South Africans spearheading new Guinea bauxite thrust

20-Apr-2012 Intellasia | Creamer Media's Mining Weekly | 7:05 AM Print This Post

South Africans are spearheading a new bauxite thrust in Guinea, which hosts a quarter of the world’s bauxite reserves.

Adonis Pouroulis, better known as the initiator of Petra Diamonds – now listed on the main board of the London Stock Exchange – is leading Alufer Mining Limited’s thrust from London, where the company is set to raise up to $40 million and seek admission to London’s Alternative Investment Market (Aim).

Both chairperson Pouroulis and Alufer CE Danny Keating were formerly South Africa based.

The Pouroulis-founded Pella Resources, Alufer’s major shareholder, is an African mining house with more than 20 years exploration and mine development experience on the continent.

Alufer reports that new sources of bauxite are required as the industry faces potential supply constraints including declining quality from traditional suppliers, restrictions on exports of unbeneficiated ore from Indonesia and the lack of investment in new mines globally.

The RBC Capital Markets-advised Alufer intends becoming a bauxite producer by exploiting three billion tonnes of compliant bauxite resources in Guinea, where Pouroulis notes investment in new mines does not match the country’s high bauxite endowment.

A prefeasibility study has advanced its Bel Air project, located 15 km from the Guinean coast in West Africa and its Labe project, in the northwest of the country, is also earmarked for development.

First Bel Air production is expected in late 2013, or early 2014 and the company aims to ramp up annual Guinean production to 10 million-tonnes during 2015.

Capital raised will fund the completion of a bankable feasibility study for Bel Air, a prefeasibility study for Labe and asset acquisition and development.

Bauxite, the primary raw material used in aluminium production, is refined into alumina before being smelted into aluminium.

Alufer reports that China’s alumina capacity increased to 37 percent of global capacity in the first quarter of 2012 from 11 percent in 2004, to meet demand from the aluminium smelting industry. China’s bauxite imports have consequently increased from about three million tonnes in 2005 to 45 million tonnes in 2011.

The company expects global bauxite demand to grow 6.9 percent a year, from 220 million tonnes in 2011 to 750 million tonnes in 2030.

Pouroulis makes the point that the closeness of Bel Air to the coast results in reduced infrastructure requirements and Keating describes bauxite’s supply-and-demand fundamentals as particularly attractive against the background of continued high demand from developing economies.

Alufer, incorporated in Guernsey in 2010, is set to be the first Aim-quoted bauxite company, with four bauxite exploration licences covering 2 977 km2, in the Boffa region, which hosts Bel Air, in the Labe region, which hosts the Labe project, and in the Kindia region.

Besides Petra, which has seven producing diamond mines in South Africa – Cullinan, Finsch, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star – and one in Tanzania – the Williamson mine, Pella Resources is also associated with the Aim-quoted Chariot Oil & Gas.

Petra, which produced more than 1.1 million carats in 2011, is targeting production of more than five million carats by 2019.

Floating production facility for Cepu ready for construction

20/Apr/2012 Intellasia | Jakarta Post

A vessel that will be converted into a floating storage and off loading (FSO) unit for the Cepu oil and gas block in East Java has arrived in Singapore’s Sembawang shipyard, paving the way to begin commercial operations in May 2014.

The conversion process for the vessel, named MT Chios, will commence after its official inauguration on April 14 following its arrival in Singapore on March 22, said Rudi Rubiandini, the operational deputy of upstream oil and gas regulator BPMigas.

The conversion process will include cleaning up the cargo, ballast and slop tanks. Installation of platforms in the cargo tanks will follow, and, afterward, a detailed survey will be done. As a last step, all unused machines and pipes will be taken off.

The MT Chios vessel is a very-large crude carrier (VLCC) with a total capacity of 320,000 deadweight tonnage (dwt), able to store up to 1.7 million barrels. It was made in 1993 by Hyundai Heavy Industries with a length almost twice that of a football field at 327 meters.

“After being converted, the vessel’s name will be changed to Gagak Rimang,” Rudi told reporters on Tuesday.

“We hope the renovation of the vessel can be completed in January 2014 and therefore can be commercially operated by May that year,” he added.

Indonesia’s dwindling oil output has posed challenges to increasing the production capacity of its blocks, with Cepu being the potential top-contributing block for the government’s ambition to reach a million barrels of oil production per day (bpd) versus 930,000 bpd at present.

The Cepu block, which is operated by US-based ExxonMobil’s subsidiary Mobil Cepu Limited, is expected to begin producing 165,000 bpd starting July 2014, compared with the current 20,000 and 22,000 bpd using early production facilities.

Mobil Cepu and PT Pertamina EP hold a respective 45 percent stake in the Cepu block, while the remaining 10 percent is owned by regional administration-owned enterprises of Central Java; Bojonegoro, East Java; Blora, Central Java; and East Java.

Development of the block is divided into five engineering, procurement and construction (EPC) projects, of which four are included in the FSO. The FSO project has been awarded to PT Scorpa Pranedya and Sembawang Shipyard with a total value of $298.7 million.

The five EPC projects, which have contracts valued at more than a billion US dollars, are estimated to be completed in 36 months, with the ground-breaking for the first project having been conducted in December last year.


Category: ResourceAsia

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