Africa-Home to World's Most Wanted Minerals: Generally Speaking There Is Virtually No Mineral That Africa Does Not Have in Exploitable Quantities but the Continent Tends to Follow Its Economic Nose and Root out Those That Are the Money-Making Flavours of the Day. Tom Nevin Digs out the Story

By Nevin, Tom | African Business, February 2008 | Go to article overview
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Africa-Home to World's Most Wanted Minerals: Generally Speaking There Is Virtually No Mineral That Africa Does Not Have in Exploitable Quantities but the Continent Tends to Follow Its Economic Nose and Root out Those That Are the Money-Making Flavours of the Day. Tom Nevin Digs out the Story


Nevin, Tom, African Business


Strategically, energy-generating coal and uranium will be Africa's most important minerals in the decade ahead, followed by gold for the sheer flow of revenue it is generating. Right now we live in a world that turns on electrical power, and one that is building a seemingly unquenchable thirst for the means to spin turbines. And Africa has more of energy generation's wherewithal than anywhere else.

Coal

The International Energy Agency (IEA) reports that world energy demand will grow by two thirds over the next 30 years with a third of that growth in China and India and coal, as the most abundant and affordable of all fossil fuels, will be used to meet the demand. As the most important fuel for electricity generation, it will have a major and vital role to play, along with other fossil fuels.

Coal prices reached a record high of $77.87 in July 2004. The following three years, coal prices saw a steady decline until they reached the same figure again in July 2007. From then, they improved, reaching an all-time high of $128.40 in November, an increase of 65% in only four months, according to Miningmix.com, an influential voice in the South African extraction industry.

"These incredible ARA (Antwerp-Rotterdam-Amsterdam) prices have been followed closely by the Richards Bay Coal Terminal 'free on board' (FOB--i.e. delivered to the vessel) prices that during the week of 30 November 2007 were at $100.45, an increase of more that 50% in two months," it says.

Energy focus

Small wonder coal is now as much in the focus of investors as of national energy policymakers. In South Africa, eight new thermal power stations are to be built on one huge coalfield. Botswana is looking at two massive coal and gas projects, Zimbabwe is planning to exploit some of its vast and untouched coalfields, Mozambique has a $2bn black coal project on the go, Zambia is homing in on coal as well, and Malawi is looking for coal mining investors. This activity is mirrored around the rest of the world because the word 'energy' has relentlessly forced its way to a state of almost universal top-of-mind awareness and worry, and coal has become the cure.

In Africa, coal presents a fairly lopsided resource picture, but that will change. Virtually all of the continent's known coal reserves lie south of the equator, while oil resources generally lie north of the line. The single largest coal export terminal in the world, South Africa's Richards Bay Coal Terminal (RBCT), now has the capacity to export 76m tons a year of coal, up from 72m, according to spokesman Zama Luthuli (see Logistics page).

The increase, which came into effect on 1 January, is part of a larger capacity-expansion project, which will grow RBCT's annual export capacity to 91m tons a year by mid-2009, at a cost of R1.2bn ($170m). The terminal received 64.7m tons of coal during 2007, but was able to export 66.15m tons during the year by reducing stockpiles. However, the figure still fell short of the 66.47m tons shipped in 2006. "The industry needs to readjust itself to the new circumstances and rules and regulations," says industry spokesman Xavier Prevost. "It now also needs to take cognisance of the fact that environmental laws and regulations to control the level of the release of emissions will soon be announced. This fact will make coal mining and usage more expensive than ever.

Uranium

The atom is undoubtedly the favourite child of the energy age and is the great hope of annihilating the world's dependence on fossil fuels for its electricity and other power needs. That realisation has focused greater attention on the need for the rapid identification and exploitation of such nuclear fuel raw materials as uranium and other less well known radioactive minerals.

[ILLUSTRATION OMITTED]

Namibia, particularly, came under the spotlight last year with investors from Canada, Russia, China, Japan and even South Korea arriving in droves to secure their place in the uranium-rush.

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Africa-Home to World's Most Wanted Minerals: Generally Speaking There Is Virtually No Mineral That Africa Does Not Have in Exploitable Quantities but the Continent Tends to Follow Its Economic Nose and Root out Those That Are the Money-Making Flavours of the Day. Tom Nevin Digs out the Story
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