Printer Friendly

MINING IN AFRICA: THE PROS AND CONS with special reference to the situation in West Africa.

Managing Director, Bureau of Geological Consultancy (Bugeca) Braine L'Alleud, Belgium [*]

In the field of mining, as in practically all others, Africa cannot be treated as a whole. Based on culture, colonial heritage, and economic stability, it must be divided into groups of countries or even treated country by country. Generalizations mask significant differences among African countries.

For example, the history and current economic and political situation of the Republic of South Africa make it so different from other countries on the continent that it will only be dealt with in passing here.

A huge inequality exists between the countries that are members of the Southern African Development Community (SADC) and those that belong to the Union Economique et Monetaire Quest-Africain (UEMOA)--or between the North and the South. For example, the SADC countries have double the GNP/inhabitant/year of the UEMOA countries ($2,485 versus $1,185). Among these countries, South Africa ($7,450), Botswana ($7,390), and Namibia ($5,390) are the leaders and their GNP per capita is comparable to the Maghreb countries of North Africa: Algeria ($4,260), Libya ($6,125), Morocco ($3,320), and Tunisia ($4,550). The Maghreb countries combined have a GNP per capita of $4,570 and the three southernmost African countries have a GNP per capita of $6,740.

Mining investments, values of mineral production, political stability, competitive fiscal regimes, and economic growth are concentrated in southern African countries (if the recent developments in Zimbabwe do not disturb the stability of the entire subregion) and in Morocco. In most of these states, the rule of law also prevails (with the exception of Zimbabwe).

Giant African Mineral Deposits

The mineral production of exceptional deposits in huge geological complexes (Witwatersrand Basin, Bushveld Complex, and the Copperbelt) represents in value 25% of the total African mineral production.

Is there any chance of finding other such giant mineral provinces?

The Great Dike of Zimbabwe is similar to the Bushveld complex of South Africa and contains huge reserves of high-quality chromite and PGMs. In Botswana, geological understanding and modelling may lead to the discovery of another mineralized sedimentary basin similar to the Witwatersrand and the Tarkwa basin in Ghana. In Burundi-Tanzania, the nickel-bearing ultramafic bodies are now considered as corresponding to a layered intrusion, similar to the Bushveld Complex.

The most unique setting of mineral concentration, however, is certainly the Copperbelt in Zambia and Katanga (Congo), with, apart from copper, its associated mineralizations of cobalt, zinc, germanium, and uranium.

When early Belgian colonists, assisted by British and Australian geologists, began the exploitation of the rich copper oxide ores in Katanga, they did not know the nature of the high-grade copper deposit from which they were extracting ore. All the mines were soon under the control of Union Miniere du Haut Katanga (UMHK), which established rules and regulations under the colonial regime. Geological investigations progressed under the supervision of the company's chief geologists. They decided upon the origin, the geometry, and the structure of orebodies. Junior geologists followed the pattern drawn by the paternalistic company or risked losing their jobs. The sedimentary origin of the copper and cobalt was an axiom no one could deny or question. The deposits were so rich that UMHK did not need further exploration, and the work of geologists was limited to supervising the drilling and controlling the grades. Even when volcanic rocks were discovered in the sedimentary sequence, nobody paid attention, as the mi neralizations were assumed to be sedimentary in origin.

Today, as in the Witwatersrand basin, many scientists believe the quantity of metal (copper and cobalt) present in the Copperbelt cannot be accumulated by just sedimentary processes alone, and that hydrothermal mineralized fluids must have carried a large part of the metal stock.

The origin of these hydrothermal fluids is still unknown but might be found in Zambia, where the sedimentary cover is thinner and porphyry copper deposits are known to exist in the basement rocks underneath the mineralized sediments.

If this turns out to be true, the Copperbelt might not be unique and equivalents could be found somewhere else in Africa or in the Gondwanaland paleocontinent.

The rocks affected by the Panafrican orogenies cover larger outcropping areas than the Archaean and the Lower Proterozoic rocks in Africa. Most of them exist in the less explored regions of the continent. Their their importance in terms of mineral potential is only now being realized.

Success Stories

With regard to new mining developments, three countries stand out: Ghana, Tanzania, and Mali. Ghana and Tanzania are the two African countries where most of the Australian junior mining companies are active. These new investments are mainly for gold. The three countries have some features in common: Gold in greenstone belts; deep weathering and oxidation, permitting open-pit exploitation; leachable free gold; and low cash costs.

New base metals developments are in the pipeline, however--in Namibia, South Africa, Morocco, and Tanzania.

In Ghana, a number of junior companies (36 prospecting/reconnaissance licenses have been issued) are exploring the Birimian (greenstone) belts and are discovering substantial new gold deposits. Ghana has made considerable efforts to attract foreign investment for more than a decade, and the mining administration is certainly one of the best on the continent. Improvements should be made in producing new geological maps to boost mineral exploration in regions and districts other than the ones in operation today.

In 1998, Ashanti Goldfields Group produced 38.7-mt Au, and the other Ghanaian mines, 35.6-mt Au, up from 1996 and 1997.

The Damang gold mine opened in October 1998 (90% Ranger Minerals) with a production capacity of 280K-oz/yr Au. Wassa gold mine (Glencar Resources) produced 130K-oz in 1999 at a cash cost of $145/oz. Resolute's Obotan gold project produced 150K-oz in 1998 at a cash cost of $162/oz.

The country has a centuries-old tradition of alluvial gold diggings by the locals (the Ashanti and Akan Kingdoms). Since 1897, Ashanti Gold Fields has produced more than 700-mt Au. Since 1912, Tarkwa has produced more than 200-mt Au. The country is the second gold producer in Africa, with 78.2-mt in 1999. All the gold is contained in the Birimian rocks, Lower Proterozoic in age, extending from southeast to northwest in three to four elongated belts.

In Tanzania, the Archaean greenstone belts near Lake Victoria have received particular attention by many junior companies. This has resulted in the discovery of several new gold deposits, some of which are now in production. Barrick, Ashanti, and AngloGold have purchased or became majority shareholders in many of the junior companies. In 1998, Golden Pride (Resolute) was the first gold mine to come into production (forecast to produce 180K-oz/yr Au). Other mines due to come on-stream in the near future are the Geita/Kukuluma project (Ashanti), Bulyanhulu (Barrick), and North Mara (Afrika Mashariki). Bulyanhulu (resources estimated at 8.8M-oz Au, with an ore grade of 11-g/mt) is probably the largest and the richest gold deposit in East Africa.

The Kabanga nickel project is progressing and the new resource estimates are 21.3M-mt grading 2.18% Ni, 0.27% Cu, and 0.16% Co.

In 1998, a new mining act was approved by the parliament, replacing the old socialist-inspired Mining Act of 1979.

An industrial gold mining tradition goes back to colonial time (Geita and Cannuck mines). In 1999 the country produced 9.2-mt Au.

In Mali, AngloGold is operating the Sadiola gold mine with an annual production of some 15-mt. It is one of the lowest-cost operations in the world (total cash cost: $108/oz). AngloGold is also developing the Yatela gold deposit, just north of Sadiola. Randgold reopened Syama at the start of 1999 at a cash operating cost of $210/oz. At Morila, the resource has increased to 21.7M-mt grading 4.58-g/mt. Production by the new consortium AngloGold/Randgold is planned for 2001. The Nevsum company, in the meantime, obtained a mining license for its Tabakoto project.

The country has a long gold-digging tradition that dates back many centuries B.C. Gold was exploited in the Bambuk kingdom (where the Sadiola mine is located) and transported to the Mediterranean region. "Gold is so common in the Bambuk kingdom than to find it, it suffices to scratch the soil." The reference is from Buffon (1792) and was possibly the first applied geochemical exploration test.

In 1999, Mali produced 25.4-mt Au. French prospectors worked the Sadiola and Kalana gold occurrences in the early 1930s. Syama was the site of ancient intensive diggings; only Morila had not been exploited before.

Ghana and Mali's total gold production comes from the Lower Proterozoic Birimian greenstone belts occupying a surface (at least, for the auriferous volcanic portions) of almost 300K-[km.sup.2] (see Table 1). In 1998, the gold total production from the Birimian rocks amounted to some 123-mt.

Exploration For New Targets

If one compared mineral exploration budgets in Africa with those for other continents (Table 2), it is clear that Africa lags far behind, especially compared to Latin America. African figures are, however, on the increase, but the larger part of the budgets is concentrated specifically on gold and diamond exploration.

In 1998, the world total mineral exploration expenditures were down to 1995 levels. Latin America remains the preferred area (31%), followed by Australia (19%) and Africa (19%), Canada (12%), Pacific/Southeast Asia (10%), and the United States(9%).

The total amount spent in mineral exploration/[km.sup.2] in Africa is $17 against $63 in Australia, $31 in Canada, $26 in the United States, and $46 in South America.

Country by country, mineral exploration expenditures, in 1997 and 1998, in $/[km.sup.2], are distributed among the most prospective countries as shown in Table 3.

In the past, as now, most of the grassroots exploration programs were financed by multilateral aid agencies such as the United Nations and the European Union. Most of these programs initially were aimed toward finding base metals, but since 1984, the focus has shifted to gold.

Prior to independence, the colonial empires had built up excellent geological surveys in most of their colonies. Exploration was carried out by private companies or consortia. In Francophone Africa, however, the mining industry was controlled by the state and exploration was carried out by state-controlled companies (Bumifom and, later, BRGM).

Apart from the Republic of South Africa, gold production took place in the Gold Coast (Ghana), the Belgian Congo (DRC), Upper Volta (Burkina Faso), Tanzania, and Southern Rhodesia (Zimbabwe).

Other commodities being exploited in Africa included:

* Iron ore in Mauritania;

* Copper and cobalt in the Belgian Congo and Northern Rhodesia (Zambia);

* Diamonds in southwest Africa (Namibia), Angola, the Belgian Congo, Tanzania;

* Bauxite in Guinea;

* Phosphate in Senegal;

* Manganese in Gabon, the Gold Coast (Ghana), and Ivory Coast;

* Uranium in Gabon, southwest Africa and Niger;

* Cassiterite and tantalite in the Belgian Congo and Rwanda;

* Zinc in the Belgian Congo, Northern Rhodesia (Zambia), Tanzania, and southwest Africa.

When most of these countries became independent, their financial resources were not sufficient to sustain and strengthen the exploration and mapping programs.

When support from local governments diminished, and foreign private exploration investment was unavailable or unwelcome, various international, multilateral, and bilateral agencies stepped in to help fill the gap. The results of their activities are dealt with separately in this article and also in the section that pays particular attention to recent successful exploration and mining developments in the West African region.

Cultural and Historical Background

African cultures are rich and very complex. Africans have kept intact their traditional ways of life dating back centuries despite contact with Moslem invaders and traders, and later with the Europeans. Most of the Africans who came into contact with the Moslems adopted the Islamic religion but they retained their ancestral culture and traditions. Christianity was introduced later, and, as with Islam, it represents an outer layer on top of traditional beliefs.

It is therefore difficult for those brought up in a Cartesian- and Christian-based culture, such as that of Europe or its offshoots elsewhere, to understand the complexity of the African mind. There is also the hurdle of language.

Until the second part of the 19th century, there were no real (industrial) mining activities in Africa, although evidence of local artisanal mining date back many millennia. In other continents, industrial-scale mining activities took place centuries before. In South Africa, diamonds were first discovered in 1867 and gold in 1853, but industrial production began only in 1880.

Ashanti, in the Gold Coast (now Ghana), started industrial exploitation of gold in 1897. In Southern Rhodesia (now Zimbabwe), thousand of prospectors started small mines before the end of the last century. Only in the early 20th century did industrial-scale copper production start on the Copperbelt of Northern Rhodesia (now Zambia) and in the Belgian Congo (now DRC). In Southwest Africa (now Namibia), industrial production at the Tsumeb polymetallic deposit started in 1906.

It can be said that industrial mining in Africa is only 100 yr old and that it was developed by South African and European companies under colonial regimes. Most of Africa lacks a mining tradition.

Colonial times in Africa were influenced by two main systems: the British and the French. The Belgian and the Portuguese colonial systems were somewhat different.

The British colonial system was characterized by traders and by the private sector's presence. The British government supported excellent geological surveys that produced good geological maps. After independence, the new local governments had difficulties maintaining the former standards of these surveys, but even today they still produce remarkable technical results.

The British introduced their common law system.

The French colonial system was characterized by military conquest and state-controlled economy and industry. Geological surveys existed, but after independence they were almost completely abandoned by the ex-colonial power. Geological mapping stopped and almost no new geological maps were produced.

The French introduced their code of civil laws.

At the time of independence, most of the new governments selected a socialist regime and some turned directly toward the Soviet Union for assistance. In the Francophone countries, communist/socialist regimes were grafted on top of the state-controlled economy left behind by the colonial power, increasing the presence of the state in all activities. The belief was that the state had to provide jobs and a guarantee against poverty for everyone.

In the ex-British colonies (Ghana and Tanzania, for instance), the people accepted the new socialist regimes imposed by an elite minority. But the Ghanaians and Tanzanians remained individualists and developed their own small businesses. A new generation of young graduates started to come home with degrees from the former East Bloc universities. They became involved in government responsibilities, and many of them are still leading the countries today.

Since the fall of the Berlin wall, a new generation of young graduates is coming back with degrees from Western universities. They are founding modern businesses, but their influence on government will possibly take another 10 yr to develop (that is, before the "old guard" is replaced).

The artificial frontiers drawn by the colonial powers are generally accepted, but nomadic tribes still cross them without paying too much attention to their existence (the Tuaregs, for example). Despite that, with tribal territories being divided by artificial frontiers, it is surprising to note that each individual new nation has developed a strong nationalism. Frontier clashes are common, but civil wars among tribes living in the same country, for supremacy or to settle old scores, are even more common (Sierra Leone, Rwanda, Burundi, Congo [Brazzaville], Congo [Kinshasa], Sudan, Eritrea/Ethiopia, Angola, Mozambique, Zimbabwe, etc.).

In the 1980s, when liberal economic regimes were introduced in Africa and other continents, the Africans had difficulties in adapting to this new way of life. Ghana, and more recently, Tanzania, were the exceptions. All the other nations were still very much state-oriented, nationalist, and socialist.

They are all reluctant to assign exploitation rights to foreigners, and many want to keep some control through free equity and a director's chair on the boards of the new mining companies. When negotiating with private companies, suspicion that the companies are intent on robbing the country's riches is very strong. Suspicion is prevalent even when countries try to improve their fiscal regimes and their mining codes. If they make a concession here, they will always want to recover what they consider a loss somewhere else. The net result is no improvement at all in the fiscal regime, and the mining code becomes so complex than it loses its transparency.

Corruption exists everywhere and at all levels of the bureaucracy. Traditionally, a foreigner (both non-Africans and persons of other tribes) wanting to cross a tribe's territory paid a tribute to the local chief, either in cash or, in former times, in the form of cattle, gold dust, or other useful commodities. Who are the chiefs today? Clearly, they are people in the government hierarchy who are invested with some authority. Therefore, some sort of gift is always expected for any act under his control. Is this corruption or the survival of the old traditional culture?

Real corruption, however, exists and is increasing. One reason for the increase, at the level of the ordinary civil servant, is the latter's very low salary, which he often receives after months of delay.

Corruption also exists-at the highest levels and here the sums of money skimmed off by unscrupulous high-ranking officials are such that it impoverishes the entire nation for many years. The African paradox is to have some of the richest men in the world governing some of the poorest countries in the world.

The two African countries where, according to Transparent International, corruption is the highest are Cameroon and Nigeria.

Civil wars have been partly financed by the sale of diamonds in countries where their exploitation is in the hands of warlords (Angola, DRC, Sierra Leone, Liberia). International media have condemned diamond-buying centers such as Antwerp, but they do not point the finger at the countries or the organizations that sell, for huge profits, the armaments to the belligerents.

Other human inadequacies include: 42% of Africans are illiterate; only 4.3% of GNP is spent on public education; primary school enrollment is very low; illiteracy extends into the civil service; governments depend on aid programs; transition to democracy is not smooth; and 51% of Africans live on less than $1 a day.

Health Problems

The African continent has the lowest life expectancy in the world, the highest child mortality (in 1997, 150 per 1,000), and the lowest access to safe water.

Because of inadequate response to fighting the HIV/AIDS epidemic, life expectancy at birth has been decreasing since 1990. Once it started to spread, HIV moved fast; it took only 19 yr to affect 40% of the adult population in countries exposed to this virus. In South Africa, the infection rate is now 20%; in Botswana, it is 36%.

At a recent conference in Durban, South Africa, it was reported that 8.6% of all people of sub-Saharan Africa are HIV-positive or have AIDS. Child mortality is rising and orphans pose a burden on society.

The mining industry is heavily affected by HIV/AIDS. The effects of sickness, absenteeism, and turnover on the work force negatively influence productivity. Total mining labor costs are higher in Africa than on any other continent. AIDS will have a greater impact on Africa than any other disease, drought, war, or financial crisis. "How do you manage a company when one-third of your workforce will be dead in five years?" said Craig Andrews of the World Bank.

Activities of the U.N. and Other Agencies in the African Mining Sector

The United Nations, which was created at the end of World War II, became concerned by the lack of investments in the newly emerging African nations, investments that would be needed to vitalize their stagnant economies. Many of these countries had adopted a socialist regime and nationalized their industries, and in particular their mining industries (Gecamines, ZCCM, Stamico, SNIM, etc.).

The governments neglected geological investigations, and most of the national geological surveys became inactive, especially in former French colonies. The United Nations started the United Nations Development Program (UNDP) to assist those countries. The intention of the program was to fill the gap created by the departure of expatriate officials in those countries that enjoyed a new independence. The total annual funding of UNDP was $34M. Twenty years later, the annual funding amounted to about $500M. Only 6% of that amount was invested in mineral projects. The World Bank was also eager to finance state programs. From the 1960s to the end of the 1980s, the United Nations Technical Dept. was in charge of the mining sector, through technical assistance programs conducted by expatriates attached to the disarrayed remnants of the national geological surveys. The Economic Commission for Africa, located in Addis Ababa, Ethiopia, is the local branch for the United Nations efforts. In the 1980s, UNDP funds dried u p and their efforts were in part replaced by the then EEC (European Economic Community).

The European Commission (EC) in Brussels decided to help the emerging countries, regrouped within the ACP (Africa-Caribbean-Pacific). The countries could apply to their mineral sector a portion of the annual amount given by the EC. The EC soon realized that the procedures were too slow to save many of the mining industries in difficulties because of international competition. They decided to initiate a special fund called Sysmin. The goal of this financial instrument was to help ailing mining industries increase their competitiveness and contribute more substantially to the GNP. In addition to these financial facilities, the European Bank for Investments provided loans to private entrepreneurs (for example, Sadiola) in the same way as the International Finance Corp.

The World Bank was there to provide financial support to governments for which the mining sector was an economic priority. For the private sector, the International Finance Corp., a World Bank branch, invests just like any other bank. In addition, the World Bank has subsidiaries in each continent; in Africa, it is the African Development Bank (ADB), operating from Abidjan (Cote d'Ivoire).

Table 4 presents a summary of the amounts spent by these multilateral agencies in the mining sector around the world up to 1991.

N.B. These amounts include costs of engineering, training, and purchase of equipment. The cost of exploration is estimated to amount to no more than 50% of the above total. In addition, IFC has invested $1.02B over 17 yr in mining ventures.

The financial contributions from individual countries as bilateral aid are more difficult to estimate; only accurate figures are presented in the text. In addition to the Western World, the communist bloc countries also contributed to the general efforts, but their aid was not a gift; it was added to the debt each of the African countries owed the bloc.

It appeared over time that there was a change in the priorities from geological mapping toward mineral exploration. In the early 1970s, for example, UNDP created the Revolving Funds for Natural Resources Exploration. This fund was dissimilar to the Sysmin in that it financed more advanced mineral projects (prefeasibility or even feasibility studies) with the hope that private mining companies would follow suit.

An average U.N. mineral exploration project has a total budget of $1.3M (60% contributed by UNDP and 40% by the recipient government). The principal U.N. projects in Africa until 1976 are summarized in Table 5.

Among the more significant discoveries and achievements resulting from the above investments up to 1976 are the following:

* Sudan: Hofrat en Nahas--copper (8.7M-mt resources grading 4.0% Cu)

* Guinea: Mt Nimba--iron (600M-mt resources grading 65% Fe)

* Upper Volta: Tambao--manganese (12M-mt resources grading 56% Mn)

* Burundi: Musongati--nickel-in-laterite (116M-mt resources grading 1.44% Ni)

It must also be pointed Out that the estimate does not take in account the nonmeasurable benefits, i.e. the training and practical experience acquired by the national staff working together with the international staff, and the buildup of a vast body of data and experience.

One of the fields where the U.N. projects were particularly successful was geochemical exploration. Although this applied science was developed in the former USSR prior to World War II, it was only in the 1950s that this exploration method became widely used in the Western World. The U.N. contracted as technical advisers such pioneers as Prof. Webb (Royal School of Mines) and Prof. Hawkes (University of California, Berkeley). The success of the geochemical exploration programs was also partly due to the development of Atomic Absorption Spectrometry (AAS). At first (mid-1960s), this allowed for rapid analysis of most base metals (analysis for gold was not yet possible at that stage) in U.N.-sponsored large-scale geochemical exploration programs worldwide. Many of them were very successful. In Africa, however, the lateritic cap and the poor development of permanent drainage in a large part of the continent did not favor stream sediment surveys. As a result, soil geochemical surveys were adopted.

For example, in Burkina Faso (ex-Upper Volta), large portions of the Birimian greenstone belts were covered by soil sampling. After almost 10 yr of continuous efforts and coverage, the U.N. projects succeeded in discovering the Perkoa Zn deposit.

More recently, U.N. projects explored parts of Chad and Togo. In Tanzania, they discovered and drilled the Kabanga nickel deposits, and in Burundi the Musongati nickel laterite deposits. After a recent E.U.-financed geochemical exploration program in Mauritania, La Source took an exploration permit covering an Archean greenstone belt. Today, Sysmin is financing mining projects in Namibia, Burkina Faso, and Gabon. The following further projects are in the pipeline: Gabon (new), Mali, Senegal, Zimbabwe, Niger, Namibia. Table 6 summarizes some of the exploration projects financed by the EU and its budget.

In the past, multilateral aid programs have been relatively successful in discovering new gold ore deposits in Africa, but have not done well in major new base metal development compared with other continents of equivalent size and prospectivity. For at least two decades, Africa has been underexplored for base metals.

Zambia and the Congo combined produce the largest net value of base metals (copper and cobalt), closely followed by South Africa (copper, lead, zinc, nickel). The total worth of African base metal production, however, represents only 5.9% of the global production value ($42.8B) of base metals, including cobalt and nickel.

1. Perkoa (Burkina Faso)

From 1969 to 1970, the U.N. mineral project in Upper Volta started large-scale soil and stream sediment geochemical exploration programs in different sectors of the country. An area of 2,000 [km.sup.2] was investigated with a coverage of four samples/[km.sup.2], taken either in stream sediments or in soils. The survey concluded that soil sampling was better than stream sediment sampling, mainly because wind-transported dust particles cover the poorly developed stream sediments during the dry season with a resulting bias of the sample analyses. On the other hand, due to the lateral mobilization of elements during lateritization, a sample of soil taken at the adequate depth represents the alteration product of a large area. From 1974 to 1982, a new U.N. mineral project covered an area of 38K [km.sup.2] with soil geochemistry on a sampling grid of 500 x 500 m. and at a depth of 30 cm. Each sample was analyzed by AAS for copper, nickel, cobalt, zinc, and lead. This regional survey was followed by detailed surveys over regional anomalies.

In the case of Perkoa, six grouped soil samples were anomalous in zinc and lead, covering an area of approximately 1.7 [km.sup.2]. The detailed surveys sampled on a 50 x 25-m grid. All samples were analyzed by AAS for copper, lead, zinc, and silver; some were also analyzed for manganese, gold, and nickel. The results showed an elongated lead anomaly surrounded by a weaker but larger zinc anomaly. A magnetic survey, which showed a strong magnetic anomaly superimposed on the geochemical ones, followed. Later, IP and EM surveys confirmed the existence of a conductive body at depth. It must be noted that the area of the anomalies is flat and contains only a small outcrop of manganiferous volcanic tuff, extremely rich in metals (up to 12,000 ppm Pb, 5,400 ppm Zn, and 112 ppm Ag). Prior to drilling, several trenches and pits were excavated across the trend of the anomalies. Analysis of samples taken there confirmed the surface sampling. The first drillhole was completed in January 1982, intersecting 7 m of massive sulphides (80% sulphides) rich in Zn (2.1%), Pb (0.6%), and Ag (100-g/mt), surrounded by a more disseminated mineralization. Six other drill holes followed, each one intersecting mineralization.

These holes were sufficient to conclude the existence of volcanogenic massive sulphides rich in zinc at a depth starting at -70 m. The mineralization is made up mainly of sphalerite with pyrite, and occurs in a volcanic sequence of the Birimian.

Following this discovery, the World Bank decided to finance a feasibility study. The contract was awarded to Penarroya (France). The latter company proved the existence of a deposit containing 6.1M-mt ore grading 18% Zn. The Perkoa deposit is a world-class orebody. Unfortunately, due to the lack of infrastructure and the distance to the closest harbor (Abidjan), exploitation has yet to commence. The same applies to the manganese deposit at Tambao (North Burkina Faso), discovered in the early 1950s.

The total cost of the U.N. project is estimated at around $3.5M and the Perkoa deposit contains a nominal mineral value of around $836M.

2. Syama (Mali)

In the 1980s, it became possible to routinely analyze gold with AAS. In addition, the price of this precious metal reached a peak of $800/oz in 1981. Gold was therefore added to base metals as a target of geochemical surveys.

Mali has been known for its small-scale gold mining for centuries. The 2-yr U.N. mineral project "Or Bagoe" started in early 1984 and had to cover an area of 25K [km.sup.2] by geochemical soil sampling. After an orientation project, a regional survey was carried out on a sampling grid of 1000 x 200 m. A detailed survey sampled 100 x 20 m grids.

During the regional survey, covering only 8,700 [km.sup.2], a series of gold anomalies were detected associated with Birimian volcanic rocks. A detailed survey was carried out, and at Syama, a gold anomaly covering an area of 1.2 [km.sup.2] was defined. The detailed survey consisted of collecting 1,064 soil samples and analyzing them for gold, copper, zinc, lead, nickel, and chromium.

Gold background was estimated at 126 ppb with a threshold of 1,000 ppb. At 1 ppm, the anomaly measured 1-km long by 250- to 400-m wide. Gold content peaked at 10 ppm within the anomaly. Old workings were discovered during the survey.

In 1986, BHP-Utah started negotiations with the government to obtain a mining title. Syama mine started gold production in 1990, and until October 1998, produced 29-mt Au. Since 1996, the mine has been operated by Randgold, which acquired all BHP's properties in Mali. The present resource is estimated at 56.2M-mt grading 3.85-g/mt (174-mt Au).

The cost of the U.N. project was $2.5M (other anomalies similar to Syama are still to be investigated by private companies), and the nominal value still to be extracted is equivalent to $2B.

3. Morila (Mali)

Between 1986 and 1987, the Belgian government financed a geological mapping and mineral exploration program in Mali to cover the Massigui square degree map sheet. Bugeco was in charge of the project.

A regional soil geochemical survey with a sample density of 0.5/[km.sup.2] detected several gold anomalies . The surface covered was 12.1K [km.sup.2]. Samples were analyzed for 15 elements. The threshold for gold in soil was estimated at 200 ppb. Morila was detected during this survey by three samples with values above the threshold, the highest value being 450 ppb, and seven samples above 20 ppb. Morila was selected for a more detailed survey.

There is no outcrop within the anomalous area, but several laterite scarps stand up to 10 in above the surrounding area. In a first stage, samples on a 1000 x 200-m grid were analyzed. This intermediate survey produced five more samples above 50 ppb. A detailed survey followed on a sample grid of 400 x 200 m, with subsequent infill at 200 x 100 m covering a surface of 16 [km.sup.2]. A total of 4,371 samples were analyzed.

The gold anomaly defined by the 200-ppb contour contained several samples with gold values [greater than]2 ppm. These samples were all located at the feet of the ferruginous scarps. A strong similarity between Syama and Morila exists in terms of landscape and gold content. No old workings were found at Morila, a quite unusual feature for a gold occurrence in Mali.

Ten pits were excavated and the panning of the material showed visible gold in two of these.

In 1989, BHP-Utah obtained the permit, but the geologist in charge did not believe in the gold potential of Morila. Only when Randgold acquired BHP's properties did Morila receive the attention it deserved.

Reserves at Morila are presently estimated at 42.7M-mt grading 3.8-glint Au and resources at 41.7M-mt grading 3.1-g/mt.

The cost of the Massigui project was of the order of $1.5M, and the nominal mineral value of Morila amounts to around $2.7B.

4. Samira (Niger)

The European Union, through Sysmin, financed a regional survey in the Liptako area. The Liptako region straddles the borders of Niger, Burkina Faso, and Mali. In Niger, the Liptako occupies the region west of the Niger River. The area is a gently rolling peneplain above 200-m altitude with a few residual hills up to 350 m. Vegetation is of savannah-type with sparse trees.

Systematic regional coverage started in 1989, and the project was terminated in 1994. Because of large eolian deposits and a palaeolaterite cover, it was decided that the soil sample density should be 500 x 200 m for the regional survey and 200 x 40 m for the detailed survey.

During the regional survey, several gold anomalies were pinpointed with soil samples grading more than 100 ppb. Samira is one of them, outlined by three samples above 100 ppb. It is located in the Sirba region.

The prospective geochemical anomaly is adjacent to a major north-south trending magnetic and electromagnetic contrast outlined by airborne surveys. A detailed geochemical survey over the strategic anomaly on a grid of 40 x 40 in (2,177 samples) outlined a strong anomaly at the 100-ppb level, measuring 5 x 2.5 km. The Samira anomaly was subsequently surveyed by resistivity and IP techniques, which defined narrow north-north-west/south-southeast shear zones together with high metal factor responses. The anomaly was drilled by RC and DDH.

The EU-financed project ended with a rough resource estimate of a few million mt ore at 2-glint Au.

The Etruscan Co. took over the project, expanding drill hole coverage. Present resource estimates at Samira stand at 5.5M mt grading 2.57 glint Au. Mine production at Samira will start at the end of 2000.

The total cost of the project is estimated at $5M and the nominal mineral value at $114M.

5. Sadiola and Yatela (Mali)

The Sadiola gold deposit, located 77 km south of Kayes, in Mali, occurs completely in altered Birimian rocks.

In the mid-1980s, an exploration survey financed by the EEC and executed by the DNGM, assisted by Klockner Industrie-Anlagen (Germany), showed a large and strong gold-in-soil anomaly centered on Sadiola Hill. A few pits confirmed the presence of coarse gold in the laterite.

In January 1990, the Ministry of Mines of Mali issued a 3-yr renewable exploration license to African Gold Exploration and Mining (AGEM), a wholly owned subsidiary of IAMGOLD (International Mining Gold Corp.) of Markham, Ontario, Canada. The license covered 1,080 [km.sup.2].

In April 1990, the government of Mali and AGEM signed a Convention d'Etablissement (agreement) defining the general, technical, legal, administrative, financial, fiscal, and social conditions for the exploration and exploitation of deposits in the area covered by the exploration license.

Further exploration work carried Out in 1990 and 1991 by Kloackner on behalf of AGEM outlined an oxide gold deposit, the resource of which was estimated at 6.7M-mt at an average grade of 4.4-g/mt (29.5-mt Au).

In the spring of 1991, IAMGOLD/AGEM requested Watts, Griffis and McOuat Ltd. (WGM) to review previous exploration work performed at Sadiola, prepare a preliminary feasibility study, and make recommendations for further work. The study was positive, and WGM strongly recommended a large multimillion dollar mineral exploration program. In 1992, WGM completed 37 inclined diamond drill holes. The total resource rose to 23.5M-mt grading 2.5-glint Au (59-mt Au).

At this time, IAMGOLD was looking for financial and technica partners to continue the development of Sadiola Hill. BHP was already in Mali but turned down a partnership agreement. Anglo-American then started negotiations, and in late 1992, an agreement was signed with IAMGOLD in which AAC acquired an option for a 50% stake in the Sadiola concession in the event that the planned feasibility study, financially supported by AAC, turned out positive. AAC was committed to drill an additional 325 holes, representing 32.4 km. At the conclusion of this drilling program, the mineable reserves were calculated at 52.2M-mt grading 2.23-glint (116-mt Au) and the resource at 98M-mt grading 1.6-g/mt (157-mt Au).

It is evident that the Sadiola gold deposit is one of the major discoveries of this decade in the world and the best new discovery in Africa. Production started in 1997, and by the end of 1999, the mine had already produced nearly 52-mt Au, export value equivalent to $485M.

Today, the reserves are estimated at 391.M-mt ore grading 2.23-g/mt and the resource at 98M-mt grading 1.6-g/mt. The nominal mineral value still contained in the deposit is estimated at around $2B.

In 1999, AngloGold and IAMGOLD announced the development of a new orebody, 25 km north of Sadiola, the Yatela gold deposit, calculated so far at 20.5M-mt grading 2.9-g/mt Au (59-mt Au). In between the two lies another gold mineralization, the Alamoutala orebody, estimated to contain 2M-mt grading 2.5-g/mt (5-mt Au).

In terms of return on investment, it is interesting to compare the cost of grassroots exploration to the nominal value discovered. Table 8 summarizes the cost of exploration.

When it is compared with the figures of Table 7, the ratio is 1:360, i.e. for each dollar invested $360 have been discovered, and some of these dollars invested are already producing more than $800.

Social Impact

For the governments, the new gold production is a real financial asset. A study Bugeco conducted for the government of Mali ("Economic impact of the mining sector on the national economy", 1999, unpublished), revealed that the gold production of the two mines (Syama and Sadiola) has provided the state with more than $100M from 1990 to the end of 1999 (Table 9), and that the mining sector created 3,600 new jobs. These new jobs are also responsible for the establishment of new secondary enterprises such as bakeries, butcheries, woodworking businesses, etc.

In 1997 alone, the mining companies operating in Mali spent $44M purchasing equipment and supplies from local providers, contributing to the creation of other new jobs and new enterprises.

In 1997, the mining companies disbursed $12.2M in wages. The average yearly salary of these new jobs is estimated at 2,101,560 F.CFA. It has been estimated that half of this revenue is spent on average living costs. The balance, around 1M F.CFA, is benefit to be used for extras. The money available for extras has and will create new jobs in the commercial sector.

Conclusions: What Has Been Done and What Can Be Done ?

1. Financial Aspects

In 10 yr of grassroots field exploration financed by multilateral and bilateral aid programs, two gold deposits were successfully put into production, and an additional resource of 433-mt Au was defined. The value of the production (up to end-October 1998) reached a total of $437M. The estimated value of the resource defined, zinc included, amounts to $4,330M. In addition, the exploration programs have also been responsible for a tremendous increase in applications for exploration permits in every country of the subregion, including Cote d'Ivoire, Guinea, Senegal, and Mauritania. Several gold deposits were put into production (Afema and Ity in Cote d'Ivoire, Siguiri in Guinea). Following the efforts of these junior and major companies, it is evident that new deposits will be discovered and put into production soon. Because of the gold boom--largely due to its high value and the heap-leachable nature of lateritic and saprolitic materials--base metals have been somewhat neglected.

A better review of all the copper, lead, zinc, and nickel geochemical anomalies already detected should result in the discovery of other Perkoa-type deposits.

The private companies should organize their exploration toward a more grassroots style and invest more efforts in understanding the real potential of the Birimian rocks.

2. Managerial Aspects

On several occasions, the importance of the geologist in deciding which mineral targets should be developed and which ones should be disregarded has been pointed out. The examples of Morila and Sadiola clearly illustrate that the managers were responsible for the wrong decision to close their investments in Africa.

3. Importance of Grassroots Exploration

It has been shown that all the new discoveries and mines are due to grassroots exploration programs at a time when West Africa was not attractive to private investments. Today, there are enough incentives for large investments in those countries, but the promising mineral targets become more rare. It is therefore time for the mining companies to address the problem of finding new targets. It appears that grassroots exploration, combined with a good understanding of the geology, is required for finding new deposits, not only for gold but more importantly for base metals as well. The lack of geological outcrops must be balanced by the use of geophysics (classical airborne, complemented by gravimetry). The dolomitic limestones, hosting the gold orebodies at Sadiola and Yatela, were not suspected to have any potential during the surface geological mapping program. In other parts of West Africa, for example in the Adrar des Iforas (Mali), scientific research by European universities has shown that the Panafrican o rogeny has developed ophiolitic sequences, with potential for nickel and associated metals. Thus, many other regions remain unexplored geologically and structurally.

What has been unveiled in West Africa so far is extremely attractive to anyone seeking new and exciting geological and mining ventures and challenges.

(*.)The author's e-mail address is:


* Large mineral potential.

* Geology similar to Australia, Canada, India, and so on.

* Obsolete orebody models. Modern interpretations reveal potential for new discoveries.

* Several large and promising geological contexts yet to be explored: rifts, sedimentary basins, Panafrican orogens.

* Large potential for mining medium-size gold and base metals deposits.

* New more transparent mining codes and more competitive fiscal regimes.

* Best local engineers now employed by foreign mining companies.

* Local labor eager to be trained in new technical skills.

* Open to private investments.

* Best regions where the rule of law prevails: Southern Africa, Morocco, Ghana, Tanzania, and Burkina Faso.


* Poor infrastructure.

* Poor geological mapping and records, Geological surveys almost nonexistent.

* Almost no grassroots exploration to discover new targets.

* New gold mines only in deeply weathered terrains where large tonnages of oxidized ores allow low cash costs.

* No incentive. Civil wars. Political instability. Lower life expectancy.

* New rules and regulations yet to be correctly applied.

* Clashes between mines and finance ministries.

* Poorly staffed mining administration. Lack of competence. Low salaries. Lack of training. Corruption.

* No mining tradition. Aggressive labor unions. High labor cost.

* Hesitancy to get rid of state mining enterprises and suspicion of foreign mining companies' motives.
COPYRIGHT 2000 PRIMEDIA Business Magazines & Media Inc. All rights reserved.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Goossens, Pierre J.
Publication:E&MJ - Engineering & Mining Journal
Date:Sep 1, 2000
Previous Article:LETTERS.
Next Article:Contemplating CLOSURE.

Terms of use | Privacy policy | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters