letter to the nation. He spoke of the dangers of climate change and the need to cut emissions and win aid. He warned that if South Africa’s doesn’t reduce its reliance on fossil fuels, it may face difficulties exporting its products.

Weaning South Africa off coal is seen as critical, as is providing a model to other developing nations as the urgency of transitioning to greener energy mounts.

Remodeling South Africa’s power industry would be cheaper than in other coal-dependent nations since many of the country’s coal-fired plants are nearing the end of their life. Civil- society groups and the government have also been researching how to cushion the impact of those closures on coal-dependent communities for a number of years and opposition to coal on environmental grounds has been growing.

“Because the closures are coming already, that provides an opening and a space to have this conversation, to think about planning, what you can do,” said Burton.

Wherever it goes, the energy transition would likely get tangled up in the web of patronage and political influence that dominated the era of so-called state capture under ex-President Jacob Zuma, who was ousted in 2018.

A probe by the government’s Special Investigating Unit into Eskom’s coal-buying practices showed that a coal shortage that started in 2007 was self-inflicted and led to a proliferation of small supply deals. The result: Coal costs rose, quality fell and tender procedures were flouted, it said.

In 2015, Hitachi Ltd. agreed to pay $19 million to settle U.S. Securities and Exchange Commission charges that it made “improper payments” to South Africa’s ruling party to help it win contracts in the construction of coal-fired power plants. That same year, then Energy Minister Mosebenzi Zwane intervened to secure the sale of coal mines that supplied Eskom to a company controlled by the politically linked Gupta family and Zuma’s son Duduzane.

Eskom said law-enforcement agencies are investigating its coal contracts and one has been canceled as a result.

While not all the coal deals are tainted by corruption, the industry is nevertheless deeply entwined with politics.

Mike Teke, CEO of Seriti Resources Holdings Ltd., which supplies 32% of Eskom’s coal, said he gave Ramaphosa’s 2017 campaign for the ANC presidency 600,000 rand ($40,000) as he, and other business leaders, supported the president against a rival backed by Zuma.

One of Seriti’s biggest shareholders, Thebe Investment Corp., was established in 1992 by a company whose chairman was Nelson Mandela. Former ANC Finance Minister Nhlanhla Nene sits on its board.

“Many of the companies associated with the coal-mining industry in South Africa have significant influence within the ANC,” Shridaran Pillay, Africa director at risk advisory service Eurasia Group. “The downstream industries supported by mining play a role supporting regional political elites.”

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South African emergency power plan hit by new graft allegations https://africanminingmarket.com/south-african-emergency-power-plan-hit-by-new-graft-allegations/11641/ Wed, 13 Oct 2021 08:48:34 +0000 https://africanminingmarket.com/?p=11641 South Africa Flag

DNG Energy Ltd., a losing bidder for state contracts to supply emergency power in South Africa, made fresh corruption allegations against a winning bidder, Karpowership, and a government official. In an Oct. 12 supplementary affidavit to court papers, the first of which were filed in April, South Africa-based DNG alleged that businessmen who are now partnering …]]>
South Africa Flag

DNG Energy Ltd., a losing bidder for state contracts to supply emergency power in South Africa, made fresh corruption allegations against a winning bidder, Karpowership, and a government official.

In an Oct. 12 supplementary affidavit to court papers, the first of which were filed in April, South Africa-based DNG alleged that businessmen who are now partnering Turkey’s Karpowership approached the firm’s chief executive officer seeking a bribe. In exchange, they would ensure that DNG won a contract, Aldworth Mbalati, the CEO of DNG, said in the papers, adding that he spurned their offer.

“It is clear that even at a rudimentary level that some sort of agreement was entered into between the fifth respondent,” Karpowership, and the businessmen, he said. That was “in return for a stake in the fifth respondent, as was the proposal to DNG, which I declined.”

Powergroup SA Ltd., Karpowership’s local partners, and Karpowership denied the allegations.

DNG’s case, along with environmental challenges, has made the plan to secure 2,000 megawatts of emergency power by August next year unlikely. The deadline for financial close of the projects, initially set for July 31, has been extended until the end of January and DNG’s case will be heard at the end of November.

That means relief from intermittent power outages that plague South Africa will be delayed.

Karpowership, a Turkish company that operates gas-fired plants from ships, won the bulk of the government contracts. Other successful bidders include Scatec ASA and Electricite de France SA.

Mbalati made earlier allegations against energy department officials, saying they attempted to secure a bribe for him in return for helping him secure a contract. Those allegations were denied and the Independent Power Producer Procurement Programme said DNG was disqualified because its bids fell short of requirements.

Mbalati, in his Oct. 12 statement, also questioned how a Department of Mineral Resources and Energy official could afford the assets he owns on his salary.

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