Burkina Faso, as the third biggest gold producer in West Africa, behind Ghana and Mali, does not get the recognition it deserves. In addition to gold, the nation is blessed with manganese and other rare earth metals, making it a premier destination for mining. With this in mind, it is not surprising that the government is in talks with mining companies to develop a world-class manganese mine.
Gold is Burkina Faso’s most valuable export, accounting for almost 80% of its income. But, the reliance on gold is waning, with focus turning to the exploration of other mineral deposits. A diverse base of minerals, especially with the discovery of manganese, will help ensure that Burkina Faso develops multiple revenue streams.
Considering that there was no industrial mining in Burkina Faso up to 2007, the sector’s rise shows what can be achieved in a relatively short space of time with government support and relative political stability. Companies that have an interest in setting up operations in the country include Canada’s Endeavour Mining and UK-listed mining company, Toro Gold, both of which are active players in the West African mining space. Another Canadian miner, Roxgold, is in the process of completing an IPO to develop a 95,000oz concession. Key to Burkina Faso’s success is the high grade of its gold.
Despite a rosy outlook, there are challenges. Power shortage is hampering the progress of projects and the Burkinabe government has started to construct a 33MW solar power plant to combat the problem. This approach will hopefully encourage investors.
In addition to Burkina Faso, Mali has historically had a vibrant mining sector with the country hosting many productive mines. Gold mined in the West African country last year produced 50 tons of gold, with production expected to surpass 60 tons by the end of next year. With both Burkina Faso and Mali having a degree of political stability, coupled with low taxes and other incentives, the region will no doubt attract investors who might have been sceptical about the region just a year ago.
As Nigeria aims to kick-start its mining sector, there have been significant developments. Canadian company, Thor Explorations, has taken steps to develop a 535,000oz resource and could become a leading player in Nigerian mining. As exploration and new discoveries in the region ramp up, unlocking the potential of the projects will depend on the ability to raise finance, but it has to be the right type of finance. Traditional financing often ostracizes smaller players and curtails smaller projects. Crowdfunding is a method that is gaining traction, especially in advanced mining countries such as Canada. Whether this method can be replicated in Africa remains to be seen but innovation – be it technological or financial – will be advantageous for local and international companies.
In the last couple of years, mining has started to attract the attention of boutique private equity firms. In some cases, financing for mining projects can be misplaced. Private equity traditionally takes a long-term view, with the objective of matching long-term capital with long-term projects. This year has seen an increase in global private equity mining deals, with many mining companies considering these deals as the best way to advance their projects and also provide strategic and managerial expertise.
The cyclical nature of mining means timing is crucial for investors. The price of gold has improved significantly but, with other base metals still performing at low levels, appetite is tempered. Due diligence on any project will determine the way forward but despite advancements in legislation, the perceived lack of transparency and bureaucracy associated with license acquisition deters investor confidence.

Crowd fund the mines

It’s a windy day in mid-September and a thick band of dust encircles northern Johannesburg. Perfect weather for flag-flying and Gauteng’s biggest is billowing at Flag Craft International, which exports flags to half of Africa.
Owner Tony Hampson-Tindale is amused by a question about South Africa’s tallest flagpole at the Donkin Reserve in Port Elizabeth, which stands at 45 meters, nearly 20 meters taller than his.
“They’re at sea level. Johannesburg is 1,753 meters above sea level so ours is higher!”
Heights are important to 66-year old Hampson-Tindale. He’s conquered the Seven Summits and in a few weeks is heading back to the Himalayas to climb Ama Dablam in eastern Nepal.
In 2010, he planted the flags of his native New Zealand and adoptive South Africa atop Everest and at the age of six was inspired when Edmund Hillary first did it; but to him flags are less about passion and more about business. He’s owned Flag Craft since 1984 and exports flags, windsocks and poles to 34 countries, mainly in Africa and the Middle East.
Clients include the African Union, to whom Hampson-Tindale has been supplying flags since OAU days. There are flags for conferences, bosberaads and political parties, not to mention windsocks for airports across the continent. Wind, sun and pollution are enemies of the flag: causing them to become brittle and fray. In blustery or smoggy areas, flags need replacing every six months.
On the factory floor, production staff are squeegeeing dye across screens, replicating onto woven polyester the familiar light blue, black and white of the Botswana flag – part of a big government order. Although workers here still do the silkscreen printing by hand, there’s little creativity about this job, says Hampson-Tindale.
“We are robots. We are given a specification by a country or a company and we do exactly that.”
Seamstress Roselia Sakong has been working here for 14 years, cutting, measuring and sewing flags destined to fly solemnly at military parades, be draped sadly over coffins, or waved enthusiastically at sports matches.
She says she has only one small desk flag stuck into a pot plant at home, but sewed the giant flag that flies outside her work. It’s her pride and joy.
“When I come to work by taxi from Soweto, I often point to it and tell people I made that.”
Among the company’s proudest moments was supplying thousands of flags for Nelson Mandela’s inauguration.
But Hampson-Tindale is not convinced all flag money is well spent. North Korea has the world’s third tallest flagpole at 160 meters, while the flag itself weighs 260 kilograms.
“Some governments will spend millions on flags even if their population is starving.”
Vexillologist Bruce Berry sees flags as the soul of a nation. Every morning, he raises a flag in his Johannesburg garden. One day it may be the fleur-de-lis of the flag of Quebec; the next, the red, yellow and green Ghanaian flag with its black star. There’s not much about flags Berry doesn’t know.
“Ghana was the first African country to adopt its own flag, apart from Ethiopia, which was never colonized.”
On his wife’s birthday, he flies the flag of her native Kenya. The Bendera ya Kenya is one of his favorites. There’s no mistaking the center shield and it’s a pleasing deviation from the red, black and green pan-Africanist colors.
As a child growing up in what was then Rhodesia, Berry says he was fixated with flags, but most people found his obsession curious.
When he was 10, he persuaded his father to buy him a pole, a base and a pulley and began flying flags in their garden: the old South African flag on his mother’s birthday, the Union Jack on his father’s and if they had house guests, he’d find an appropriate flag.
“We were the talk of Bulawayo,” says his sister Angela. “Every time anyone went overseas he’d ask whomever it was to bring him a flag. Eventually he had so many he had to store them in suitcases because there was no wall space left in his bedroom and my mother refused to let him hang them all over the house.”
In 1973, at the age of 12, Berry was relieved to read an article entitled: Flag-Wavers On The Increase.
“That’s when I first realized there was a name for people like me,” Berry says. “Vexillologists: ‘vexillum’ is Latin for standard and ‘ology’, the science of.”
Seventeen years later, Berry helped establish the Southern African Vexillological Association (SAVA).
One of SAVA’s first tasks was to help design a new national flag for South Africa. The primary theme had to be convergence and unification. The actual design was done by the state herald, Fred Brownell. Berry was part of the technical team.
“Usually the fewer colors in a flag the better. But this was a distinctive design because it had six primary colors. It was basically a compromise flag, with black, green and gold elements of the ANC, PAC and Inkatha [Freedom Party] and the red, white and blue of our colonial heritage.”
As the sun sets over Johannesburg, Berry respectfully lowers the flag of St David: a yellow cross on a black field. It’s been flying to honor his son, David, whose birthday it is.
“Flags are symbols of communication; they evoke emotions, be it a red cross, a swastika, or your national flag at half-mast&#8230; There’s no international law that says flags must be used, yet every country in the world has at least one. That is the power of flags.”

This Business  Is Not Flagging

It was early morning, the sun was blazing. Tommie van Zyl walks over to Wilson Mashola, one of the drivers at the farm, standing near the entrance of a warehouse, where thousands of tomatoes are being loaded onto a yellow truck. Tommie greets Mashola in his mother tongue, Khelobedu, the language of this part of Limpopo, in northern South Africa. The language is similar to northern-Sotho, seTswana and Tshivenda and it’s not easy to learn. The two hug and share a few jokes. Tommie turns to say that Mashola has been a driver on the family farm for 32 years.
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Tommie inherited this knack of communication from his father. In a country with 11 official languages, Tommie speaks three tongues of the people of Limpopo, as well as his mother tongue Afrikaans, and English. He’s a strange millionaire, dressed in a plain blue shirt, chinos and veldskoene—hardy shoes typically worn by South African farmers. At first glance you wouldn’t think Tommie is chief executive officer of this massive multi million rand tomato farm.
It was his choice, when he returned from studying in the States in 1986, to shun the khakis worn by many a farmer.
“I always ask what we can do to remain relevant. Some of them still wear it, but I felt in order to be one with the people, you need to change stereotypes about Afrikaans farmers,” he says.
Nestled in the valley of Mooketsi around 400km north of Johannesburg, the farm is the home of the ZZ2 brand. It’s famous across the continent for tomatoes—harvesting around 170,000 tons a year from 2,000 hectares (ha).
The name dates back to 1906 after the end of the war when farmers were compelled to get a registered number with which to brand their cattle. The authorities gave each of the van Zyl brothers a number from ZZ1 to ZZ4. ZZ2 was the brand of the second eldest brother Burt, grandfather to Bertie and great grandfather to Tommie—who used it as the trademark for what was to become the biggest tomato farm in the southern hemisphere.
Tommie’s father, Bertie, left school at 16 to take over the farm from his ailing father. In those days, the van Zyl’s had a mixed crop, mainly potatoes, and life was difficult. Bertie realized that his neighbor made more money from tomatoes than potatoes and convinced his father to change. The first crop was harvested four years later.
The climate in the Mooketsi valley was just right. Tomatoes flourished all year round and soon, the farm was rich. Over the years, the van Zyl’s diversified into avocados, onions, stone fruit and beef.
The company also has farms in Musina, Limpopo, near the border with Zimbabwe. They grow apples and pears in Ceres and Riebeek-West in the Western Cape as well as Langkloof in the Eastern Cape. Marketing manager Clive Garret says a new crop, is dates, farmed in Hakiesdoorn in the Karas region of southern Namibia. The company hopes to harvest their first crop of dates within the next year.
Bertus Venter, Production manager and agronomist at ZZ2, says dates are in high demand during the Islamic month of fasting, Ramadan, due to their high energy and nutritional properties. The climate in the southern hemisphere allows for the growing of fresh dates to be available during that holy month.
“As far as business growth is concerned, we’re constantly looking at how we should adapt our business. We benchmark ourselves against the best in the world and we will adapt our system to the well adapted to the environment we’re in. We’re firmly established in South Africa, but also where it makes economic sense in neighboring countries,” says Tommie.
It’s been a long road to the tomato millions for Tommie. While growing up, he started to learn the trade, though he says he didn’t walk into managing the company.
“I didn’t get the job because I was the son of the owner. My father was a very strict man and he didn’t want us to go to school.”
Bertie wanted Tommie to stop going to school after grade eight, but with the help of neighbors and uncles, he persuaded his father to allow him to study.
Tommie completed an undergraduate B.Comm degree in economics and agricultural economics at Stellenbosch University in the Western Cape. When he found he couldn’t play any other sport, he opted for boxing, gaining full sports colors while studying.
Following his completion of a postgraduate honors degree, he was awarded the Fulbright Scholarship to learn for a Master of Science in food and resource economics at the University of Florida, in the States. While there, he was also awarded membership to Gamma Sigma Delta, an international honor society dedicated to recognizing accomplishments of leaders in agriculture and the related sciences, at the very least he vindicated his neighbors and uncles.
On completion of his studies in 1986, Tommie returned to the family farm. He started off as a buying clerk in the purchasing office, expanding his responsibilities and started to farm a year later. At the age of 27, in 1992, he cut his teeth and became managing director for operations, property and investments.
“But we had a very interesting managing system. I had the title and the responsibility, but not necessarily at that time, the authority. I grew into authority and probably since 2001, we established proper governing structures that gave me full authority as chief executive officer, reporting to our board of directors, but since 1992, I had the title of chief executive officer,” he says.
The father of four took over the reins of the multi million rand conglomerate in 2005 after his father died. His son, Burtie, is following in the family footsteps, starting off as a junior project manager and coming through the ranks to his current position of general manager for the avocado plantations. One of Tommie’s twin daughters is studying genetics and horticulture and the other geography and environmental science; his eldest daughter is a jewelry designer.
When he is not farming, the 54-year-old enjoys reading books on philosophy, business and economics, and sometimes takes long walks through the countless rows of tomato fields.
The saying, never judge a book by its cover or a tomato by its skin, couldn’t be truer when Tommie suggests a helicopter flight over the farm. He jumps into the pilot seat and starts the rotor blades—a farmer of many talents. He obtained his private pilot’s license with night rating for an airplane and more recently a helicopter license. From the sky, the tomato and avocados look like neatly laid-out football fields.
From here, tomatoes are exported to Reunion, Dubai, Seychelles and Oman, while around 3,000 tons of avocados go to Europe. The rest of the produce is sold through the fresh markets in Johannesburg and Cape Town. Their biggest competitor is Azura in Morroco.
Around 20 trucks are on the road daily, transporting nearly 4,000 tons per week to a warehouse in Johannesburg, where they are divided and dispatched to various stores across the country, and to sellers. Tommie says hawkers are one of their biggest customers. They buy products cheaply in bulk and sell them on streets and small shops.
ZZ2 also has a commercial herd, consisting mainly of Pinzgauers, which roam on non-arable land, for the breeding of weaners on high-valued stud cattle. The farm is also involved in wildlife conservation with fenced conservancies measuring 23,721ha. The game includes white rhino, nyala, gemsbuck, red hartebeest, giraffe, impala, kudu, Burchell’s zebra and eland.
The livestock alone is worth R30 million ($3.3 million) and the game R8.5 million ($940,000).
In a time when many of the country’s mines are being lambasted of raking in huge profits at the expense of the people, ZZ2  built small villages for the workers and their families nearer to the farms.
Tommie says each farm has its own clinic as they are far away from the nearest hospital. They provide bus services for workers’ children to a nearby primary school and also support a farm school and 13 créche’s for around 300.
Each farm has its own vehicle workshop where the school buses and the trucks get serviced by professionals.
ZZ2 employs around 8,000 people in South Africa, of whom around 6,500 are based at the headquarters. The farm also employs people in neighboring countries from Zimbabwe and Mozambique, who carry out seasonal work.
With over 60,000ha—and counting—of farming land, ZZ2 turns over around R900,000 ($98,657) for tomatoes alone and nearly a R1.1 billion ($120 million) for the entire company. But the tomato farmer says this is humbling.
“When you think you’re king, you’re paw-paw, when you think you’re paw-paw, you’re king. I’m very intrigued by value in a broad sense. Money doesn’t really impress us. We’re impressed by the value of the things we produce and the meaning that we’re creating for many people,” says Tommie.
As the autumn sun sets over the farm, the workers pack their tools and dust off their boots, as one shift ends and a new one begins at the entrance of the warehouse. Looking far away over the horizon Tommie would like to employ more of them next year and expand the tomato business. In these recessionary times, there can be few businesses that can look at the sunset and say that.

$120 Million From The Red

If Zimbabwe’s economic problems hang like a cloud, you could argue that mining is the platinum lining. Platinum investment has poured into Zimbabwe—a country where mining contributes 13% to the GDP and accounts for 60% of export earnings.
Zimbabwe may be rich in resources but it is poor in policy. Most Zimbabweans have seen little of the wealth mined from beneath their feet. The irony is the unpredictable policies aimed at tackling this problem are putting off the foreign investors needed to fuel the long-term, capital-intensive business. Zimbabwe has, for the past decade, recorded among the lowest foreign direct investment (FDI) inflows in the sub-Saharan Africa region. In 2011, it didn’t even see $400 million in investment, compared to South Africa, Zambia and Angola, which received more than $1 billion apiece.
Platinum claims by government under the Mines and Minerals Act are a prime example. This year, the government acquired nearly 28,000 hectares of platinum claims held by Zimplats—a subsidiary of South Africa’s Impala Platinum—in the Mhondoro-Ngezi district. Earlier, the state had acquired Anglo American Platinum claims, in Shurugwi, to pave way for Todal Mining—a Russian-linked subsidiary of Central African Mining and Exploration Company. Government heavyweights are linked to the acquisition.
“It’s pointless to grab claims that you can’t make good use of,” says a mining engineer based at neighboring Zimasco chrome mine, which was taken over in 2007 by the Chinese.
There is talk that Chinese investors have been eyeing Anglos Unki Mine in the heart of the mineral-rich Great Dyke. This talk, along with the grabbing of the platinum claims, is enough to cause disquiet among investors.
“It will send a negative signal on security of investments in the country and will likely result in a slowdown in FDI into the sector. Mining is generally a long-term investment and investors want security that they will be able to recoup their investments without fear of repossession of their assets. The impact of this uncertainty has already been seen on the local stock market, where mining firms have struggled to raise funding from both local and foreign investors, while trading in these stocks has been quite subdued as the sector sometimes goes for days without recording a single trade,” says Isaac Isaki, head of sales and trading desk at EFE Securities.
With the benefit of foresight, perhaps none of the companies would have invested in the first place. Instead of taking the claims, Isaki argues that the government should have traded the excess claims in partial fulfillment of the indigenization laws, rather than force companies to comply with indigenization laws and then take away the claims.
Zimbabwe has the second largest platinum reserves, which Anglo, the world’s largest platinum producer, tapped into. While it is divesting in its core operations in Zimbabwe, it will keep its gold and platinum production going. Recently, Anglo ceded around 51% of its stake to black Zimbabweans, in a move that created ructions in the financial sector.
Impala Platinum, Zimplats’ owner, and Mimosa Platinum have also conceded to government’s indigenization demands. Once Anglo American had pumped $300 million into its Unki Mine operation, the government cajoled them into an empowerment deal, which, according to legal experts and analysts, had many holes.
Under the empowerment deal: the Tongogara Community Share Ownership Trust; the Unki Employee Trust; and the ‘strategic indigenous investors’ will receive 10% each of the shares. The government will acquire 21% through an indigenous empowerment board through decade-long loans. The Tongogara Community Share Ownership Trust, launched in 2011, was also given $10 million, with $1.3 million spent so far on schools, mortuaries and irrigation schemes.
Harare-based economist John Robertson, who has been studying mining in Zimbabwe for more than four decades, criticizes the empowerment laws.
“I regret that community share ownership schemes will probably make only modest contributions to rural societies, given the fact that their funds will be derived from dividends that will be paid only if and when the companies whose shares are owned by the schemes make profits big enough to justify dividends. If these dividends can be accumulated for long enough to pay for needed social infrastructure, such as roads, schools, dams, water purification plants and hospitals, the benefits will be important, but the word transform might be too extravagant to use to describe the benefits,” he says.
There is a strong perception in the market that the indigenization demands amount to legalized theft.
“Government has passed a law that states all foreign investors have to hand over 51% of their shares. What is the difference between this and a mugger demanding that you let him take half the money out of your wallet? It is wrong and passing a law to legalize it does not make it right,” says Robertson.
Despite these economic setbacks, the country’s future appears to lie in platinum. According to Anglo general manager, Walter Nemasasi, Unki Mine produced 62,692 equivalent platinum-refined ounces in 2012, with projected annual increases.
So far, Anglo has pumped in nearly $350 million into the operations, with the bulk going into a new raw water supply dam and a 17km-long tar road to the mine. At the very least, this investment is turning remote villages into booming towns.
The question is whether these government-brokered empowerment share ownership deals will bring the much needed development and give Zimbabweans a share of the wealth of their land. That is a question likely to be asked ahead of this year’s elections.
<h4>REFERENDUM</h4>
Hope, fear, optimism and change. These are some of the things that precede the Zimbabwean elections expected to be held later this year following the successful signing of a constitutional referendum that saw the three parties in the country make compromises.
With reportedly 3.3 million Zimbabweans having cast their vote in a referendum on a new constitution that seeks to curb presidential powers and strengthen human rights in their country, the spotlight is on Zimbabwe to see if democracy and change will be attained. 
Leaders in the country are seeing the agreement as a stepping stone to new beginnings but political commentators are not convinced it will yield the desired results. Gabriel Shumba, a human rights lawyer and political analyst from Zimbabwe is not celebrating just yet. 
Shumba believes if the Southern African Development Community (SADC) does not step in to assist leading to the elections, history could repeat itself and violence could erupt. 
“We are going to see violence preceding the next elections if precautionary measures are not taken by SADC to prevent violence that is already evident on the ground. The arrest of the human rights activist [Beatrice Mtetwa] is evidence that the next elections won’t be different from those of the past. We have to keep in mind that it is not a constitution that prevents violence or rigging, it is political will,” he says.

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Crowd fund the mines

This Business Is Not Flagging

$120 Million From The Red

A Fair Share Or Legalized Theft?