Thursday, 31 January 2013 17:28

Newsletter 26

In this newsletter:

  • South Africa grows iron ore exports to China
  • CNOOC set to start drilling later this year
  • $650m Chinese loan for Wesizwe’s Bakubung platinum mine project
  • Ernst & Young opens Beijing tax desk for China-Africa business

South Africa grows iron ore exports to China

South Africa overtook India to become China's third-biggest iron ore supplier in 2012, while Australia strengthened its dominant position as the major supplier to the world's biggest iron ore consuming nation, data from customs showed on Monday.

South Africa provided 40.6 million tonnes over the year, up 12 percent compared to 2011, while Indian imports declined 54.74 percent to 33 million tonnes.

Indian authorities have been cracking down on chaotic and illegal iron ore production, with the state of Goa - one of the country's biggest suppliers - imposing a blanket ban on all mining activities last October.

Supplies from India amounted to 10.6 percent of China's total imports in 2011, but were already disrupted by a mining ban in Karnataka, India's biggest iron ore producing state.

India's share of total imports into China has been in steady decline for several years, falling from 23 percent in 2006 to just 4.4 percent last year.

The biggest beneficiary of the Indian supply crunch has been Australia, China's top supplier by far.

It delivered 351.5 million tonnes, or 47 percent of China's total imports over the year, up from 43 percent in 2011, and its dominance is likely to increase further in 2013.

“This year should be the year of Australia taking an increasing market share on the global iron ore market,” said Graeme Train, commodities analyst with Macquarie in Shanghai.

“Brazil is not going to see any growth with Vale guiding for negative volumes - the vast majority of growth on the seaborne market is coming from Australia.”

Australia's position in China is also likely to be strengthened if the European iron and steel sector starts to recover this year, allowing the likes of South Africa and Finland to divert deliveries back to their traditional markets.

India's ranking has plunged throughout the second half of the year, with monthly shipments eventually falling behind the likes of Mauritania, North Korea and Finland to come in at 20th place in December.

Supplies from India are not expected to recover in the near term, and are unlikely to reach previous high levels, said Train.

“I think India can recover to some extent - they are going through a process of cleaning up illegal operations and eventually it will get back on line, but it will be at severely reduced volumes relative to where they were historically.”

China imported a record of 743.6 million tonnes of iron ore in 2012, up 8.4 percent on the year. - Reuters


CNOOC set to start drilling later this year

China National Offshore Oil Corporation (CNOOC) Uganda Ltd is set to start its oil drilling activities in Hoima District later this year.

The firm has presented its planned activities to the district authorities indicating their intentions to construct an access road in Kyangwali Sub-county, from Ikamiro Village, through the Albertine escarpment to Buhuka landing site.

The Kingfisher field can only be accessed by water since vehicles cannot descend or ascend the sharp 4-kilometres-long Albertine rift valley.
CNOOC officials last week said they are negotiating with the Ugandan government and sourcing for consultants for the project.

The CNOOC presentation to the district further indicated that the company plans to carry out seismic surveys to obtain data about the oil deposits in its area of operation. The 2D and 3D seismic surveys are used in oil operations to interpret large-scale subsurface geological structural features.

The planned activities were jointly presented by Mr Good Kaija, a CNOOC community liaison officer, Mr Zakalia Lubega, the corporate social responsibility manager and Mr Xianmin Chen, the head of the company’s legal and commercial department.

CNOOC which hit a dry well at its Kanywataba prospect in Ntoroko District in July, is in Hoima where it will develop the Kingfisher oil field whose commercial oil deposits are already proven.

The kingfisher 1, 2 and 3 oil wells which were discovered by Heritage oil, are located on the shores of Lake Albert on a tiny fishing village inhabited mainly by fishermen and a few pastoralists.
Heritage sold its interests to Tullow oil and CNOOC obtained the interests after Tullow farmed down part of its interests to CNOOC and Total in 2012.


$650m Chinese loan for Wesizwe’s Bakubung platinum mine project

The China Development Bank (CDB) had approved a $650-million loan for the development of the Bakubung platinum mine project in South Africa's North West province, the Chinese-controlled JSE-listed Wesizwe Platinum confirmed on Monday.

“This is good news for Wesizwe and sends a positive signal to the industry as a whole during what is currently a challenging period of time,” said Wesizwe CEO Jianke Gao, who added that 30.21% of the project employees were local.

An accredited rock-drill operator academy, which took in its first local recruits in November, was part of a training initiative to support future employment needs, the company said in a media release.

Part of the $650-million loan would be used to refund two separate $100-million short-term loans, which CDB and Wesizwe signed last month.

The on-schedule Bakubung project, on the western limb of the Bushveld Complex, near Rustenburg, was on budget.

Main commissioning was scheduled for 2018 and full production was anticipated in 2023.

Gao added that funding demonstrated the level of confidence in the project, and in the future of the South African mining industry.

Wesizwe agreed the financing deal with Jinchuan, of China, and the China-Africa Development Fund in 2011, when the China-Africa Jinchuan Investment consortium paid $227-million for 45% of Wesizwe and undertook to provide $877-million in funding for the Bakubung platinum mine project.

Earlier this month, Wesizwe appointed former Aquarius Platinum executive Paul Smith as its new COO.

Gao, a mining engineer, has held many key positions within the Jinchuan group.


Ernst & Young opens Beijing tax desk for China-Africa business

Ernst & Young has launched its Africa Global Tax Desk in Beijing, China to enhance business transaction between the continent and the Asian country.

With Chinese investment in Africa increasing, the Africa Global Tax Desk will provide “Chinese companies with real time advice on investing in Africa”, says Ernst & Young.

Chinese companies made direct investment in Africa totaling nearly $15 billion by the end of 2011,

Officials named Rendani Neluvhalani, an International Tax Services (ITS) Partner to lead the new tax desk.

Ernst & Young said its Africa tax network and Rendani will serve the China market, as well as countries in the Asia-Pacific region and Japan.


ghana business

Last modified on Saturday, 02 February 2013 17:52