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The East African : Jun 21st 2015
The EastAfrican 28 BUSINESS JUNE 20-26,2015 MININ G Fluorspar company in Kenya halts operations, lays off workers Seventy-five wo≥ke≥s to go; company seeks to sell o≠ 30,000 tonnes of fluo≥spa≥ By KENNEDY SENELWA Special Correspondent operations due to the weak global demand for fluorspar and the commodity’s depressed prices. The private mining firm based T in Kerio Valley near Eldoret town in western Kenya has laid off 75 workers as it tries to sell stock of 30,000 tonnes of fluorspar. Fluorspar is used in making steel, aluminum and refrigerant gases. The scaling down of opera- tions will affect about 120 transporters at the company as well. From 2013 to 2014, traditional benchmark prices for freight on board averaged $280 to $300 per tonne. Worldwide production China accounted for 64.2 per cent of global fluorspar production in 2013, followed by Mexico at 18.5 per cent, Mongolia at 5.2 per cent, South Africa at 2.7 per cent, Spain at 1.6 per cent, and the rest of the world 7.8 per cent. Kenya Fluorspar’s managing director Nico Spangenberg said the company’s revenue base is under pressure because of the fall in global demand and competition from new producers. “It is going to be a difficult year, probably resulting in an- A worker at the Kenya Flourspar Company. The company will lay off several employees. Picture: File other loss, but we are determined to sustain our position in “It’s going to be a tough year, probably resulting in another loss.” Nico Spangenberg, Kenya Fluorspar managing director the world market,” Mr Spangenberg said. Over the past two years, the company has exported 60,00070,000 tonnes of fluorspar annually. The firm has an installed capacity of 120,000-125,000 tonnes per annum. Between July 2013 and the end of December 2014, KFC paid a total of $635,000 to the Minis- he Kenya Fluorspar Company has suspended its processing try of Mining as royalties for fluorspar. The company recorded net losses in the two years. On May 11, Mining Cabinet Secretary Najib Balala appointed a task force chaired by Paul Nyamodi to review concerns by residents of Elgeyo Marakwet county in relation to fluorspar mining. “We view establishment of a task force as a welcome step in an ongoing process to help resolve both historical land compensation issues between the government and Kerio Valley residents that predate our operations,”’ said the company. The report from the task force, expected in 90 days, will among other things cover the issue of members of the local community not being compensated for the nearly 10,000 acres of land where the mining of fluorspar ore is ongoing. Discovery Fluorspar deposits in Kerio Valley were first discovered in 1967. The Fluorspar Company of Kenya (FCK) was established in 1971 by the Kenyan government to exploit the large-scale deposits. Technical, financial and market-related problems led to FCK going into receivership in 1979. Kenya Fluorspar, a wholly government-owned company, bought the assets and continued the operations. This led to an improvement in fluorspar production and long-term customer contracts. In 1996, the company was privatised under the terms of government reform policy, and entered into a 20-year lease with the government for 3,664 hectares. Tanzania, Mozambique to p≥oduce g≥aphite TANZANIA AND Mozambique are seeking to become graphite producers to meet the growing global demand for the commodity. Private firms from both countries are ei- ther exploring licensed tenements to quantify resources or moving projects with vast deposits to pre-production stage. Consulting firm Stormcrow Capital Ltd said the graphite market can handle at least 300,000 tonnes of new production by 2020. A tonne of high quality graphite is predicted to cost $6,175 in five years. Dominant player China has dominated global output, producing about 70 per cent of the world’s graphite, but this is expected to decrease as the country curtails production due to environmental concerns. Demand is being driven by increased use of graphite in the making of lithium-ion batteries, lubricants, steel, iron and brake linings among other items. Lithium-ion batteries are preferred for use in electric vehicles. Magnis Resources Ltd, Kibaran Resourc- es Ltd and IMX Resources Ltd operating in Tanzania, and Mozambique-based Syrah Resources Ltd, Metals of Africa Ltd and Triton Minerals Inc are set to produce the mineral. Kibaran Resources of Australia is car- rying out a feasibility study of the Epanko graphite project near Morogo town in Tanzania. Managing director Andrew Spinks said the project will provide an alternative long-term term supply of superior quality graphite. “The future growth in demand for ex- panded graphite is significant, given its electrical and thermal conductive properties for use in applications such as building products, fire retardants and military applications,” he said. Kibaran’s Mererani East graphite project in the northeast of Tanzania near Arusha also has commercial- ly viable graphite given recent metallurgical results. “Mererani provides significant sup- port and depth to the company’s ability to broaden its product supply base,” said Mr Spinks. Mozambique has issued an environmen- tal licence to develop the Balama graphite project to Australian Stock Exchange-listed Syrah Resources Ltd. Syrah’s managing director Talga Kumova said the licence will ensure that the Balama project will be operated to the highest environmental standards. “We have been working proactively with stakeholders. The awarding of the environment licence is the culmination of two years of community consultation, base line studies and environmental impact assessments,” Mr Kumova said. Kennedy Senelwa A natural gas processing plant. Picture: File Premier produces wolframite at tungsten project in Zimbabwe Premier African Minerals Ltd has produced the first coarse-grade wolframite concentrate at its flagship RHA tungsten project in Zimbabwe. “Following the achievement of this milestone, fine tuning and optimisation is ongoing. We look forward to achieving first shipments in the near future,” said Premier CEO George Roach. In April, Zimbabwe granted permission to Premier to operate the RHA tungsten project by facilitating delivery to the site of the processing plant. The government gave permission after the Environmental Management Agency of Zimbabwe approved the project’s environmental-impact assessment. secto≥ ≥ound-up Simba signs agreement to sell Block 2A in northeastern Kenya Simba Energy Inc has signed an agreement to sell 60 per cent of its interest in onshore oil Block 2 A in northeastern Kenya. The Dubaibased firm is subsidiary of Essel Group India, whose current market capitalisation is $12 billion with interests in media, entertainment, packaging, infrastructure, precious metals and technology. The Essel Group, based in Mumbai is diversifying into the hydrocarbons sector by investming in Simba’s existing PSCs in Kenya, Chad and Guinea to earn 60 per cent participating interest. Simba CEO Robert Dinning said the company will develop its assets, including the completion of the seismic programme in Kenya. Australia’s Rift Valley now prospecting for gold in Tanzania Rift Valley Resources Ltd of Australia has begun prospecting in the Miyabi gold project in Tanzania. The Australian Stock Exchangelisted company will test mineralisation of the Dalafuma Northwest, Chui and Contact Zone prospects at Miyabi gold project located 200 kilometres south of Mwanza town. Rift Valley’s managing director Geoff Gilmour said the firm has resumed exploration after consolidating ownership of the exploration field. “Previous work led to the discovery of the Dalafuma prospect and a series of other resource targets,” he said. Solo confirms natural gas at Kiliwani, Ruvuma prospects Solo Oil has confirmed the presence of natural gas at its Kiliwani North Development License (KNDL) and Ruvuma petroleum sharing contract assets in Tanzania. A technical evaluation by Senergy (GB) Ltd found 44 billion cubic feet of gross mean gas at KNDL, where Solo holds a 6.5 per cent stake, and 153 billion cubic feet of gross mean resources at Ruvuma’s Ntorya-1 discovery. Senergy’s report attributed a total of 3 trillion cubic feet of gross mean gas at the Ntorya Updip, Namisange, Likonde Updip and Sudi prospects. Solo chairman Neil Ritson said an independent analysis of various Tanzanian assets had confirmed the presence of contingent gas resources in both Kiliwani North and Ntorya.
Jun 14th 2015
Jun 28th 2015