There were fewer miners at the Mining Indaba this year and more mining service companies to make up the numbers among 7,000 delegates. Everyone is trying to cut costs as commodity prices tumble.
“It’s been a lot quieter this year,” admits one of the organizers.
“The investors are there, but the group is getting smaller and smaller,” says one delegate who asked not to be named.
“I think the opportunities are like the gold rush of 1849 in America,” says Robin Saunders, the head of Clearbrook Capital, an investment company looking to sink billions into African mining on behalf of rich families in Europe and the Middle East.
There were plenty of strident young mining nations from across Africa selling their minerals. This optimism couldn’t disguise the pain of the hosts; decades of battering and disinvestment leaves South Africa, where once 40% of the world’s mining was carried out, struggling to cling onto 5%, according to KPMG.
Investors are fighting shy of South Africa because of three big problems: power, rather the lack of it, strikes and fears over regulation.
The power shortages that have plagued most mines in South Africa has cost Harmony – the country’s third largest producer – 50 kilograms of gold in the last quarter to December 31, worth around $1.87 million, according to CEO Graham Briggs. It meant production at Harmony fell 10%, in the last quarter of 2014, to 271,963 oz.
“What happens is we have communication from Eskom that we have to cut our consumption by 10% or sometimes as much as 20%. This means we have to stop milling and hoisting, which impacts on our production,” says Briggs.
Like most large South African mines, Harmony is in a cleft stick. It consumes 2,600MW at its South African operations – enough to power a city and more than half the output of a large coal-fired power station. This means, like most mines in South Africa, it can’t risk the capital to build a generator or power plant large enough for its needs.
South African mining minister, Ngoako Ramatlhodi, just over a year into the job, sees himself as riding to the rescue. Even so, he brushed over the glaring power problem; merely talking about private power producers and getting power from the Grand Inga dam, in the Democratic Republic of Congo, in 2023. It could have been 2093 for all the difference it makes to the mines.
Ramatlhodi’s speech was full of reassuring words for foreign investors: the rule of law was to be respected; the government was prepared to get tough on violent wildcat strikes and the country was open for business.
He wasn’t so clear cut on the regulation front. There was plenty of confusion over the amendments to the Minerals and Petroleum and Resources Development Act – the law that governs mining that is going back and forth through Parliament. President Jacob Zuma sent the amendments back saying they were unconstitutional.
One of the bones of contention is the proposal of so called developmental pricing – that is, lower prices for commodities like iron ore and coal to help stimulate the South African economy. A year ago the miners negotiated so called ‘mine gate prices’ similar to import parity pricing, where transport costs are taken into consideration, leaving the producer with a fair profit margin.
The problem is there is a strong voice within the ruling party for developmental pricing to be written into law. If so, the minister could be handed the power to declare minerals strategic; meaning miners would have to accept government prices and have to ask state permission to export. It could bring down the price of coal for Eskom, with it the cost of electricity, which is likely to be popular with voters.
But among foreign investors it is likely to go down like a lead balloon laden with ten tons of coal. They are likely to see it as the state tinkering with the economy, laced with uncertainty, at a time when investors are looking for long term stability.
“It doesn’t feel like we are getting clarity,” says Wickus Botha, a mining analyst with EY.
“How long is it going to take to get these regulations through Parliament? It is not going to happen overnight. For the next two years it is going to be very difficult.”
In many other countries in Africa, these fears are far away. Many miners are making hay from Abidjan to Maputo as the hunt for investors overcomes shortcomings in infrastructure and financial systems.
One of them is Mark Bristow, the CEO of Randgold Resources, who has spent 20 years building mines everywhere from Mali to the Democratic Republic of Congo. His company’s results, released at the Mining Indaba, shows this penchant for the byways of African mining is paying off. In its Q4 figures, the company recorded record year-on-year production, up 26%, to 1,147,414oz in a company that is debt free and has paid a dividend at a time when the gold price is falling and most mining companies have forgotten what a dividend is. Bristow says his company is making a 20% real return on investment and is looking to invest in South Sudan and Kenya.
“Risk is in the eye of the beholder, as long as you have a good relationship with the stakeholders it is fine,” he says.
Elsewhere, Côte d’Ivoire, famous for agriculture, has a golden dream. The West African nation plans to open a gold mine every year for the next five years as part of its economic diversification, according to mining minister Jean-Claude Brou.
Gold mining in Cote d’Ivoire has grown rapidly in five years. In 2009, the country produced seven tons of gold; in 2014, it mined 18.6 tons. The country plans to increase production to 30 tons in the next five years.
“That is a very conservative target,” says Brou.
One last cautionary tale for African mining; there was a lot of talk about the increased mining royalties in Zambia and Zimbabwe and the threat they pose to investment.
From the gloom came a voice of sweet moderation from Ghana. The West African nation mined 4.4 million oz of gold in 2014 earning 40% of the country’s foreign currency.
In 2006, Ghana imposed a 5% royalty and mining minister Nii Osah Mills says his country plans to keep it at that rate for at least another 10 years.
“We were thinking recently of increasing the royalty, but we decided against it because we felt it would be disruptive to mining. So, no one is fleeing Ghana and that is a vote for us,” says Mills.
A dash of pragmatism that could help Ghana keep its place as the world’s 9th largest gold producer.
Oliver Mtukudzi The Soldier With A Big Voice – Yvonne Chaka Chaka
In January, Africa lost Oliver Mtukudzi. His friend and fellow musician Yvonne Chaka Chaka fondly remembers the global icon.
In October 2012, Zimbabwe’s Oliver Mtukudzi, South Africa’s Yvonne Chaka Chaka and Kenya’s Suzanna Owíyo produced Because I Am Girl with musicians from around the world.
It was released to promote the global launch of Plan International’s ‘Because I am A Girl’ campaign, marking the first UN International Day of the Girl Child, on October 11.
Dressed in African prints, they sang together, spreading the word about the empowerment of the girl child.
Mtukudzi’s bass and Chaka Chaka’s soulful voice in harmony, they became more than co-artists; they become brother and sister. It was the first performance of many for the two.
Seven years on, Chaka Chaka is teary-eyed about Mtukudzi’s death 23 days into 2019, when not just she, but Africa lost a music legend.
In a strange coincidence, Mtukudzi died the same day the continent lost the father of South African jazz, Hugh Masekela, last year.
On the phone for this interview, Chaka Chaka describes Mtukudzi as a soldier at work.
“When he was on stage, he was a totally different man. When he had his guitar, it was like a soldier. Like a soldier who has a gun at work,” she tells us.
“I think there were two different people. Offstage, he was just an ordinary man, and on stage, people ate out of the palm of his hand.
“I’ve never known Oliver to never be fit. He has been a skinny man and he would just twist that body with a guitar and that gravel voice of his. A big voice in a small body,” she says.
“He has never called me Yvonne, he has always called me Fifi… Fifi means sister.
“The man was always humble, he never raised his voice, I have never seen him angry and all he has ever wanted is just to see Africa thriving. He wanted to see Africa beautiful. He wanted to see Africa with less disease, less hunger, less corruption, a happy Africa – that was his wish.”
One anecdote Chaka Chaka shares is when Mtukudzi was made a UNICEF Goodwill Ambassador in Zimbabwe in 2011.
“You know he sat there with me and asked, ‘so, what does this entail, my sister? You have been a goodwill ambassador for a long time. You will tell me what needs to be done. How should I act? How should I react? How should I do things?’
“And I’m like, ‘no, but you know, you are more of a star than me and you have been in this industry long before I’. He was just so down-to-earth and had no chip on his shoulder.”
The last performance the two did together was in October last year in Harare during the Jacaranda Festival, attended by more than 2,000 people and other artists around the continent.
“Oliver was not in his changing room or at home. He stayed there and watched other artists perform, which was so great,” says Chaka Chaka.
“This year, he promised that we would do it [the Jacaranda Festival] in Bulawayo,” she said. They had planned to make it a big show and use their status as goodwill ambassadors to encourage and inspire more youth.
But sadly, that promise will never be fulfilled.
“The legacy he will leave behind is a legacy of love, the legacy of pro-African and I think for me he was a pan-Africanist. That’s what he was,” she says.
READ MORE | Zimbabwe’s Oliver Mtukudzi Dies At 66
To this day, Neria is still one of Chaka Chaka’s favorite songs by him.
Mtukudzi, who died aged 66 of diabetes, was laid to rest on January 27 in his home village of Madziwa.
Thousands sang and danced to the melodies of his songs.
President Emmerson Mnangagwa declared him a national hero, posthumously, a status that has previously been reserved for ruling party elite and independence veterans.
He may be gone but his music will live forever in the hearts of the fans that loved this legend who soldiered on until the end.
What A Failed Johannesburg Project Tells Us About Mega Cities In Africa
Six years ago a major development was announced in South Africa. Billed as a game changer, it was meant to alter the urban footprint of Johannesburg, Africa’s richest city, forever.
The Modderfontein New City project was launched amid much fanfare, expectation and media hype.
Zendai, a Chinese developer, bought a 1600-hectare site north-east of Johannesburg for the development, which it quickly dubbed as the “New York of Africa”. Early plans showed it was to include 55,000 housing units, 1,468,000 m2 of office space and all the necessary amenities for urban life in the form of a single large-scale urban district. The cost estimate was set at R84 billion.
The developers believed that Modderfontein could function as a global business hub and would become Johannesburg’s main commercial center, replacing Sandton. The project would also change Johannesburg’s international profile by strengthening relations with Asian corporate interests.
But, despite the release of futuristic computer-generated images which led to significant publicity for the project, it was never built. Instead, the land was eventually sold off. Another developer has since begun construction on a much more scaled down project, in the form of a gated-community style housing development.
Modderfontein has faded away from the public consciousness. The story of why it failed has never been adequately told in the media.
Our research, which took place over the course of several years, sought to understand the factors which led to the project’s demise. We also wanted to find out how Modderfontein’s failure relates to the broader African urban context.
We found that the project was hindered by conflicting visions between the developer and the City of Johannesburg. Moreover, unexpectedly low demand for both housing and office space meant the original plan for the project was incompatible with the city’s real estate market.
The project’s trajectory also shows how African “edge-city” developments, which are generally elite-driven and marketed as “eco-friendly” or “smart”, can be influenced by a strong local government with the means and willingness to shape development.
Zendai’s aspirations to produce a high-end, mixed-used development did not fit with the City of Johannesburg’s approach. Rather than a luxurious global hub, the city wanted a more inclusive development – one which reflected the principles outlined in its 2014 Spatial Development Framework.
At the heart of the framework is the desire to reshape a trend that saw capital leave the old central business district for affluent Sandton at the dawn of democracy in 1994. This was accompanied by an upsurge in securitised suburbs further north towards Pretoria, the country’s capital city.
These spatial trends were incompatible with the ideals of South Africa’s new democratic government and its strategy to mitigate the effects of apartheid-era planning. During apartheid, black people were prohibited from living in more affluent areas, which were reserved for the minority white population. Instead, they were forced into sprawling “townships” on the periphery of cities, far from work and economic opportunities.
To this end, the city demanded that Zendai include at least 5 000 affordable homes in its plans. It also wanted to ensure that the development was compatible with, and complemented, Johanneburg’s public transport system. The city was willing to contribute funding for the necessary infrastructure and inclusive housing.
Yet Zendai remained steadfast in its commitment to its vision, eventually deciding against fully integrating the city’s wishes into its planning application. This saw the city draw-out the planning process.
Meanwhile, problems were mounting for Zendai. The owner, Dai Zhikang, was eventually forced to sell his stake in the project to the China Orient Asset Management Company. Rather than continuing with the project, the asset managers sold the land to the company behind the new housing development on the site.
Smart cities in Africa
Over the last decade, a variety of developments like Modderfontein, including Eko-Atlantic in Nigeria, New Cairo in Egypt, and Konza Technology City in Kenya, have been touted by both public and private sectors as panaceas for Africa’s urban problems. The thinking is that as the developments are disconnected from the existing urban landscape, they won’t be burdened by crime or informality. However, these projects can take badly needed resources away from the marginalised areas of the city.
To make them more palatable to domestic and international audiences, the developments are usually marketed as “smart” or “eco-friendly”.
But these developments can fail at the point of implementation. This is because, as speculative projects, they generally don’t recognise the need to fit in with the wishes of the local authorities or adapt to the existing city. In the case of Modderfontein, the city government had the capability to push back against the developers and, in the
-Ricardo Reboredo; PhD Candidate in Geography, Trinity College Dublin
-Frances Brill; Research
4 Ways To Develop Employment-Ready Graduates
Chris Pilgrim, the new CEO of Transnational Academic Group West Africa and Lancaster University Ghana, on the potential game-changers in higher education on the continent.
It is to a verdant academic campus in Ghana that Chris Pilgrim will be packing his bags from the dunes of Dubai. As the new CEO of Transnational Academic Group (TAG) West Africa and Lancaster University Ghana, Pilgrim will provide students across emerging markets access to post-secondary and executive education.
TAG currently owns and operates Lancaster University’s campus in Ghana, Curtin University’s Dubai campus, and South Africa-based ABN Training in partnership with the Australian Institute of Management in Western Australia.
Pilgrim, who has helped develop TAG’s expansion in Africa and has over 25 years of experience in the higher education sector, spoke to FORBES AFRICA about skills-building, STEM and job creation:
1. Are more universities looking to set up here?
A. With over half a million African students studying abroad annually, the continent has the highest outbound student ratio (number of outbound tertiary students/total number of tertiary students) in the world. Along with this annual migration of students comes capital flight, increased brain drain, and a hesitancy to build further world-class higher education capacity on the continent.
TAG partners with globally top-ranked universities to provide the highest quality of higher education in emerging market nations, thereby reversing, albeit modestly, the flow of students.
Our campus in Ghana, in partnership with Lancaster University (ranked sixth in the UK), provides world-class higher education capacity for West Africans, and it has seen students from other countries, including outside of Africa, take up enrolment.
TAG’s Lancaster University Ghana is the only comprehensive UK university campus in mainland Africa, and while TAG is undertaking steps to open similar branch campuses in other African countries, other investors and top-ranked universities have not moved to open campuses in the region.
2. How can Africa build skills, capacity and create more jobs?
A. While there has been a modest growth of employment in the formal job sector in some countries, many of Africa’s youth are more likely today to take up work in the informal sectors and in family enterprises.
Africa, as a region, has the largest youth population in the world, and with over 11 million young people expected to enter the job market each year, its economies are stretched to productively absorb Africa’s greatest asset – this youth population.
While the continent’s education capacities and output are integral to leveraging this youth population into a potential demographic dividend, investments, both private and public, into relevant higher education capacities, particularly STEM (science, technology, engineering and maths) capacity, are limited.
In the long-term, addressing the underlying causes of unemployment and skills-gap lies in increasing enrolment in secondary and tertiary education, with a focus on STEM, thus enabling graduates to participate in the new economies and globalization emerging with the Fourth Industrial Revolution (4IR). Innovation, technology, and entrepreneurship are fundamental to creating the jobs of the future.
3. What is the increasing role of STEM programs?
A. While the vital importance of STEM education to infrastructure development, healthcare, energy security, agriculture, and the environment are well cited over the past decade, the role of STEM and digital skills in preparing for 4IR are potential game-changers.
African nations need to develop “future-ready curricula that encourage critical thinking, creativity and emotional intelligence as well as accelerate acquisition of digital and STEM skills to match the way people will work and collaborate in 4IR” (Source: WEF 2017 The Future of Jobs and Skills in Africa).
Lancaster University Ghana has been delivering relevant computer science curriculum since its inception, and is set to launch programs in engineering this year, followed by additional programs in STEM disciplines.
4. How are you creating future leaders?
A. TAG Ghana works closely with Lancaster University to assure that our students receive an education that is relevant both locally, and in the global context. We work closely with industry and the community to understand their needs so our graduates are employment-ready.
– Interviewed by Methil Renuka
30 Years And Still Grooving
African footballers are a wanted commodity but are not necessarily from the continent
The Million Dollar Game
Noëlla Coursaris Musunka The Trailblazer In The Congo
His Bosses Rejected His Idea. Then Hans Langer Became A Billionaire From His Plan For Giant 3D Printers
- Cover Story2 weeks ago
Businesses Of The Future: 20 New Wealth Creators On The African Continent
- Cover Story2 weeks ago
The Monk Of Business: Ylias Akbaraly Talks About Secret To Success And Plans To Take Africa With Him
- Current Affairs3 weeks ago
Botswana Offers Zimbabwe $600 Million Of Loans: Report
- Billionaires2 weeks ago
At 21, Kylie Jenner Becomes The Youngest Self-Made Billionaire Ever
- Brand Voice4 weeks ago
Rising Africa Series: Thought Leaders Africa
- Focus4 weeks ago
IN PICTURES | Is vaping really helping you quit traditional tobacco cigarettes?
- Cover Story3 weeks ago
A Solution To Improve Madagascar’s Local Economies
- Woman2 weeks ago
Naomi Campbell: Africa Is One Of The Leading Continents In The World