African Minerals Founder Strikes Deal to Buy Marampa Mine from London Mining
African Minerals (LON:AMI) founder and chairman, Frank Timis, is one step closer to securing a deal to purchase London Mining’s (LON:LOND) Marampa iron ore mine in Sierra Leone.
The founder’s private company, Timis Mining Corp, is said to have secured $20 million in financial backing from Australia’s Cape Lambert Resources to acquire the mine, which toppled into administration last week after failing to find a buyer.
Funding for the acquisition will take the form of a 12-month $8 million loan and a $12 million royalty purchase, which gives Cape Lambert $2 for each ton of iron concentrate sold by the mine. The funding package is contingent upon Timis Mining securing the assets from the administrator.
Marampa, which employs around 1,300 people, is expected to produce approximately five million to seven million tons of iron ore a year. At this rate, the annual royalty for Cape Lambert is $10 million to $14 million or as much as $56 million over the term of the deal.
As London Mining’s only operating mine, Marampa reported a first-half loss due to slumping iron ore prices and the worst Ebola outbreak in history for Sierra Leone. The mine slipped into administration last week after it ran out of funds and failed to secure a buyer for the company.
The acquisition makes sense for African Minerals. The company’s Tonkolili project in Sierra Leone is about 120 kilometers from Marampa and is expected to enter into a joint venture with the mine.
According to Investec analysts, African Minerals seemed to be the natural acquirer for the Marampa mine, given its significant infrastructure in the region.
"... It is interesting that it is Timis' private company purportedly doing the bidding, perhaps because it can more readily realize the funding to make the offer.”
AngloGold Ashanti establishes BG Umoja JV in Tanzania
AngloGold Ashanti, in line with it s strategy to ensure a sustainable contribution to the economies of host countries, has established the BG Umoja joint venture (JV), in Tanzania.
Awarded a $186m two-year mining contract for the Nyankanga and Geita Hill underground mining projects, the 80/20 joint venture is a partnership between Africa Underground Mining Services (AUMS) Tanzania, a subsidiary of Australia’s Perenti Group, and local drilling services and mining- supply company, Geofields Tanzania Limited.
The partnership is modelled on a similar underground mining joint venture at the Company’s Obuasi Redevelopment Project in Ghana between AUMS Ghana and Accra-based, wholly Ghanaian-owned Rocksure and will help build local specialised mining capacity.
“We’re working with our experienced mining contractors to assist in establishing local joint ventures for long-term transfer of sustainable skills, and to continue building on our sustainable local procurement programmes,” commented Sicelo Ntuli, AngloGold Ashanti’s Chief Operating Officer: Africa.
“AngloGold Ashanti is building sustainable local procurement programmes that will allow it to stimulate economic and social development at all of its operations, evidenced by the significant contribution Geita has made to the fiscus and people of Tanzania.”
AngloGold Ashanti’s annual expenditure with indigenous Tanzanian suppliers has almost tripled to $162mn since 2016. The company’s local team in Tanzania has set itself an ambitious target of 60% to 70% of all expenditures with indigenous Tanzanian companies, by 2025.
Scope 3 Emissions
In addition, AngloGold Ashanti’s Geita Gold Mine has awarded a two-year fuel transportation contract, worth approximately $10.8m a year, to two local contractors - one of which is originally from Geita. This is in line with the mine’s commitment to contribute to the economies of host communities. The Geita-based company was part of Geita Mine’s supply chain capacity building initiative for host community suppliers, a partnership between the Mine and the National Economic Empowerment Council.
To influence Scope 3 emissions, trucks are to be compliant with EURO IV emissions standards, tankers are to be made of an aluminium alloy material to reduce weight and the age of the fleet will be maintained at less than six years.
Diversity & Inclusion
The contractors already employ women fuel tanker drivers, fulfilling the Mine’s requirements for diversity and inclusion. The two contractors both own workshop facilities in Geita town and participate in social initiatives aimed at uplifting the lives of host community residents.
AngloGold Ashanti has been operating at Geita Gold Mine for more than 20 years, with the project initially a single pit mine, evolving now to a predominantly underground operation, employing 5,700 employees and contractors.
Earlier this year, the Government of Tanzania recognized AngloGold Ashanti’s contribution to the economy of the country, awarding it for its outstanding performance in a number of areas, including environmental and safety performance, corporate social investment, the best taxpayer in the mining sector, the runners up in local business content and overall best performer in the mining sector in Tanzania in 2019/2020.
Geita Gold Mine
Geita, one of AngloGold Ashanti’s flagship mines, is located in north-western Tanzania in the Lake Victoria goldfields of Mwanza region, about 120km from Mwanza and 4km west of the town of Geita. It has been in operation as a large-scale mine since 2000.