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The East African : Oct 3rd 2015
36 The EastAfrican BUSINESS OCTOBER 3-9,2015 MININ G Data in the natural resources game Mining has a lot of useful chaos — the means to shape that ≥esides in big data and the Inte≥net of Things By PEDRO GUERREIRO Special Correspondent one tied to numerous internal and external forces. This could be said for many business sectors, but mining’s particular financial girth makes it stand out. It’s an industry that generates capital so large it can determine the health of country GDPs — in 2014, the top 10 mining companies globally had shared revenues of nearly half a trillion dollars, and that was a bad year. PWC’s Mine 2014: Realigning M Expectations lays that volatility bare. Last year, the market capitalisation of the top 40 mining firms dropped by 23 per cent — an incredible $280 billion. What explains the drop? Fore- most is the pricing of commodities. Coal, gold, diamonds, platinum, cobalt, tin, bauxite... it’s a long list raw materials that all help manufacture the foundation of modern society. If mining stops, so too does the world. Mining is a strange business, where the longer you operate in a market, the harder it becomes to turn a profit. Mineral seams become tougher to reach, the quality of ore declines as a result, and more effort has to go into extracting true value. Mining is expensive: It manages an unwieldy family of assets, a protean workforce, shifting regulations and locations found in remote areas. It’s a picture of contradiction and chaos, an industrial Frankenstein. Mining has a lot of useful chaos — and the means to extract insights from that chaos resides in big data and the Internet of Things. The bedrock of this approach is how mining firms are able to establish real- ining is a challenging and forever evolving business, secto≥ ≥ound-up Tower closes its Kampala regional office, moves to West Africa Tower Resources Plc, which withdrew from exploring oil in Kenya this year, has closed its East Africa regional office in Uganda, from where activities in Kenya, Zambia, SADR (Western Sahara) and South Africa were co-ordinated. The closure comes as Towers shifts focus to the Atlantic Margin on the western shores of Africa. Tower chief executive Graeme Thomson said the firm will be selective in pursuing new ventures as outstanding opportunities still exist despite depressed oil prices. Tower had a 15 per cent stake in onshore block 2B with other partners having completed drilling Badada well to a depth of 3,500 metres. Reference guide launched for oil and gas industry in Tanzania Friedrich-Ebert-Stiftung (FES) Tanzania has launched an oil and gas reference guide. Wiki Platform, a joint intiative of FES, The Natural Resource Governance Institute and Berlinbased Open Oil is a repository of data in English and Swahili, targeting players in the oil and gas industry. time and day-to-day insights into their operations, discover efficiencies through automation, respond proactively to challenges on the ground, and manage value chains in new ways. Above all, it opens the door to building new business methodologies for the mining operations of tomorrow. One clear recipe for success is to find efficiencies in the supply chain. Mines move assets and commodities through a large web of suppliers and clients. Great benefits are being found when these interactions are automated and orchestrated through a single source-tosource supplier platform such as Ariba. Automated invoice, verifica- tion and billing systems enable mines to spot discrepancies as well as take advantage of earlypayment bonuses. Automated logistics also deliver efficiency, such as fine-tuning transportation loading with exact To reap real benefits from big data, requires a solution honed to the nuances of the sector quantities — something done with great success at Rio Tinto mines. By using Internet of Things platforms, sensors and predictive analytics can reduce time spent on the maintenance of assets. Breakdowns can be predicted and staff directed in realtime through mobile platforms to address failures. According to research, such solutions can reduce an operation’s annual maintenance costs by over 30 per cent. Sensors and big data can also ensure the optimal use of mining assets — not just on-site, but across the company’s entire ecosystem. Underperforming assets can be identified and allocated across the scope of all operations. However, not all big data so- lutions for mines are the same. To reap real benefits requires a solution honed to the nuances of the sector. Asset management is relatively straightforward, but workforce, and health and safety requirements are considerably less so. A truly robust technology platform for mines should include advanced human resource and regulatory features. This includes worker performance and training, ac- cess to appropriate safety documentation and the automation of any auditing requirements. New training methodologies that cater to a specific workforce can quell dissatisfaction, while reducing the labour required to deliver effective auditing results is a major cost saver. Automation also reduces the pressure to monitor and enhance reporting on emissions and other regulatory oversights. A technology solution must illuminate an operation’s financial character, providing tools and insights for managers. In such a volatile field as mining, the ability to understand both historical and forward-looking views of financial performance is invaluable. Above all, such a solution must be a single platform. This enables mines to unify their main moving parts, consolidate operations and gain a true highlevel overview of what the business is doing. Not all platforms are up to the task. It requires a focused and specialised solution to get the job done — from the point of view of both technology and the human support and expertise that makes it happen. Goldplat: Relocation of gold plant has to wait By KENNEDY SENELWA Special Correspondent GOLDPLAT PLC will not relocate its processing plant from Ghana to Kenya just yet after the Kenya Revenue Authority demanded it pay taxes on its machinery. The company intends to use the plant to double production at its Kilimapesa mine in western Kenya to 6,000 ounces of gold per year from 2016. Goldplat chairman Brian Moritz said the relocation and construction of the plant would cost Ksh122.4 million ($1.1 million). “KRA views the plant as subject to VAT and money earned from Kilimapesa opera- tions as liable to taxation. However, Goldplat argues it has not made a profit from the mine yet,” said a source. Goldplat finance director Ian Visagie said the tax claims are overstated and would affect the firm’s investment. Kilimapesa substantially increased gold sales to 2,073 ounces this year compared with 919 oz in the 2014 financial year. Goldplat has been holding discussions since April to secure a funding partner to upgrade Kilimapesa. The London Stock Exchange-listed com- pany has secured three portions of land. Two long-term leases were agreed upon to host the new CIL plant at Kilimapesa and another for the new underground shaft. A further $51.1 million was spent on the acquisition of 18.723 hectares of land, which will serve as a final tailings (processed mineral waste ore) deposition site for the proposed new plant facility. The firm wants to make the Kilimapesa operation profitable through an output of 6,000oz of gold but KRA insists Goldplat pay VAT for a processing facility to be imported. There is an exploration permit and a mining licence covering Kilimapesa Hill near Kilgoris. Mining is carried out using conventional, labour-intensive methods and the mineral ore is processed locally. Workers at a mine in Northern Province in Rwanda. Picture: Cyril Ndegeya Base agrees to talks over paying royalties higher than 2.5pc Base Resources Ltd has agreed to negotiate with Kenya’s Ministry of Mining over paying higher royalties on titanium, from the current 2.5 per cent. “Base is agreeable to increase paying royalty from current level. I cannot comment further on the acceptable rate because discussions are going,” said Base external affairs and development general manager Joe Schwarz. The government is expected to earn $300 million in taxes and royalty payments over the life of the 13 mines but Base is pursuing a tax refund of about $25 million arising from the building of the titanium processing plant. The guide will have oil block data, mining contracts, production and reserve figures. It covers legal and licensing frameworks as the objective is to help to reduce information asymmetries in natural resource contracting. Similar guides exist in Kenya, Uganda, South Sudan, Sudan, and Egypt. Rwanda to share revenue with communities around mining sites The Rwanda government will share five per cent of earnings from minerals with local communities living around 815 mining sites in the country. This follows President Paul Kagame’s comment at the Kwita Izina (gorilla naming) ceremony that natural resources should be a blessing and not a curse for the people. Mines Minister Evode Imena said the Ministry had contacted the Rwanda Development Board and other relevant organisations to ensure the policy of sharing minerals revenue is implemented immediately.
Sep 26th 2015
Oct 10th 2015