Dangote Cement Records 12.6% Sales Volume Increase Across Africa

Dangote Cement, Africa’s largest cement producer, has announced its unaudited results for the six months ended 30th June 2017, posting a 12.6 percent increase in sales volume across Africa. 

In the financials released on the floor of the Nigerian Stock Exchange indicated that the increase in sales volume showed a growing capture of Pan-African market as Dangote Cement continues to gain grounds.

Revenues from operations in Nigeria increased by 34.5 percent  to ₦291.4 billion while Pan-Africa revenue increased by 63.7 percent to ₦124.4B from ₦76.0B mainly as a result of increased volumes and foreign exchange gains when converting the sales from country local currency into Naira.

Analysis of the half year result revealed that sales volumes of African operations increased by 12.6 percent to 4.7 million metric tons with Sierra Leone making a   53 kt maiden contribution.

Record of sales from its operations scattered around the African continent revealed that a total of 1.1million ‘metric tons of cement was sold in Ethiopia, almost 0.7 million metric tons sold in Senegal, 0.6 million metric tons sold in Cameroon, and 0.5 million tons in Ghana.

Also, 0.4 million metric tons of cement was sold in Tanzania and 0.3 million tons in Zambia. Sales volumes from Nigerian operations fell from 8.8Mt to 6.9Mt, occasioned by the onset of rains which stalled many construction projects.

Reflecting on the half year results, Dangote Cement’s Chief Executive Officer, Onne van der Weijde expressed satisfaction that the company’s revenues have continued to grow despite low sales from the Nigerian operations noting that the revenues grew on the strength of sales from other African operations.

Said he: “Our revenues have continued to grow despite the lower volumes seen in Nigeria, especially because of the recent heavy rains. Our margins have improved significantly, helped by improved efficiencies and a much better fuel mix in Nigeria.

“We are using much more gas and increasing our use of coal mined in Nigeria, thus reducing our need for foreign currency and supporting Nigerian jobs.

”Our Pan-African operations are growing well and increasing market share. We saw our the first sales from Sierra Leone in the first quarter and our new plant in the Republic of Congo will be in production at the end of July, further increasing our footprint across Africa and strengthening our position as its leading manufacturer of cement.”

The Company reports that it estimated that Nigeria’s total market for cement was 10.2 million tonnes (Mt), 23.2% lower than the estimated 13.3Mt sold in Nigeria in the first half of 2016. Of total market sales in the first half of 2017, just 0.1Mt was imported. 

“As a result of the slower market, our Nigeria operation sold nearly 6.9Mt of cement, down 21.8% on the 8.8Mt sold in the first half of 2016. We estimate our market share to have been about 64.5% during the first six months of 2017.   

Dangote Cement is a high-growth, low-debt, internationally diversified company that has just paid a dividend amounting to nearly 75% of 2016 net profits to shareholders.

“The recent publication of our credit ratings highlights the financial strength we have achieved through our unwavering focus on the profitable expansion of the business, underpinned by our belief that we must remain prudent in our financial management.”, Mr. Weijde stated.

Nigeria Gets $1.5bn Nitrogenous Fertilizer Plant

Nigeria’s acting President, Prof Yemi Osinbajo, Thursday in Port Harcourt inaugurated a giant world-class fertilizer plant, built by Indorama Eleme Fertilizer and Chemicals Limited at the cost of $1.5 billion. 

The acting President used the opportunity to remind all Nigerians that time has come for them to grow whatever they eat and produce whatever they consume.

“What Indorama is accomplishing today is very much in line with President Buhari’s vision for a country that produces what it consumes and grows what it eats. If you had to sum up our vision for the Nigerian economy in a few words, these would suffice. Grow what we eat, produce what we consume,” he said.

Prof Osinbajo commended Indorama for keying into the Presidential Fertilizer initiative which President Buhari launched last year to make fertilizers cheaper nationwide.

“At the end of last year, the President launched a Presidential Fertilizer Initiative, to ensure the availability of cheaper fertilizer to our farmers, to support what we’re doing in agriculture, in the production of rice and wheat and other staples.

“That Fertilizer Initiative, now well underway, has created significant economic opportunities for companies like Indorama Eleme Fertilizer & Chemicals Limited.

“I have been informed that Indorama will this year alone supply about 360,000 Metric Tons of Urea to Fertilizer blenders, which, in turn, will produce NPK fertilizer for the benefit of farmers across the country.

“This is the kind of economic progress we’re after, in which every unlocked opportunity proceeds to unlock several others, across multiple sectors of the economy.”

The acting President said that the Buhari administration will continue to support Indorama Eleme Petrochemicals Limited, which was privatised in 2006 by the Federal Government.

“We will continue to support Indorama Eleme Petrochemicals Limited’s expansion ambitions. Our commitment to the privatisation programme is equally assured, and we will continue to do everything to support investors to maximise the potential of their assets,” he said.

Earlier in his address, the Chairman of Indorama Corporation, Mr Sri Prakash Lohia said that the plant which has capacity to produce 1.5 million metric tons of fertilizer per annum is the largest single-train Urea plant in the world.

The Acting President also presented a Certificate of Discharge to the Chairman of Indorama Group, Mr Lohia and the Managing Director, Mr Manish Mundra for successfully accomplishing the post purchase agreement entered into with the Bureau of Public Enterprises on behalf of the Federal Government of Nigeria.

“Following the 2006 handover, the BPE carried out routine monitoring on the enterprise to ensure that the core investor adhered to and implemented the post-acquisition plan it had laid out for the company.”

“Today is the culmination of that process of monitoring and oversight by the BPE. I am delighted that it is taking place on an inspiring and hopeful note, and that we are all here today celebrating a thriving and promising company. We should not take this state of affairs for granted,” he said.

The Plant has a production capacity of 4000 metric tons (MT) of nitrogenous fertilizers per day or 1.5 MT per annum. The world-scale plant has been built with an investment of USD 1.5 billion, a huge Foreign Direct Investment, funded by the International Finance Corporation (IFC) and a Consortium of 15 European and African banks and Financial Institutions.

Governor Nyesom Wike of Rivers State, in his speech said that for Indorama to invest a whopping $1.5 billion in the state, it shows that the state is safe for investors and their investments. He called on other investors to emulate the footsteps of Indorama.

The fertilizer plant is well supported by Port Terminal at the nearby Onne Port Complex, and a Gas Pipeline of 83.5KM for gas supply.

The plant will bring about a green revolution in the agriculture sector not only in Nigeria but also in other parts of Africa and world at large.

Besides, making the fertilizer products to be available at affordable cost, the plant will boost crop yield to farmers and greatly help in minimizing the food grain deficit in Nigeria.

The plant has also generated lots of job opportunities contributing to the economic prosperity of Nigeria.

The construction of the plant commenced in April 2013 and completed in December 2015. The commissioning activities were concluded in March 2016 and the commercial production started in June 2016.

 

Jeweller Completes First Export of Conflict-Free DRC Gold

Partnership Africa Canada and Fair Trade Jewellery Co. on Monday announced the first export of conflict-free and traceable artisanal gold from the Democratic Republic of Congo to Canada.

The milestone comes a month after Partnership Africa Canada announced the Just Gold project had implemented a system to trace legal and conflict-free artisanal gold in DRC, with a proven chain of custody from mine site to exporter.

Fair Trade Jewellery Co., a Toronto-based pioneer in ethical sourcing, sustainability and retail, imported 238 grams in three gold doré bars to Canada.

Within days, the Toronto team refined, alloyed and designed four responsibly-mined and conflict-free artisanal gold rings. Each ring has been engraved with a lot number, which traces it to a specific mine site in the DRC’s Ituri Province, where the gold originated.

“Sourcing from Congo was a new and exceptionally ambitious process, but one to which our organization is committed to and capable of achieving thanks to partners on the ground, like Partnership Africa Canada,” said Robin Gambhir, Fair Trade Jewellery Co. co-founder.

“After more than a decade of ensuring that our materials are responsibly-sourced, we’re delighted to add Just Gold to the gold options we currently offer our clients. Ensuring we source fully traceable materials directly from communities is a way to foster community development, and as a company—deepen our impact on many stakeholders,” added Gambhir.

Partnership Africa Canada began the Just Gold project as a pilot in 2015 in Ituri Province. The project creates incentives for artisanal gold miners to channel their product to legal exporters—and eventually responsible consumers—by offering fair and transparent pricing and by providing capacity-building, such as technical assistance to miners in return for legal sales. Miners are taught better exploitation techniques and are offered Just Gold project equipment. In return, gold they produce must be tracked and sold through legal channels.

The project has over 600 miners registered across six sites.

As the project moves out of its pilot phase with a proven chain of custody from mine site to the exporter in DRC, Fair Trade Jewellery Co.’s move to import the gold is an important next step. The jeweller also collaborates with its sister company, Toronto-based software startup Consensas, to trace the gold from export to consumer.

“This export from Bunia, DRC to Toronto proved that it is possible to bring Canadian and international consumers traced conflict-free Congolese artisanal gold. What is particularly exciting is that we have shown that every gram of gold can be accompanied by reliable quantitative and qualitative data about its provenance and the actors involved in its extraction, production and trade,” said Joanne Lebert, Partnership Africa Canada’s Executive Director.

“Saying that it is impossible to carry out due diligence on gold supply chains is no longer a valid argument for industry. We have proven otherwise,” said Lebert.

Challenges faced during this export included high export taxes, transportation restrictions, and burdensome paperwork, will be used by Partnership Africa Canada to call on the Congolese government to create more favourable conditions for legal trade and responsible investment.

Funding for the Just Gold project is provided to Partnership Africa Canada by Global Affairs Canada, with additional funding by USAID through the Capacity Building for Responsible Minerals Trade (CBRMT) project and International Organization for Migration.

PwC Report Points To Impressive Mining 2017

According to PwC’s Mine 2017 report, the world’s Top 40 miners recovered from a race to the bottom, with bolstered balance sheets and a return to profitability in 2016, giving them much-needed space to pause and draw breath.

As it looks to the future, the 14th edition of PwC’s industry series analysing financial performance and global trends, also outlines the new opportunities and hazards on the horizon – and the impact of intransigent or innovative activity.

Mine 2017 was released by PwC Africa today at the Junior Indaba conference held in Johannesburg.

Michal Kotzé, Energy, Utilities and Mining Industry Leader for PwC Africa, commented: “The narrative of the Top 40 in 2016 tends to read like a mine site safety mantra: Stop. Think … Act. The industry has moved out of danger but 2016 was not a year of significant action, and we now wait to see who will be bold and step out beyond the fluctuating market confidence.”

The report analysed 40 of the largest listed mining companies by market capitalisation. The financial information for 2016 covers the reporting periods 1 April 2015 to 31 December 2016, with each company’s results included for the 12-month financial reporting period that falls into this time frame.

The number of emerging companies included in the Top 40 has decreased by two and now totals 17. There were seven new entrants from the previous year, five of which had made appearances on previous rankings in either 2014 or 2015. First Quantum and Teck Resources re-emerged on the 2016 list after strengthening their financial positions.

The report recognises a return to profitability in 2016, with an aggregate Top-40 net profit of $20 billion; after an aggregate loss of $28 billion in 2015. The improved fortunes of the industry were then directed to strengthening balance sheets.

Overall the market capitalisation of the Top 40 increased in 2016 by 45 percent to $714 billion, approaching the 2014 level. This was mainly due to rising commodity prices.

Revenue from the Top 40 remained relatively flat – up just one percent from the previous year’s sum of $491 billion – despite a rebound in commodity prices, particularly coal and iron ore in the second half of the year.

Capex fell dramatically again, by a further 41 per cent, to a new record low of just $50 billion. After hitting a near-record in 2015, impairment charges tumbled last year to a less-alarming $19 billion.

Debt repayments totaled $93 billion, up from $73 billion a year earlier, with most of the debt issued to refinance, rather than fund acquisitions or mine development.

Kotzé added: “We see an improved gearing ratio of 41 per cent, down from the 2015 record of 49 per cent. But this is still well above the 10 year average of 29 per cent. Interestingly, we also found that around half the capex figure was invested in sustaining activities, so the growth capital portion was strikingly small compared with previous years.”

Rapidly rising commodity prices sparked renewed market optimism and improved credit ratings across the Top 40 firms. Valuations also climbed, especially for the traditional miners, with the trend continuing through the first quarter of 2017 even as commodity prices remained flat. But, valuations aside, there is little to suggest that the group made any substantial advances throughout the year.

For the fourth consecutive year, the industry reduced spending on exploration. $7.2 billion was invested in 2016, barely one-third of the record $21.5 billion allocated in 2012, with the funds cautiously targeted at less risky, later stage assets, typically located in politically stable countries.

Lake Albert Gas To Facilitate Iron Ore Processing In Kigezi

 

The great Kigezi region in western Uganda will get a big iron ore smelting plant, president Yoweri Museveni told a political rally in Nfasha village, Kacherere Parish, West Rubanda constituency, Kabale district. 

Museveni who is seeking re-election as president of Uganda said the region is rich in mineral resources that can be exploited to transform and enrich the country. “Rubanda is rich in iron ore resources. The NRM Government wants to build a big iron ore smelting plant. 

The gas from Lake Albert will be delivered to Butogota and the neighbouring areas to facilitate the processing of iron ore,” he said, adding that the target was to produce and process one million tons of iron per day. 

The president revealed that the resources available were sufficient to cover a period of 45 to 50 years. The country, according to Museveni, would benefit a lot because the processed iron today fetches US $ 550 per ton. 

However, his competitor and former close ally, former Prime Minister Amama Mbabazi during a presidential campaign rally in Kabale district faulted his former boss for failing to make deliberate efforts to process the iron ore. 

Aerial geological surveys conducted by the Geological Surveys and Mines Directorate GSMD in Kigezi sub-region show that there are 200 million metric tons of iron ore deposits are in the region. This means Uganda can potentially get US$ 110 trillion. 

"Currently, we have over 200 million tonnes reserves of hematite iron ore in southwestern Uganda and 60 million tonnes of magnetite iron ore in the south eastern part of the country and still have huge potential for exploration,"  Francis Natukunda, a senior geologist at Uganda's Department of Geological Survey and Mines, is quoted by New Vision saying.

According to Natukunda, if the iron ore is extracted, it would not be exported, but rather used domestically to fuel demand for steel in the construction industry. Uganda banned iron ore exports in 2012. 

“Uganda’s geographical position gives it access to over 500 million people, including COMESA and SADC and the recent population surge in the countries forming these regional blocks will trigger demand for construction materials from our industries,” state minister for investment, Gabriel Ajedra Aridru told a sector conference in Kampala last year. 

Iron Ore is a key raw material in making steel. Local steel makers like Roofings have shown interest in making significant investment into exploration, mining and processing of iron ore to add values and eventual exportation.

Museveni said his Government would extend electricity from the Muko junction off the Kabale – Kisoro road to benefit a number of places in the area including Muko, Nfasha, Rubanda Mission, Ikumba Health Centre,nBugyera, Ruhuriza and Kiyabe.

 

 

New Mining Set For December Parliament Debate

A new mining law to be debated by parliament starting December promises to improve the environment for investment and generally enhance Uganda’s mining sector.

“We hope to have a new law for debate in Parliament by December,” Peter Lokeris, the State Minister for mineral development told the annual general meeting of the Uganda Chamber of Minerals and Petroleum (UCMP), an outfit that brings together players in the petroleum and mining sectors last week.

Hon. Lokeris said the new law is part of an ongoing review of Uganda’s fiscal and regulatory framework intended to “reshape the future” of the country’s mining sector.

Government has been reviewing the Mining Act, 2003 and Mining Regulations, 2004 to align them with the revised Mineral Policy

The reviewed framework aims to address several issues that have haunted the sector including; conflicts over competing land uses, the rise of unregulated artisanal and small scale mining activities and the inadequate enforcement of health and safety provisions.

The new framework also aims to increase productivity and the creation of new mines by establishing financing mechanisms for artisanal, small scale and large scale mining. It is hoped that the new policy will further improve mineral revenue collection and management and usher in a transparent competitive bidding system.

UCMP’s Chairman, Elly Karuhanga, welcomed the review as part of the continuous efforts by government to create a favourable environment for investment in extractives.

“The review of the laws and regulations for the mining sector, removal of taxes on exploration for oil, gas and mining investments and the continued energy and infrastructure development efforts are all the much needed interventions to address the bottlenecks in our sector,” Karuhanga told the meeting.

Karuhanga also hailed government for heeding calls by UCMP to reconsider the ban on mineral exports, which he said had affected the sector. President Yoweri Museveni lifted the ban in August this year.

SOURCE: Oil In Uganda

Mining Policy, Law And Taxation Review Progressing Well

The Ministry of energy and Mineral Development (MEMD) is in the process of reviewing the mining legislation. Consultative meetings to review the Mineral Policy, Law and taxation are being held to collect ideas and other necessary input.  

 

With technical Assistance and support of the World Bank, the Ministry has compiled the views of selected Ministries and Government agencies and those of the Industry, Civil Society and other Stakeholders in form of a Green Paper for the Minerals and Mining Policy for Uganda.

It summarizes the problem, issues and needs of stakeholders. The revised document will then be put on the MEMD website for public comments. The Ministry is now preparing a Cabinet Memorandum to submit the Policy revision proposal and policy principles to cabinet to take a decision for approval.

 

 Mining in Uganda

Uganda lies within the African plate, which is a continental crust that contains Archaean cratons that date at least 2700 Ma. The country’s geology is endowed with a wide variety of minerals.

Mining involves extracting and processing economically valuable minerals. Many minerals are mined in Uganda, including gold, tin, gemstones, limestone, clay, salt and stone aggregate.

However most bits of mining are carried out by artisanal miners who are not well equipped. There is no commonly accepted definition of artisanal and small scale mining (ASM), because it can have very different characteristics at every site!

The country's mining history is recorded in the 1920s with work done at southwest Uganda's tin and tungsten deposits. In the following decade, gold mining began near Busia.

In the 1950s, the Kilembe copper mine was developed and it became the country's largest mine. The 1950s and 1960s was an important phase for mining when it had a 30 percent contribution to the total exports of the nation.

During the late 1980s, laying of roads led to increase in demand for construction material. The National Mining Commission was formed in 1988. North Korea financed the Ugandan government's project to rehabilitate the Kilembe copper mine.

Mineral Wealth Conference To Address Value Addition In sector

Uganda Chamber of Mines and Petroleum (UCMP) will this week on Thursday at Sheraton Hotel Kampala kick off a two day Mineral Wealth Conference where issues of value addition are high on the meeting’s agenda.

 

About 400 delegates from different parts of the world will be in Kampala to attend the fourth annual Mineral Wealth Conference (MWC), come October 1st and 2nd, 2015 in Kampala. They will be looking at how they can invest in Uganda’s mining sector.

The theme of the conference is “Minerals Value Addition – Road to Development”, a subject which Richard Kaijuka, the UCMP Vice Chairman, said ‘calls for focus, determination and hard work” and that it ‘it will not happen overnight’.

Uganda enjoys a wealth of minerals ranging from gold, copper, iron ore, vermiculite, tin, tantalite, tungsten, nickel, platinum, phosphate and others which are yet to be fully exploited to their full potential. The conference is one of the efforts in the direction of full utilization of the natural resources.

 

Kaijuka speaking at a press conference said Uganda is confident to add value because it has been done before elsewhere even if the road is long. To establish a large scale mine by world standards, at least $5m to $100m is needed in the exploration process – from discovery to proving feasibility.

 

However, due to a fall in metal prices and a global economic downturn, exploration expenditure has plummeted by at least 30% worldwide with an additional 15% to 20% decline in exploration investment in Africa predicted in 2015 and beyond.

 An estimated 90% of junior exploration companies that existed in 2010 are no more; hence there exists a very strong competition for this highly risky capital globally.

 

Fortunately for miners eyeing Uganda, value added tax on exploration activities was scrapped this year after endless lobbying by the UCMP.  A ban on mineral exports was also lifted recently by President Yoweri Museveni, further encouraging more investments in the sector.

 

“These developments have been very exciting for not only members of the Uganda Chamber of Mines and Petroleum but also for the country at large,” said Kaijuka, adding “We are particularly encouraged by the government’s review of the laws and regulations governing mining that has made the legal regime truly user friendly for investors.”

 

Dr. Zwelini Mkhize, the Treasurer General of the African National Congress (ANC) in South Africa, and also a former premier of KwaZulu-Natal, will deliver the Keynote Presentation at the MWC2015.

 

The conference is organized by UCMP in collaboration with Ministry of Energy and Mineral Development, Ministry of Foreign Affairs, Africa Mining Network, Win Win 4 Africa Consultancy & African Legal Support Facility.

The two day conference is sponsored by partners such as Zakhem International Construction, the Democratic Governance Facility (DGF), Stanbic Bank, Hima Cement, Barclays Bank, AON Uganda, ENS Africa, Standard Chartered Bank, Swala Energy, Tororo Cement, United Bank for Africa (UBA), UAP Insurance, Threeways Shipping and Askar Investments.

 

The annual MWC is fast becoming East Africa’s flagship mining convention; playing a significant role in highlighting the huge untapped potential of Uganda’s and the region’s fledging mining industries.

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