AFRICA INDUSTRIAL BRIEFS

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Researched by Industrial Info Resources (Sugar Land, Texas)--

METALS AND MINERALS

Brazil's Vale to Invest $400 Million in Zambian Copper Mine

Brazil's global mining major Vale S.A. (NYSE:VALE) (Rio de Janeiro, Brazil) is preparing to invest $400 million in the Konkola North copper project in Zambia. The implementation of the project will begin in September, and production is scheduled for 2013. The investment will be made over a period of 30 months. Initial production will be 50,000 tons of copper per year, which will increase to 100,000 tons per annum by 2015, when the second-phase expansion starts. The underground mine will employ about 1,500 people. The project is a joint venture between Vale and South Africa's African Rainbow Minerals. This is the first of a number of African projects Vale is planning. The company is exploring and will invest in nickel mining in Zambia after the completion of Konkola North.

Itochu Takes Stake in Namibia's Rossing South Uranium Project

Nippon Uranium Resources (Australia), a wholly owned subsidiary of Japan's Itochu Corporation (OTC:ITOCF) (Tokyo, Japan), is taking a 10.3% stake in Extract Resources, which owns the Rossing South uranium project in Namibia. The equity interest is being sold by Polo Resources and associated companies. Feasibility studies are being performed at Rossing South, which is one of the largest uranium projects in the world. Extract is planning to produce 5,700 tons of uranium per year by 2014 from an open-pit operation. Itochu already holds shares in major uranium miners and is looking to providing a stable supply of the key mineral to Japan's nuclear needs. The state owned Japan Oil, Gas and Metals National Corporation (JOGMEC) pledged $43 million of exploration financing to the project earlier this year, when Itochu bought a 134.9% stake in Kalahari Minerals, Extract's main shareholder.

Coal Problems Continue to Dog Eskom

The new chief operating officer of South Africa's state-owned power utility, Eskom (Johannesburg), says in the company's annual report that a "marked" deterioration in the quality of coal supplied to Eskom has been a continuing trend since 2006. Pointing out the adverse dynamics in the local coal industry, which he said have a negative effect on Eskom, the power balance has shifted away from national interest to that of the shareholders of the miners. This, he said, has impacted the quantity, quality and cost of coal supplied to Eskom as some miners had deliberately optimized their total business at Eskom's expense. Eskom is shadowed by memories of the chain of blackouts in 2008 caused by poor coal-supply management, despite excellent delivery during the World Cup soccer tournament. Poor-quality coal has led to load losses at a number of power stations. The losses amounted to more than $220 million to the system, with three power stations accounting for 86% of the losses.

POWER

Massive Desertec Renewable Power Project Could Expand

The Desertec Industrial Initiative (DII), a massive renewable energy project in North Africa, the Middle East and Europe, is currently being scoped and could be enlarged to include projects which were not originally part of the scheme, and these could involve more African projects, said Siemens AG (NYSE:SI) (Munich, Germany) CEO Peter Loescher. Currently, the technical and investment scope of the project is being defined and environmental constraints on the development of the project are being studied. This analysis process is expected to continue through 2012. The current plan sees a network of solar power sites mostly in the deserts of North Africa and the Middle East and supported by wind, biomass, geothermal and hydropower. Power generated would be transmitted through high-voltage direct current lines to Europe, North Africa and the Middle East, and could supply 15% of Europe's power needs by 2050. The concept could be replicated worldwide, as 90% of the world's population lives within 3,000 kilometers of deserts. The first Desertec plants could be built by 2016/2018.

GE Generators Back Up South Africa's Multi-Product Pipeline

South Africa's state-owned freight logistics group, Transnet, has awarded a $40 million contract to GE South Africa Technologies (GESAT), a division of General Electric (NYSE:GE) (Fairfield, Connecticut), for the supply of 10 medium-speed, diesel-powered generators for the $3.4 billion new multi-product pipeline (NMPP), which is being constructed between Durban on the east coast to Johannesburg. The generators will range in power from 2.8 MW to 5 MW, and will provide a combined output of 34 MW to provide emergency power to the pipeline pump stations and terminals. The pipeline is designed to secure the supply of diesel, petrol and jet fuel to the inland markets of South Africa. The generators are based on GE locomotive engines, with features including fuel efficiency, reduced service intervals and ease of maintenance. The pipeline project has seen a cost escalation of more than $600 million and should be completed by the end of 2012 with a capacity of 1,000 cubic meters per hour, scalable up to 3,000 cubic meters per hour through the addition of new pump stations.

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