Banking group Standard Bank reports that its exposure to fraudulent aluminium activities in China is R854-million. Read on page 9 of this edition of Mining Weekly of the bank also losing another R1.032-million in a related sale of its global non-African markets business to the Industrial and Commercial Bank of China. The aluminium was pledged as collateral for a series of commodity financing arrangements by metals trading firms, which obtained multiple loans against the very same single cargo of metal, over and over again. Standard Bank is also exposed to aluminium at other bonded warehouses at the Qingdao port in Shandong province. A review under way of all its base metal holdings is expected to be made public as soon as possible as a means of restoring confidence in the bank’s due diligence procedures.
Webber Wentzel director Kenny Paton, who heads the legal firm’s hydrocarbons unit, has pointed out the technical, commercial and regulatory differences relating to the exploration and production (E&P) of shale when compared with the E&P of conventional natural gas. Read on page 12 of this edition of Mining Weekly of the classic E&P model not fitting well with shale gas, which differs in its intensity of environmental risk assessment and continuous appraisal. The next 18 months to three years are seen as critical in turning to account an estimated 390-trillion cubic feet of shale gas in the southern Karoo area. Should South Africa’s Mineral and Petroleum Resources Development Amendment Bill be signed into law, the State will be entitled to an automatic 20% free- carried interest in all E&P ventures. Along the way, the Petroleum Agency of South Africa will also be eliminated and its functions taken over by the regional managers of the Department of Mineral Resources.
South Africa’s only major copper producer, Palabora Copper, is awaiting shareholder approval for a R9.3-billion expansion at its operation, in Limpopo province, which is now under Chinese and South African ownership. Read on page 14 of this edition of Mining Weekly of a bankable feasibility study giving the thumbs up to the Lift II project, which was first mooted by the previous owners, Rio Tinto and Anglo American. Lift II will be 450 m below the impressively automated Lift I. If given the go-ahead, it will ensure that copper mining continues at Palabora Copper for another 20 years. A decision by the new ownership, which includes South Africa’s State-owned Industrial Development Corporation, is expected to include the selection and approval of an appropriate funding model.