| January 12, 2010 Automakers plan for an electrified future, but plenty of hurdles remain Publisher: The Plain Dealer Author: Robert Schoenberger | |
| DETROIT -- The head of BYD Co.'s export division took the stage today at the North American International Auto Show and explained matter-of-factly how China's fourth-largest car company would become No. 1 globally by 2025: by building and selling lots of electric cars. "Electric vehicles have become a mainstream solution for mobility," Henry Li said. Like BYD, plenty of other car companies are also gearing up for an electrified future. But while electric vehicles show a lot of promise, there's a long way to go before they become widely available, affordable, reliable and able to meet consumer expectations. "Until the battery technologies get to the point where batteries are affordable, full-speed electrics are going to be expensive," said Curt Westlake, U.S. marketing director for Korea's CT&T, a company that hopes to sell low-speed electric vehicles in this country by the end of the year. Some of the world's largest car companies are promising electric vehicles and plug-in hybrids for sale within the next year or two. Still, many of the models on display today during a press preview of the Detroit show, which opens to the public Saturday, were either extremely expensive, highly impractical or both. Take the Tango, from Commuter Cars of Spokane, Wash. The two-passenger car looks something like a Chevrolet Aveo after an encounter with a trash compactor. Company founder and president Rick Woodbury said the plan is for consumers to buy the $150,000 car in three parts from different vendors and assemble it themselves -- a way to get around federal safety rules for cars. "It only takes a few hours," Woodbury said. "It's really easy." Myers Motors of Tallmadge, which is not represented at the Detroit show, makes a three-wheeled, single-seat electric vehicle called the NmG, for "no more gas." It plans to have a two-seat model, the DUO -- an acronym for Doesn't Use Oil -- on sale late this year for less than $30,000. The highest-profile electric is General Motors' Chevrolet Volt, a vehicle the company has promised will be available late this year for about $40,000, after a $7,500 federal tax credit. "We are doing a tremendous amount of preparation for this launch," Chevrolet General Manager Jim Campbell said in an interview. The Volt will be capable of driving 40 miles on electric power. When the battery runs low, a small gasoline engine will run the car's electric drive system and recharge the batteries. GM plans to produce about 25,000 Volts per year starting in 2011. Other more mainstream electric vehicles planned include Toyota's plug-in hybrids and battery-powered cars for 2012, and Ford's promised battery-powered Focus by 2012. Ford this week said it would spend $450 million to make battery packs in Michigan, a move that could bring 1,000 jobs to the United States from Mexico. But GM, Ford and Toyota are planning small production runs and limited sales efforts on their electric vehicles. The overwhelming majority of cars coming out of those companies for the next several years will be traditional gasoline-powered cars and trucks, said Erich Merkle, president of consulting firm Autoconomy.com. "They're testing the market," Merkle said. "You've got to have your foot in the water and be prepared for market-changing shifts. But they're not getting ready to shift large portions of their production capacity." Merkle said in the near term, expensive electric cars will appeal to niche customers -- tech fans who want to latest gadgets possible, environmentally minded shoppers willing to pay a huge premium to avoid emissions and commercial customers looking for low-speed vehicles to perform specific tasks. Companies are targeting more mainstream buyers, but Merkle said the prices are still too high to attract legions of buyers. Tesla Motors, the company that makes the $101,500 Roadster sports car, today showed off the latest version of its Model S, a family car it hopes to sell next year. After tax credits, the seven-seat Model S should cost just under $50,000 for the base model, about double the cost of the larger, gasoline-powered Chevrolet Traverse, also a seven-seater. CT&T's Westlake said commercial buyers have already turned to electric vehicles for many uses, such as moving people and equipment across large college campuses and theme parks. He said he believes there is a consumer market for low-speed, inexpensive electric cars, but he acknowledged that other electric car companies have yet to sell similar vehicles in large numbers. Still, there's BYD, the company that believes it will become No. 1 in China by 2015, mostly by selling more plug-in hybrids and electric cars. Li said that company has begun working with consultants to redesign its cars for more-stringent U.S. safety requirements, and he believes the products will be on sale here late this year. "We will be in this market with electric vehicles," Li said. BYD made similar statements last year and in 2008. -END- | |
| January 08, 2010 Cobalt hits highest for 14 months on new year demand surge Publisher: MinorMetals.com Author: Editing by Mark Shaw | |
| London, 08 January 2010 - Cobalt prices climbed to their highest levels since November 2008 in Europe on Friday, with the first full week of 2010 witnessing an upsurge in demand from end-users, traders said. High-grade 99.8 percent metal was quoted at $22.00/23.00 per pound, while 99.3 percent Russian metal stood at $21.00/22.00, both up some $2.00 from prevailing levels at the turn of the year. "There does seem to be an upturn in enquiries at the moment," one trader said. End-users had flocked back to a market that is perennially tight of metal, others said, with many producers unable to offer metal until early in the second quarter. China's Jinchuan has also upped its offer price to $25.50 per pound [from] $23.50. "This market is tighter than salt supplies in West Berkshire... we are looking at a price of $25 next week," another trader said. The move was also exacerbated by some speculative interest ahead of next month's futures contract debut on the LME. The LME will introduce its cobalt futures contract on February 22, just less than two months away. So far, the LME has approved brands from Vale Inco, Votorantim Metais Niquel, Sumitomo Metal Mining and Jinchuan Group for delivery against the contract. Prices are likely to advance further after the LME contract launch, traders said, because very little stock available will be available to be warranted in warehouses, resulting in the potential for technical tightness. "If you look at nickel, there are over 150,000 tonnes of stock, which would cost around $6.5 bullion to buy," the second trader said. "In cobalt, there won't be much more than 1,000 tonnes, which can be bought for $44 million - there are plenty of firms who could snap that up if they wanted to." | |
| December 11, 2009 How B.C. firm won 'greenest mine' rights Publisher: Globe and Mail Author: David Ebner | |
 To build a $140-million cobalt mine in a national forest in Idaho, tiny Vancouver junior miner Formation Metals Inc. (FCO-T2.16-0.03-1.37%) turned to the state's chief rainmaker, Cecil Andrus. Mr. Andrus was Idaho's longest-serving governor, a Democrat who was elected four times. Between two stays at the governor's mansion in Boise he was part of President Jimmy Carter's cabinet as secretary of the interior. During his years in office, Mr. Andrus was known for his environmental passion, and opposition to a proposed mine in the state helped get him elected in 1970 to his first term as governor. He was exactly the man needed by Formation Metals to help open an underground mine in a national forest in federally protected mountainous wilderness. The company wanted to unearth a metal used in turbines for jet engines and batteries, where demand could spike as electric cars become more common. It would be the only cobalt-focused mine in the United States. Now Formation Metals has cleared a major hurdle by passing a nearly decade-long environmental assessment completed by the U.S. government, which this week approved the company's plan of operation. Clearing trees from the site is set to begin in January and work on the main facilities is scheduled for spring, with the mine to open in 2011. The little-known Vancouver upstart had staked a cobalt claim on public land in the mid-1990s in Salmon-Challis National Forest. In 2001, the long process to obtain the required permits began. Though there had been mining in the region in the past, Formation Metals was still fighting through the paperwork in 2007, six years after it started, when chief executive officer Mari-Ann Green convinced Mr. Andrus that the cobalt mine made sense, environmentally and economically. Mr. Andrus, who joined the company's board of directors, went to work, trumpeting the merits of the mine to officials in Idaho, and especially at the Department of Agriculture in Washington, of which the Forest Service first reference is a part. "When you're dealing with the bureaucracy, it always helps to talk to the heads of the various departments, so they understand what you're trying to do," Mr. Andrus, 78, said in an interview from Boise Thursday. "It's easier to do that face to face, eyeball to eyeball, rather than in e-mails that go unread." Before the mine can be built, Formation Metals needs to close deals for debt and equity to finance the project; it officially began that process in November and hopes to conclude before year's end. The company has periodically raised chunks of cash in its two-decade history, including $20-million in 2007 and $9-million this year. The TSX-listed company has already sunk $50-million into the cobalt project and owns a metals refinery in Idaho. "There were some very hard days," Ms. Green said an interview Thursday. "We've gone without paycheques from time to time. When we set out, we set out to find our shareholders a mine and we've done that and we're going to bring that to fruition. We staked the mine at a time people weren't really looking for cobalt. It was difficult to raise money for it. Now everybody's talking rare-earth minerals and lithium and cobalt." Ms. Green was educated far from the mining business. She has a bachelor's degree in education from the University of Manitoba and worked as a school principal in that province, British Columbia and Alberta before moving to Calgary in the early 1980s to join the corporate world. She was hired in a do-everything role at small junior energy company and learned on the job. "I had an entrepreneurial streak," she said. In 1988, she and a trio of geoscientists started Formation Metals, which now has about 50 employees. Ms. Green met Mr. Andrus several years ago and sold the green politician on a mine that would bring jobs without destroying the land. Mr. Andrus was eventually convinced and in turn quelled opposition among environmentalists in the state with the promise of the "greenest mine in America." "He's a statesman," Ms. Green said. "He really helped us." The Idaho Conservation League last year withdrew a threat of a court challenge when Formation Metals said it would put up $30-million in reclamation bonds and spend $150,000 annually on watershed projects when the mine operates. The cobalt mine could product 1,525 tonnes of the high-purity metal annually for at least a decade, the company has said. The volume is about 3 per cent of global production and would be enough to supply more than 10 per cent of the demand in North America. The U.S. is the biggest user of cobalt. Cobalt reserves are most prevalent in Democratic Republic of the Congo and selling is dominated by mining giants Xstrata PLC and Glencore International. The U.S. wants to wean itself off foreign oil, but the same sentiment exists in cobalt, where the country is "captive" to Xstrata, Mr. Andrus said. Local politicians in the Lemhi County, home of the mine, have backed the project from the beginning. "It's good for the country, to produce something for a change," said Robert Cope, a county commissioner. "I'd like to see this country move away from a service-based economy back to manufacturing." | |
| November 03, 2009 Jinchuan raises cobalt prices by Rmb20,000/tonne Publisher: Metal-Pages | |
| BEIJING 03-Nov-09. Jinchuan Group, the number one cobalt metal producer in China, raised its website offer prices for cobalt metal yesterday, supported by the recent increase in overseas cobalt prices. The company is now quoting Rmb 370,000/tonne ($24.63/lb) for 99.8% cobalt metal, in comparison with its previous quotation of Rmb 350,000/tonne ($23.30/lb) which had been in place since 3 August 2009. The producer has also raised its offer price for the plate shaped cobalt to Rmb 368,500/tonne ($24.53/lb) from the previous Rmb 348,500/tonne ($23.20/lb) basis, also representing an increase of Rmb 20,000/tonne. Market sources reported that some Shanghai-based suppliers have already increased their offer prices for 99.8% cobalt metal to about Rmb 370/kg ($24.63/lb) recently, and players suggested that the rise in Jinchuan cobalt prices is likely to prompt a further increase in price from other domestic suppliers. -END- | |
| October 30, 2009 First Quantum must pay Congo $6 mln damages -court Publisher: Reuters Author: Joe Bavier | |
| * Court rules against First Quantum in contract dispute * Orders company to pay $6 million to Congolese defendants KINSHASA, Oct 30 (Reuters) - First Quantum Minerals (FM.TO) must pay Congo $6 million in damages over three failed lawsuits it filed against the government and state agencies after a mining project was cancelled, court documents showed on Friday. Democratic Republic of Congo cancelled the Canadian miner's $500 million Kingamyambo Musonoi Tailings (KMT) copper and cobalt project in August as part of a government review of 61 mining deals. On Aug. 26 and Sept. 3, KMT and Congo Minerals Development (CMD), a wholly owned subsidiary of First Quantum, filed three suits against Congo, state miner Gecamines and the mining regulatory agency, CAMI, in the country's highest civil court. In the decision, which was seen by Reuters on Friday, the court in Congo's capital, Kinshasa, upheld the government's cancellation of the project and ordered KMT and CMD to pay damages for filing the cases. "In consequence, (the court) orders each of the plaintiffs to pay the defendants the equivalant of $3 million in damages and interest," the decision, sent to Congo's President Joseph Kabila and Prime Minister Adolphe Muzito, read. KMT and CMD must also pay court costs, the decision added. Contacted by Reuters about the ruling, First Quantum's president Clive Newall declined to comment. But he said the company would release a statement on the matter. Earlier this month, First Quantum attempted to withdraw the suits and many analysts expect the company to move the dispute to a court of international arbitration to defend its investment. Under Congolese law, however, both the plaintiff and defendant must agree to drop a civil case and the government, CAMI, and Gecamines refused to withdraw from the legal action. First Quantum's KMT operation is so far the only major mining project to be cancelled by the review, set up to boost state revenues from deals signed mostly during the chaos of a 1998-2003 war and the transitional government that followed. Freeport-McMoRan's (FCX.N) giant Tenke Fungurume (TFM) mine, believed to hold the world's largest undeveloped copper and cobalt reserves, has so far failed to clear the review. Officials from the U.S.-based firm have continued to negotiate with the government, and a spokesperson for TFM said on Friday that the company was now waiting for a decision on the contract. -END- | |
| October 26, 2009 Congratulations to Winner of 8oz Silver! Author: Formation Capital Corporation | |
| Congratulations go out to Mr. Orval Barnes of Garibaldi Highlands, BC as the winner of 8oz of silver from Formation Capital's Sunshine Refinery. Mr. Barnes was in attendance at the "Money Talks All Star Trading Super Summit" at the Sheraton Vancouver Wall Center on October 24th where Formation Capital was an exhibitor. The Money Talks Trading Summit was hosted by Michael Campbell and featured expert speakers such as Victor Adair, Tyler Bollhorn, Jack Crooks, Dennis Gartman, Peter Grandich, Mark Leibovit, Steve Todd and Chris Lori. - END - | |
| October 23, 2009 Electric Cars Could Pose a Challenge to Rare Earth Supply in "Nightmare Scenario" Publisher: MetalMiner Author: Sturat Burns | |
| October 23rd, 2009 Dr Irving Mintzer principal of MEG LLC, an energy consulting firm, described a "nightmare scenario" at the Critical & Strategic Metals Summit in Washington DC this week. Driven not by cost advantage but by a combination of government incentives, legislation and taxation, Dr Mintzer painted a picture of a world in 2030 in which a third of the probable 72 million vehicles produced each year by that time are either fully electric or hybrid petrol/electric vehicles. Why is that a nightmare scenario you may ask? Surely that would be a quieter, cleaner altogether better world if the role of the internal combustion engine was reduced? Well indeed it would be a quieter, cleaner world, the nightmare element is the demand it would put on electric power generation and on production of certain key metals needed to make such vehicles. True 2030 is a quite a long way off. Twenty years is probably a reasonable timescale to design and build a smart grid capable of handling the power demands such a switch would make. It is also just about long enough to build the mix of nuclear and renewable energy sources that would be required to meet the power demands without increasing our carbon emission even more than they currently are. It would hopefully be long enough to improve renewable technologies sufficiently that they are economical without the subsidies they need now to achieve project funding. But metal demands look challenging; by Dr Mintzer's estimations at current Cobalt (Co) and Neodymium (Nd) content levels in a typical Lithium ion battery (everyone agrees there is enough Lithium, it's the minor metals needed for the cathodes and for the braking regeneration units that will be the challenge) it's hard to see where the metal will come from. In current cars some 5kgs of Co and 2 kgs of Nd are needed in every car. Even if improved technology reduced this to 0.5kgs of cobalt and 1 kg of Nd the world would need an additional 12,000 tons of cobalt and worse some 24,000 tons of Nd. According to an informative presentation given by David Weight of the Cobalt Development Institute, the world currently produces about 55,000 tons of cobalt and is broadly in supply/demand balance. Some 50% of supply comes from the politically unstable Democratic Republic of the Congo (DRC), the world's richest source of cobalt. The rest mostly comes as a by product of nickel and copper production and is hence somewhat price inelastic, meaning the primary economics of the mine are driven by nickel and copper demand not cobalt. Cobalt demand has risen at a steady 5.6% for the last ten years which if extrapolated forward would see demand in the region of 163,500 tons, before we add in additional demands for electric cars. Extrapolating figures back from a separate presentation given at the conference by Dudley Kingsnorth, Neodymium production is currently around 17,000 tons and typically represents about 16.3% of Rare Earth deposits. Pretty much all of it currently comes from China but several new potential mines were promoted at the conference, all looking for funding. In reality no more than two of these are likely to come to fruition with a probable production capacity of less than 30,000 tons, at the above Nd content guide that would yield just 5,000 tons of Nd, somewhat short of the additional 24,000 tons required. As Dudley Kingsnorth explained in a video interview on MetalMiner earlier today these Rare Earth mines and processing facilities take at least 10 years to go through environmental, feasibility and funding stages before a kg of metal is produced. In reality, Dr. Mintzer's scenario is unlikely to become reality but the above projections illustrate the dramatic effect a new technology can potentially have on metal demand when supply is finite. -- END - | |
| October 23, 2009 Growth in electric vehicle sector to boost demand for cobalt and neodymium Publisher: Metal-Pages.com | |
| WASHINGTON D.C. (Metal-Pages) 23-Oct-09. Demand for cobalt and neodymium is set to surge as automakers are expected to ramp up production of electric and hybrid vehicles, according to Dr Irving Mintzer, principal at Meg LLC. Based on a high demand scenario for vehicles powered by electric drive chains, Mintzer forecasted that additional demand for cobalt could double from current levels to 120,000 tonnes a year worldwide and 48,000 tonnes a year for neodymium by 2030. The rise in demand for cobalt will be twice the current overall rate of global production, he told the Managing Supply Chain Risks for Critical and Strategic Metals conference in Washington D.C. In the U.S. alone, Minzter forecasted that demand for cobalt could rise by an additional 25,000 tonnes a year and 10,000 tonnes for neodymium if demand for electric vehicles gathers pace in line with some analysts' projections. "Where in the world is the production going to increase rapidly enough to meet the additional levels in annual demand?" he said. "As we promote these technologies we need to think a little bit further ahead and look at what it means to lower dependence on imported oil from countries maybe considered unstable or unfriendly and increase our demand for these essential components." Under a low demand scenario for vehicles containing cobalt and neodymium components, Mintzer forecasted additional demand for cobalt to hit 12,000 tonnes a year and 24,000 tonnes a year for neodymium by 2030. The forecast comes as automakers produce more electric vehicles using materials such as samarium-cobalt and neodymium magnets for electric motors in hybrid cars such as the Toyota Prius, Honda Insight and Ford Foucs. Concerns over the dependence on foreign oil and environmental issues are expected to boost sales of hybrid and electric vehicles. With the U.S. government also now pledging funds to spur investment in cleaner and more efficient vehicles, cars containing electric drive chains could account for about one third of the U.S market by 2030, according to Mintzer. He also suggested that about one third of the 72 million vehicles sold worldwide could contain electric drive chains. Other industry participants believe the market penetration of electric and hybrid vehicles may be lower than some forecasts as the technology is slow to develop. Lux Resources has forecasted that electric and hybrid cars will only account for about 6 million vehicles of the total auto market by 2020. -END- | |
| October 08, 2009 Around 25 Congo mining deals risk cancellation Publisher: Reuters Author: Thomas Hubert | |
| * Projects at risk invole "second tier" assets * Tenke Fungurume negotiation deadline Oct. 12 KINSHASA, Oct 8 (Reuters) - Some 25 mining contracts in Congo involving "second tier" copper, diamond, and gold assets could be scrapped if companies fail to present the results of feasibility studies by a December dealine, the Ministry of Mines said on Thursday. "We will see if the studies were done. They will be able to present their reasons, and the cabinet will decide whether to extend (the deadline) or withdraw the permits. The goal is to have these assets in capable hands," Deputy Mines Minister Victor Kasongo told Reuters. Congo completed a review of 61 mining contracts in August as part of an effort to boost state revenues from agreements signed mostly during the chaos and corruption of a 1998-2003 war and the transitional government that followed. However, many companies that saw their partnerships approved by the review panel have yet to present required feasibility study results, Mines Minister Martin Kabwelulu told an investor conference in Kinshasa on Wednesday. "Certain partners started work without finalising their feasibility studies," he said. The companies were initially asked to present the results among documents submitted at the start of the long-delayed review process. But the government extended the deadline when it became clear that the majority of companies had not yet completed their studies. "Eleven companies were either in production or gave feasibility studies. The rest gave nothing. So far we've still received nothing, and we've asked," Kasongo said Thursday. He said around 25 projects in possession of what he described as "second tier assets" in the copper, diamond, and gold sectors were subject to the December deadline. He did not name the projects. Congo cancelled a copper and cobalt mining contract with Kingamyambo Musonoi Tailings, a unit of First Quantum (FM.TO) (FQM.L) in August on the grounds that it had failed to enter into commercial production within an agreed timeframe. Freeport McMoran (FCX.N) and Lundin Mining (LUN.TO), parnters in the giant Tenke Fungurume Mining copper and cobalt project, have been given until October 12 to complete negotiations with the government or risk losing their permit. But despite lingering doubts over the fate of the country's largest foreign-owned projects, analysts had expected completion of the review to boost investor confidence in Congo's high-risk but potentially lucrative mining sector. (Additional reporting by Joe Bavier in Lubumbashi, Congo; Editing by Richard Valdmanis). -END- | |
| September 18, 2009 AN ODE TO INSANITY - Farewell, Katanga Publisher: MineWeb Author: Barry Sergeant | |
| A mining veteran packs his bags, as jaws savagely tighten around the two biggest mining companies in the central African copperbelt. JOHANNESBURG - A mining veteran who has tried to crank up broken down vehicles more times than he cares to remember has decided to pack his bags, days after First Quantum announced that it had suspended work at the 65% complete US$600m Kolwezi tailings project, Katanga Province, Democratic Republic of the Congo. Katanga Province, which hosts some of the world's biggest and highest grade copper deposits (with cobalt as byproduct) employs a general prosecutor, who sealed Kolwezi tailings, an action described by First Quantum as "illegal". The insane move on Kolwezi tailings has been long in the making, and was no surprise to anyone familiar with the story. The mining veteran - let's call him Jim Bender - says "it's sad that the government is intent on self destruction by taking precipitous action to destroy the two best projects in Katanga". The other one, of course, is the biggest copper mine in the DRC, Tenke Fungurume, where Freeport-McMoRan operates and holds 58.8%; Lundin holds 24.8% and DRC parastatal Gécamines (La Générale des Carrières et des Mines) the balance of 17.5%. The first phase at the mine cost US$1.8bn to build, and produced its first copper cathode earlier this year. Bender continues: "To gain First Quantum as an investor is a major asset to any developing economy. It is a successful and also honest operator. Its anti corruption stand in the early days of the upsurge in activities is an example to all investors. First Quantum has a unique ability to think laterally and develop projects without outside help. The group's stock price reflects this success. First Quantum will rightly pursue this in the courts and win". First Quantum and Freeport McMoRan continued their mine builds in Katanga Province during the great copper price slump, which commenced in mid-2008. Tens of thousands of artisanal miners were driven out of work. Bigger formal companies ran into cash crunches and had to take drastic action, as seen in the cases of Metorex, Katanga Mining, and Anvil; some, such as Camec, suspended mining, and other such as Africo halted plans to start building mines. Today, metal prices are at healthy levels, and an air confidence is returning, but First Quantum and Freeport McMoRan are taking severe punishment of a different kind. There are heavy knock-ons: First Quantum points out that the sealing of Kolwezi tailings means the loss of 700 jobs in the Kolwezi area, loss of tax revenues to the DRC government, and an indefinite delay in commissioning of the Kolwezi Project, targeted for May 2010. Where First Quantum holds 65% of Kolwezi, Gécamines holds 12.5%, the Industrial Development Corporation (IDC) of South Africa 10%, the International Finance Corporation (IFC) 7.5%, and the government of the DRC, 5%. When commitments were made in November 2007 to proceed with the development of the Kolwezi tailings project, First Quantum, the IDC and IFC were left alone to raise finance or procure third party debt project financing for Kolwezi. This is tough countryside for any mining company, and any individual. After becoming one of the world's wealthiest outlying nations during colonial rule, the country descended after independence into one hellpit after another. After the so-called second Congo war, from 1998 through 2003, peace accords assisted in ushering in a rush of foreign private capital aimed at recapitalising the wreckage of so many copper mines, rotting under the hellfroth of greed. Intermittent fighting continues to this day, mainly in the remote northeast of the country, where AngloGold Ashanti and Moto Goldmines hold valuable gold concessions and deposits that have not been mined for decades. AngloGold Ashanti and Randgold Resources recently agreed a joint venture deal to buy Moto Goldmines. To the south, Banro holds substantial gold concessions west of Bukavu, and wants to start building a mine at Twangiza. During the colonial era, Bukavu was known as the "African Riviera", and for very good reason as anyone who has been there would know. During the second Congo war, which saw more than 5m people prematurely meet their maker (outflanking the kill rate in the Second World War), mining continued, one way or another, down in Katanga Province, such is the richness of the ores. Given this week's events in and around Kolwezi tailings, Bender is worried that "the Tenke Fungurume story has not yet unfolded, but it could become the same thing on a larger scale. Frightening". There were strong rumours heard by Katanga insiders during April that Tenke Fungurume would be shuttered in six month's time, which is now not far away. First Quantum has deeper roots in this part of the world. First Quantum had acquired Bwana Mkubwa, on the Zambian side of the copperbelt, in 1996. The grand old man exhausted the last of its own ore reserves in mid-2002; those "reserves" in any event were poor quality tailings from previous operations. The mine had been worked on and off since its discovery in 1902. So tattered and torn was Bwana Mkubwa that First Quantum's acquisition was a straight commercial deal. The mine's state of dereliction and apparently hopeless future left it outside the mandate of the copper industry privatisation initiated by the Zambian government. First Quantum, headed to ore reserve starvation from when it bought Bwana Mkubwa, "rediscovered" Lonshi, just over the DRC border, in 2000. The small, rich, deposit had first been found by Belgian geologists in the 1930s, but had never been worked. First Quantum sunk the first modern drill holes into Lonshi in November 2000, and commissioned the US$25m mine just eight months later. Lonshi was the first greenfields copper mine built on the copperbelt in 33 years. First Quantum also built the next one, a very big one, Kansanshi, at a deposit known since 1899, in Zambia. But make no mistake, these were rotten times for the copper price. In 2002, Anglo American quit Zambia Copper Investments (ZCI) and its main interest, Konkola Copper Mines, at a cost of US$34m in addition to a US$353m write-off taken in 2001. The smart guys at First Quantum soldiered on. In mid-2006 I found myself bundu bashing with First Quantum, and it was on the road to Lonshi that I met Prince Marvelous. I was told that he had nine wives, but did not have time to meet them all. He would strike anyone as fearless, and keeping up with nine wives was evidence that he was fearless. His palace stood just off a dusty but solid laterite road just before the Lonshi border crossing. Prince Marvelous had every reason to be confident, standing as he was atop a gigantic unmined copper-cobalt deposit that could one day underpin his ascendancy to the throne of the King of Africa. He was standing on the Central African Copperbelt, which extends some 500km through Zambia and into the DRC's Katanga province. The belt is around 50km in width. The copperbelt hosts one of the world's greatest contiguous mineral deposits, and many decades ago, settlements like Ndola and Kitwe in Zambia, and Lubumbashi across the border, were among the wealthiest in the world. All the while, the 40-ton Volvo trucks went on, thundering down the road past the dreamy Prince Marvellous. The huge trucks ran "hot," with two drivers working consecutive 12 hour shifts, seven days a week, hauling ore 36km from Lonshi to Bwana Mkubwa. But if it was going to be much of a story, then it must mention that First Quantum acquired mining rights for Lonshi in 2000, but it was only in mid-January 2003 when First Quantum acquired inalienable rights under the new Congolese Mining Code. The formulation of the code, regarded as truly world class, was heavily sponsored by the World Bank. Those were the days, all right. Back in the present tense, Bender continues: "In all my time here I have not seen the government get involved in its responsibilities, such as building roads, providing electricity and water, and so on. The mining companies have to do all of this, as well as build their plants. The border, through which all of the thousands of trucks have to pass with construction inputs and the metal exports, is widely recognized as the most corrupt and obstructive in the world". Bender is referring, of course, to Kasumbalesa (sometimes "Kasile"), less than 100km south-south-east of the Katanga Province capital, Lubumbashi. In times gone by, Lubumbashi was connected by rail to the deep south, to Johannesburg, and on to Durban or Cape Town, or even Maputo. It was also connected via the Benguela system to the west to the port of Lobito in Angola. It is via the Katanga link that the Benguela system also connects east through exchanges in Zambia to further connections to Mozambique's port of Beira, and also Tanzania's Dar es Salaam, both on the Indian Ocean. Today, the Benguela rail system would cost tens of billions of dollars to build from scratch. Today, the railroads are frugal skeletons of a long forgotten glorious era. Today there is only Kasumbalesa, with its filth and grime and corruption and abject hopelessness, a tollgate into and out of hell, teeming with devils. "This is not an enabling environment", states Bender, "quite the contrary. My time in the DRC is drawing to a close. I shall remain in contact with the DRC as a consultant to a civils company". You may wonder where a somewhat disillusioned Bender is off to. Well, here it goes: "I am heading back to Zimbabwe where I hope to develop a gold mining business". And perhaps that says it all; hell comes in big packages, but some are smaller than others. Farewell, Katanga. -END- | |
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