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The indaba’s value lies in its networking opportunities

NETWORKING AT THE INDABA Meeting with banks, financiers and mining juniors and majors, as well as establishing contact for possible deals, are key reasons for attending the Mining Indaba

Photo by Anthea Davison Photography

MARC STRUIK The Mining Indaba is critically important for all African mining stakeholders who need to be informed of the latest industry trends

24th January 2014

By: Ilan Solomons

Creamer Media Staff Writer

  

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Iron-ore, diamonds and ferro- nickel mining company BSGR Mining & Metals CEO Marc Struik says he will attend the 2014 Investing in African Mining Indaba to network with potential investors and other mining industry stakeholders.

“Meeting with bankers, financiers and mining juniors and majors, as well as being informed about the latest trends in the industry and making possible deals, is our main reason for attending the indaba,” he tells Mining Weekly.

Struik highlights that the Mining Indaba, which will take place at the Cape Town International Convention Centre from February 3 to 6, “is the best of its kind”.
He adds that, although BSGR Mining & Metals, a division of diversified natural resources business BSG Resources (BSGR), has never exhibited at the indaba, he has attended every Mining Indaba event since 2000, with the exception of the 2012 indaba, which he was unable attend, owing to business commitments elsewhere.

“The indaba is critically important for all African mining stakeholders, as we learn about the latest industry trends and the latest industry deals, and receive updates on projects and mining legislation,” Struik states, adding that he is looking forward to attending the presentations during the course of the indaba.

African Operations

BSGR has been an active investor in Guinea since 2006, with exploration projects in iron-ore, bauxite and uranium, including the discovery of the Zogota iron-ore deposit, in Simandou South, in south-eastern Guinea.

The company contracted several Africa-based and international consultants to develop the Zogota feasibility study, including MSA Geological Consultants, Fugro, Foraco, Environ, DWA, Energold, Geoprospect, Snowden, SRK, Bateman Engineering and WSP.

Throughout 2008 and 2009, a total of 180 holes and 16 173 m were drilled at the Zogota project site.

In December 2008, BSGR was awarded an exploration licence covering
369 km2 of Simandou Blocks 1 and 2. The licence was valid for three years and twice renewable for another two years.

From April 2009 to June 2010, BSGR drilled 94 holes, which equated to a total of 15 846 m.

Total expenditure on the Zogota feasibility study and exploration work on Blocks 1 and 2 between 2006 and April 2010 exceeded $160-million.

In December 2009, following negotiations with the government of Guinea and after the submission of the first iron-ore feasibility study in Guinea, a concession agreement was signed, which provided a framework for a two-phased mine development project comprising the Zogota and Simandou Blocks 1 and 2 iron-ore deposits.

In March 2010, BSGR was awarded a second concession agreement on the Zogota project by the government of Guinea, which included the provision of an export route through Liberia that would be exclusive for the following three years.

BSGR tells Mining Weekly that, in exchange for the right to transport the iron-ore extracted from the Zogota and Simandou Blocks 1 and 2 deposits through Liberia, BSGR agreed to build a 660 km passenger railway across Guinea from Conakry to Kankan, with an extension running to the south-eastern Guinea town of Kérouané “as a gift to benefit the people living in these isolated communities”.

However, the company’s efforts to develop the Zogota iron-ore deposits have been derailed owing to ongoing disputes between BSGR and the Guinea government, which was yet to be resolved at the time of going to print.

Koidu Kimberlite Project

Since 2002, BSGR has invested more than $300-million in its 100%-owned diamond mining subsidiary, Octea, in Sierra Leone. The Koidu kimberlite project is situated in the Tankoro Chiefdom of the Kono district, in the Eastern province of Sierra Leone.

BSGR states that its investment has transformed mining at Koidu from a small-scale manual operation into one of the country’s largest employers, with a permanent staff complement of 1 100 in 2013, of whom 85% are local Sierra Leoneans.

An additional 300 short-term employees are also employed through local contractors constructing a resettlement village in an area near the mine site.

A key element of BSGR’s operations include a series of linked sustainable community development programmes that range from providing clean water and new housing to locals, providing educational oppor- tunities for locals in the national university and building health- care centres and local primary and secondary schools, initiating microenterprising programmes to engage local women in entrepreneurial business opportunities to organising sporting activities for the surrounding communities, in addition to sponsoring two national football clubs.

“Koidu’s production capacity will be expanded to about 55 000 ct a year – a fivefold increase, compared with previous production values. “Over the life of the mine, operations will shift from openpit to underground mining and will produce about seven-million carats from the current known resource estimate,” states BSGR.

The terms of the mining lease were recently extended to July 22, 2030, and may be renewed for an additional 15 years.

BSGR states that the Koidu mining lease covers about 4.9 km2 and hosts two small kimberlite pipes – Number 1 pipe and Number 2 pipe – and four kimberlite dyke zones, along with four small blows, or enlargements.

The company states that five main settlements were affected by the project; however, an environ- mental- and a social-impact assessment identified certain areas that would be affected by the relatively small-scale oper- ation envisaged at the time, and prepared a comprehensive resettlement action plan to assist in the impact a larger-scale operation would have.

All parties agreed on an arrangement in December 2007, which involved the relocation of all settlements located within the mining lease area, and further resettlement of communities in close proximity to the mining lease area.

“In addition to corporate social responsibility programmes, effective company training programmes have [made] a good start towards increasing the skills base for the business,” BSGR states.

“Our focus on business transparency, environmental sustainability and ethical social programmes is helping to transform the perception of diamonds within the mining sector and luxury goods market,” BSGR concludes.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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