Partnerships Provide Pivotal Role in True North Gems' Bid for Greenland Mining
Greenland is home to some of the most pure sapphire and ruby gems in the world. The country, which has notoriously been hesitant to allow mining activities in the past, recently awarded an exploration permit to True North Gems – a junior exploration company based in Canada. The company plans to not only succeed in finding profitable gems but make a positive impact in the local community as well.
Through key partnerships and a steady commitment to sharing the benefits of its business, True North Gems is striving to become the world’s premier producer of Rubies and Pink Sapphires by creating a legacy of social responsibility.
Partnership with LNS Greenland
In March, True North Gems was awarded a 30-year mining permit for the Aappaluttoq Ruby deposit in Southwest Greenland. The mining project, which has an initial mine life of nine years, will range from an open-pit mine to a gemstone grading and processing facility. To finance the infrastructure costs, the company needed to secure a financial partner.
“We wanted to engage with someone who had an interest in focusing on the quality of the ruby- and sapphire ore, not just the quantity,” says Bent Jensen, General Manager of the Aappaluttoq project.
“Normally, you want to focus on the volume and get the most out of the ground. With us, that’s not the case. We want to protect the mineral ore as much as possible.”
The company set off in search of an investor with the same mindset, experience, and financial backing to fit its needs, and the Leonhard Nilsen and Sonner AS Group (LNS) had all the attributes.
“We wanted to engage with an operator that would focus on the motive. We quickly came to the conclusion we needed to get an operator who would also be an investor,” says Jensen. “That’s why they’re interesting. They have the experience building and operating mines, the financial backing we need, and they were initially involved in the gold mining here in Greenland. So they have a relationship with the community.”
True North Gems and LNS Group through LNS Greenland signed a deal for the latter to invest a total of $34 million into the project through mine infrastructure and capital loan. The deal included:
• Building a port
• Building a complete and modern camp for approx. 48 workers
• Building Fuel depot, Explosive Depot, Heli-pad and workshop
• Building a Process Plant
• Building approx. 8.5 km of roads to tie all facilities together
• The completion of all infrastructure, which will enable planned production to commence in 2015
• Once construction is completed, LNSG will be in charge of the daily operation of the mine-site
In return, LNS will receive 7 percent initial ownership in the Greenlandic company True North Gems Greenland (TNGG) and upon completion of the infrastructure and reaching operational status LNS will have earned the right to a further 20 percent ownership. Bringing their total ownership to 27 percent.
“We had other interesting investors but we chose LNS because we saw the Group as the ideal partner for the project. At the end of the day, we wanted what was best for the not only the project, but also the community” says Jensen.
“We see it as a very strong joint venture.”
True North Gems has completed the Impact Benefit Agreement (IBA) negotiations and all parties have executed a ground breaking accord. The Company has also finalized the subsequent operating and closure plan for the Aappaluttoq Ruby deposit. As part of its agreement, the company plans to engage with the local community and provide training and economic benefits from the project.
“If you look at our social impact assessment report, we raise the possibility of hiring local people right from the start,” says Jensen. “This is a decision we made a long time ago as we wanted to engage with the local community to make sure they benefit from this project. When we have a mandate we strive to adhere to it.”
For the project, the company has planned to hire roughly 80 workers of which the company has committed to ensure that at least 75% of these will be local employees in which they would train and implement in various functions of the operation.
According to Jensen, after initiating the Hearing Process, receiving exploitation permitting and approvals of Exploitation- and Abandonment Plans from the Greenland government, the company had received 300 unsolicited applications from the local community.
“We couldn’t believe it. Over 300 people applied for positions within our company all on their own. I think the community is starting to trust us and our commitment.”
In regards to training, the company quickly realized most of the community had already been trained in the mining industry.
“In 2009, the Government opened a mining school. The school is responsible for running a training program called Common Core. Over 300 people have passed the course. We quickly realized there are a lot of people who already have the skill sets needed,” says Jensen.
Living up to their promises
To further enhance the community, True North Gems is developing a local recruitment strategy which focuses on pre-employment, recruiting and employee retention and employee development initiatives.
The company is also planning to launch an array of cultural awareness, community well-being and health and safety programs in an effort to address local issues. In addition, the company is working with the local community to minimize any negative environmental impacts of the project.
With pivotal partnerships in place, True North Gems is building the platform for a successful mining operation through trust and integrity.
According to Jensen, by building relationships through trust and open communication, True North Gems is working to provide social, cultural and community support, which will benefit both the community and the company.
“We’ve already hired our first set of local-based employees. The people of Greenland can now see we live up to our promises.”
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.