Solid Minerals
Grindrod and Northwest Rail Company partner to develop the Copper Railway in Zambia
LUSAKA – Grindrod Limited, the JSE listed freight and logistics service provider, through its wholly owned subsidiary Grindrod Mauritius, today announced the opportunity to work with Northwest Rail Company Limited (“NWR”), to build, operate and maintain a new 590km cape gauge railway from Chingola in the heart of the old Zambian Copperbelt to the Angolan border.
These exclusive rights were granted to NWR, a Zambian company, by the Government of Zambia in July 2006. The agreement signed today will enable the parties to conclude the bankable feasibility study which is currently underway.
The railway is to be built in two phases – Phase I extending from Chingola to the Kansanshi, Lumwana and Kalumbila mines (290 km of track), and Phase II to connect with the Benguela line on the Zambian-Angola border near Jimbe. Phase I is intended to service existing ore and finished copper traffic, and Phase II is intended to open up a direct corridor to Lobito which would allow landlocked Zambia to import oil directly from Angola, and to stimulate further mining activity in the Western Copperbelt region.
The estimated capital cost of Phase 1 is US$ 489 million while Phase 2 of the NWR project is estimated to cost US$500 million.
KPMG’s Infrastructure and Major Projects team have successfully developed the project with NWR over the last twelve months and have facilitated the closure of the deal.
Subject to the conclusion of the Phase 1 bankability feasibility study, construction is expected to commence during 2014. “I have been developing this project for a number of years and the synergies with Grindrod’s Rail businesses, makes Grindrod an ideal partner in the joint venture and means we will be able to bring this project to being in the shortest possible time”, said Honourable Enoch Kavindele, a former Vice-President of Zambia and founder/owner of NWR.
Grindrod’s Rail division operates railways and builds, refurbishes and maintains locomotives and wagons provides rail signaling systems and constructs and maintains track infrastructure. Said James Holley, Grindrod Rail, Divisional Chief Executive, “We have spent the last few years developing our rail capabilities and growing our capacity to participate in the growth in the Africa rail sector. It has meant we are perfectly placed to take up opportunities like this on the African continent”.
Said Dave Rennie, CEO Grindrod Freight Services –Ports & Rail, “This investment will enable Grindrod to extract synergies from our existing investments in the North South rail corridor and our port operations in Maputo, Richards Bay and Durban. We also see great potential in creating an Atlantic gateway to Central Africa through Lobito and look forward to playing our part in making this a reality with the development of Phase II”.
The Copperbelt straddles the border of Northern Zambia and the Southern DRC and is amongst the richest under developed geological regions in Africa. Current production of copper in this area accounts for around 8% of the world’s production, and BMI International forecasts sustained growth in the Zambian copper industry at 5% per annum over the next decade.
Said Dave Rennie, “We like the economic fundamentals of the copper market. We have previously been highly focused on the coal and iron ore markets so this gives us a good opportunity to diversify our bulk commodity mix”.
Existing copper mines are located in the Eastern Copperbelt and are serviced by smelters located near to Chingola (Zambia) and Lubumbashi (DRC). New mine developments have started, and more are planned, in the Central and Western Copperbelt area of Zambia which need to transport ore up to 300kms for processing. Road infrastructure is poor, and the cost of road transport is becoming prohibitive. An alternative rail transport solution will be both more economic for the North Western province of Zambia and much less damaging to the local environmental.
Said Enoch Kavindele, “Grindrod has proven itself to be a good custodian of state assets elsewhere in Africa and I believe that as Zambians, we can be pleased to have them as our partners in this important project which will create thousands of jobs in the country in accordance with government policy.
Business
Nigeria set to boost Naira value and foreign reserve with local gold production, as Tinubu receives gold bar
IN a significant move to strengthen Nigeria’s economy, President Bola Tinubu received a symbolic gold bar on Sunday from the Minister of Solid Minerals Development, Dele Alake.
This gesture marks the commencement of the National Gold Purchase Program (NGPP), aimed at boosting the naira’s value and enhancing the country’s foreign reserves.
Minister Alake expressed gratitude to President Tinubu for his support of reforms in the solid minerals sector.
He highlighted that the NGPP, which involves sourcing gold from artisanal and small-scale miners and refining it to meet the London Bullion Market Association’s Good Delivery Standard, will substantially contribute to Nigeria’s economic stability.
Alake stated “This initiative will significantly increase our foreign reserves and strengthen the naira. The refined gold will be supplied to the Central Bank of Nigeria, marking a crucial step in our economic strategy.”
The presentation also underscored the first commercial transaction under the NGPP, establishing a centralized gold purchasing system that integrates small-scale miners, cooperatives, and production units across the nation.
This program is expected to provide a structured market for gold, fostering economic growth and stability.
He said, “The successful completion of the first commercial transaction clearly demonstrates the National Gold Purchase Program’s effectiveness. It has increased the nation’s foreign reserves assets and shown that using the Nigerian Naira to purchase a liquid asset traded in United States Dollars, such as gold, is a viable strategy. This transaction has also underscored the potential of the National Gold Purchase Program to enhance fiscal and monetary stability.”
Alake added that the initial commercial transaction under the program resulted in a +US$5 million boost in Nigeria’s foreign reserve assets.
The transaction involved refining over 70 kilograms of gold to meet the London Bullion Market quality standard and aggregating locally mined gold, thereby infusing approximately NGN6 billion into the rural economy.
President Tinubu expressed appreciation for the Ministry’s accomplishment in advancing the government’s goal of economic diversification by acknowledging and displaying the symbolic gold bar
The Nigerian Government has threatened to come down heavily on foreigners sponsoring bandictory as a way of sustaining illegal mining activities in parts of the country.
The warning was handed down in Abuja by Minister, Solid Minerals Development, Dr Oladele Alake, while receiving a delegation of the Nigeria-China Chamber of Mines led by its National President, Dr. Olugbenga Ajala.
Details of these were contained in a statement released by Head, Press & PR, Ministry of Solid Minerals Development, Alaba Balogun over the weekend.
The statement cited, Dr Alake, thus, “The government will come down firmly on these unscrupulous foreign operators sponsoring banditry to perpetrate illegal mining: let me use this medium to appeal through you to tell those sponsors to desist or face the full wrath of the law.”
According to Dr Alake, the Ministry is committed to establishing a multi-agency task force that will end the activities of illegal miners and their collaborators.
The Minster made it clear that the FG had given illegal miners a 30-day-ultimatum to legitimise their businesses, quit Nigeria or incur the wrath of the law.
According to him, this will help “to streamline and structure the Small-Scale Artisanal Miners for maximum yield to the Federal Government.”
The delegation paid a courtesy call on the Minsiter at the Ministry’s headquarters in Abuja.
By Edozie Obasi-Eze
Amidst heightening uncertainties in the domestic petroleum products market characterised by scarcity and irregular pricing, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has declared that there’s no intention to review pump prices upwards.
This was contained in an advisory issued by General Manager, Corporate Communications, NMDPRA, Kimchi Apollo.
He stated that the Nigerian National Petroleum Corporation Limited (NNPCL) had imported PMS with current stock levels sufficient for 34 days.
In an attempt to address panic buying and speculations which have seen price of Premium Motor Spirit (PMS) oscillate between N180-N250 in the Lagos area, Apollo assured that there was enough quantity of the product in the country already.
He said, “Consequently, marketers and the general public are advised to avoid panic buying, diversion of products and hoarding.
“In keeping with the Authority’s responsibilities as outlined in the Petroleum Industry Act (PIA), the Authority assures the public that it would continue to monitor the supply and distribution of petroleum products nationwide, especially during this holiday season.”
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