Global Outlook On The Mining Industry

Without Mining Life as we know it would not exist. The smart phone that you’ve got in your hands has 76 different minerals in it. In Economic terms the Mining Industry represents 8% – 10% of the world’s Gross Domestic Output. The service industries that support the Mining Industry contribute around 18 % to Worldwide GDP. Products produced by the Mining Industry and the critical importance they have to other industry (Mining) directly or indirectly drives 45% of the Global Economy.

Mark Curtifan, CEO Anglo America.

Africa’s Mineral Industry is the Largest in the Word. The world’s second largest continent has some 30 Million Square Kilometers of Land with large quantities of Natural Resources, most remain untapped. Africa ranks first or second in quantity of world’s reserves in Bauxite of aluminum, Cobalt, Industrial Diamond, Phosphate, Platinum, Vermiculite, Zirconium, and Gold. Overall the Continent Accounts for about 30% of World’s Mineral Reserves. Africa’s Mineral wealth has long made the Continent a Destination of choice for resource hungry Investors. As of 2005 Strategic Minerals and Key Producers. Share of Word’s Production from Africa Soil Raked as follows; 46 % of World’s Diamond, 21% Gold ; 62% of Platinum Palladium; 16% of Uranium, 9% of Bauxite Aluminum, 2% Steel, 5% Aluminum and 13% of World’s Mineral Fuels Including Coal and Petroleum.

East Africa boasts a significant share of Africa’s Mineral and Energy Wealth resulting from to its Geology setting and Subsequent Mineralization. Therefore the region offers Investor Lucrative development opportunities from its Diverse Commodity Portfolio. Natural Resources remain one of the Key Pivots of the Global Economy as Metals and Mineral Produce the Raw Material that Facilitate Industrialization, Urbanization and Globalization. In turn raw material Extraction, processing and transportation is strongly correlated with Energy Consumption.

By the First Quarter of 2015 commodity prices had fallen to a 12 year Low. According to a Bloomberg Commodity index composed of 22 Agriculture, Energy and Metal prices, the index dropped by 1.6%, the Lowest since 2004. The Gauge declined by as much as 17%, the most since the 2008 Global financial crises. The fall is attributed to a Number of Factors including oversupply in the Market, a demand slowdown particularly from china and the Euro zone and a Strong Dollar.

But despite this drop, Investors should take a Long term view on Mining and Energy when taking Investment decions. The reason for this is mainly because the Decline in Commodity is mainly attributed to Commodity Surplus and Economic slowdown in China and the Euro zone. Still the IMF Projections for the Global Economy points to a gradual pick up as the growth is expected to strengthen to 3.8 per cent in 2016. The Mining Industry is currently going through a Production and Export Phase, Mineral Exploration however has been on a decline since the Global Financial Crisis due to Capital restraints, as the Global Economy growth heads to an upward trajectory, the Demand for Energy and Raw Material is Expected increase eventually. However as Mineral Exploration remains suppressed, there is fewer and fewer mines coming on stream to replace depleting reserves in Mature Mines raising concerns over current Discoveries not being able to keep up with Demand in the over the next decade.

For some Exploration and Mining Companies the recent Slump is an Opportunity to acquire High Value Assets at Relatively lower Cost Resulting from subsequent Divestments due to pressure to Slash Capex. Long term Survival of Mining Companies is directly dependant on Successful Exploration and Discoveries. It is recommendable for Investor to cease Existing Investment opportunities within the Mineral and Energy to Invest in Exploration projects that are Critical to Sustaining the future Commodity supply chain in replacing the depleting resources from mature mines.

Mineral Resource Development Opportunities

Tanzania’s Lake Victoria Gold Area (LGVA)

The World class Lake Victoria Gold Area is the second best in Africa only Surpassed by Barberton Greenstone Belt is South Africa. The Lake Victoria Gold Area also known as LGVA is hosted by the Tanzania Cartons, a Geology structure that resulted from the Great Rift system when Ancient continental mass broke up Billions of year ago. LGVA Boast an estimated 130 Million ounce of Gold of which only 4 % has been exploited.
The LGVA has 9 Major Greenstone covering an Area of ( ) that hoist 6 Major Gold Mines operate by three Multinational Mining Companies Namely AngloGold Ashanti, Barrack Gold and Resolute that Produce an Approximately 40,000 ounces of Gold Each year. In 2014 Tanzania Export Gold worth 1.3 Billion Dollars making it Africa’s 4th Largest Gold producer behind South Africa, Ghana and Mali. Tanzania Also Host Significant Foreign Junior Exploration Companies Currently Exploring for Gold in Its Vast.
Opportunities in Gold Exploration in Tanzania is Extensive as the Country posses a Broad Geologic and Mineral Database which is virtually complete work done since the mid 1930s. Tanzania Gold Occurrence is Orogenic hosted by Greenstone and Banded Iron Formation; Orogenic Gold Deposit is the Most Significant Gold Clan out of a population of 103 deposits of Gold recognized globally. Fraser Institute of Canada Considers Tanzania Geology Setting its best Assets in Attracting Investment as a Mining Jurisdiction.

Kenya is the New Heavy Mineral Sands Frontier

Kenya has Emerged s the Next African Mining Frontier Following Vast Titanium Discovery and the Establishment for the Country’s First Ever Major Mining Project; Base Titanium’s The Kwale Mineral Sands Project. The Grand Project has an Estimated Measured 123 Million tons of Titanium with a Capacity to Produce 1.4 Million each Year. Base Titanium Exported its First Shipment of 250,000 of Titanium to China in February 2015. The Company Projects that it’s 2015 Full year Production will put Kenya among Top ten Titanium Dioxide Producing Countries in the World.
Kenya’s Coastal Belt Geology is one of Great Significant the Mining & Metals Sector. This Region is dominated by the Mozambique Belt, which largely defines the Southern Part of East Africa’s Orogen. Mozambique Belt resulted from collision between East and Western Gondwana during the Proterozoic age. High – grade gneiss, granulites and magmatites metamorphosized during these Events Forming Basement of “Karoo” systems Rocks Lithostratigraphical Unit. These Rocks are Know to Host Heavy Sands Minerals Deposit that contain Large Volumes of Ilmentile, Rutile (Titanium), Zirconium as well as trace Elements that could be.
There’s Enormous potential untapped heavy Mineral resource in Kenya’s Coastal Belt. Base Titanium Estimates show that Kilifi County has 10 times more titanium that Kwale. Kilifi’s Titanium resource is Approximately 1.4 billion Tones Inferred in Vipingo, Mamburi and Sokoke area that covers up to 450.7 Kilometers square.
Prospects for the Nascent Mining Industry Look up as the County prepares to pass the New Mining Legislation Act that will set out Clear Guidelines for the Kenya’s Mining Industry that is Fundamental to give Investors Confidence in Mineral Firm Admistration Policies. Kenya has also Engaged Mackinsey Consultant to prepare a 20 Year Mining Strategic Plan.

Kenya is the Next Niobium Global Frontier

Kenya is poised to become one of the Largest Rare Earth Elements in the World following a Huge Rare Earth Elements Discovery by Cortec, a Subsidiary of World cat pacific in Mrima hills in the Coastal town of Kwale. Cortec announced that it had Discovered Rare Earth Elements (REE) worth a staggering $62.4 Billion Dollars and Niobium worth $ 35.0 Billion Dollars making this by far the Largest Mineral Discovery in Kenya.
A Global Scarcity of Rare Earth metals is Largely controlled by China which has kept the Prices high, with Japan accounting for a third of the Global demand, hit hard by scarcity it is now looking to Diversify its supply sources. China has been Supplying 90% of the world’s most rare Earth Metals for over a decade and is also the Largest Consumer. Global Demand for Niobium is used to strengthen steel and is rising rapidly, with Mrima Hills now positioned at top six World’s Deposits.
At present the highest commercial value application for REE is their use to manufacture permanent magnets. Praseodymium and Neodymium are the principal REEs sued in the process. These Magnetics can be used in Electric motors and therefore engines can be considerably smaller and lighter in weight. With Depletion of Oil & Gas reserves as well as call to cut carbon emissions, Hybrid Engines take on a greater share of Energy Burden and our reliance on REEs will increase. A Plethora of Political commitments have been, in some part require deployment of Technology including Rare Earth Elements.
Phosphor compounds are used in manufacturing LED Screens and like, the Second largest commercial REE Market. Rare Earth Elements is an extremely strong growth sector. With Global demand for products containing REE likely to increase, the search for new Stocks of REE ore has assumed huge Economic Significance.

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Overview East African Mining Sector

East Africa is an Area of remarkable Geomorphologic appeal. Kenya, Uganda, Tanzania, Rwanda Burundi and Mozambique are all in the East African Region.

East Africa Lies on the African Plate, one of the Earth’s Larger Slabs of the Continental Crust. The African Plate contains Achaean cartons over 2.5 Billion years, which preserve evidence of rock – forming events shortly after solidification of the Earth’s Crust. These rocks are contained in Geological units from the Achaean, Proterozoic, Paleozoic, Mesozonoic and Cenozoic Ages. The Rocks in the regions Carton is highly mineralized and is broadly similar to the Zambian, Zimbabwe (Rhodesian) and Kaapval (South African) Cratons.

Sitting on Such a Magnificent Geology, not surprising East Africa has some of the World’s Richest Mineral & Energy resources.

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