Feb 22, 2008
Engineering|Africa|CoAL|Eskom|Exploration|Mining|Africa|Kenya|Energy|Oil And Gas|Power Generation|Power-generation|Infrastructure|Power
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Maggs: You say that Uganda has struck oil and will begin producing its first barrels mid-year.
Creamer: That’s right. Uganda has struck oil in the western side of the country and it will be producing by July, they say. This is the result of early exploration there. They say that it is a relatively small section that they’ve struck oil in and will produce something like 300-million barrels. Uganda’s Minerals Minister reports that the good news is that there are seven other prospects.
The company has now compiled a new oil and gas policy and has invited bids for explorers to come into the area. These bids are being evaluated as we speak. Also, oil is on the agenda in quite a big way in Uganda because of the troubles in Kenya. As a result of the problems in Kenya, they have actually decided to put up their own oil refinery.
So quite a few oil activities in Uganda.
Maggs: Anglo American teaming up with the China Development Bank to search for mining opportunities in Africa. Should we be surprised?
Creamer: It is quite a good combination, because here we have Anglo American, one of the oldest mining companies in Africa, born in South Africa, and then we have the China Development Bank, which is now an expert at rolling out infrastructure. It is an all embracing infrastructure provider and, of course, State-owned.
You have these two combinations coming into Africa at a time when Africa is desperate for additional infrastructure in order to leverage the wealth of Africa. You have got to have that infrastructure because it always lowers the cost of mining. The two coming in together present quite an awesome scenario, if it can gel. The new CEO of Anglo American, Cynthia Carroll, spoke quite enthusiastically about it this week, in reply to some analysts in London.
The outlook is that they should be working together, because quite soon, even perhaps effecting South Africa, because she spoke of Anglo’s need to look at its own power generation in some instances, because of the power crisis here. One of the very innovative ideas, she said, is that she would possibly consider towing in a power barge and mooring it in one of our harbours. She said she is speaking to China about that and, “we’ll see what comes up,” she said.
Maggs: Let’s stay with mining, and Rio Tinto has discovered a billion tons of coal in South Africa’s Limpopo Province.
Creamer: Yes, another very large mining company, Rio Tinto, is enlarging its profile in Africa and Southern Africa and doing quite a bit of exploration for coal in the Limpopo province and coming up with a discovery in the Soutpansberg coal basin. More than a billion tons have been unearthed there and they say that they can recover 40% of that for a power station.
They are looking now at feasibility of establishing a mine there, but linked to a power station. They are talking with the State-owned Eskom, but they also make a point of saying that they are talking with independent power providers. We can see, possibly, an entry of the private sector. We have noticed the private sector entering the power generation field across the border in Botswana, in the Mmamabula coalfield there.
CIC Energy is wanting to put up a large mine, but also a very large power station and a type of Sasol. So, ambitious activities on the border and the latest statement from CIC Energy is that, according to their calculation, even if Eskom put in these additional 16 000 MW, there is still going to be a regional power deficit. This gives opportunity to others to enter the fray and now Rio Tinto is looking at that.
Maggs: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us at the same time next week.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
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