JOURNALLondon,April 14, 2000Volume 334No. 8578

Established 1835ISSN 0026-5225

Minahasareprieve

http://www.mining-journal.com

Inside• Russian aluminium jigsaw

(p.283)• Renewed impetus for

PGM search (p.285)• Marikana feasibility result

(p.287)• One-stop web shop for

gold (p.292)• Australian exploration

exodus (p.294)

The mill and roaster at Minahasa.(Photograph courtesy of Newmont.)

Indonesia’s Supreme Court has sus-pended a controversial district courtruling ordering the closure of theMinahasa gold mine in Ratatok, NorthSulawesi. The mine, 80%-owned by PTNewmont Minahasa Raya (a sub-sidiary of US gold miner NewmontMining Corp.), had been issued with anorder from the Tondano District Courton April 8 to shut down the mine byApril 16. The closure order relates to aclaim by the regional government, theMinahasa Regency, that taxes are owedon overburden removed during themining operation (which it regards asquarrying). Newmont has disputedthis, pointing out that its Contract ofWork with the Government ofIndonesia excludes taxes on overbur-den and that this position is supportedby Indonesia’s Department of Minesand Energy.

The regency filed a suit last year inthe district court demanding a total ofRp61.5 billion (US$8.1 million) inoverdue taxes and compensation. Thecourt ordered the mine to shut downearly this year (MJ, January 28, p.62),Newmont appealed against the rulingbut the provincial high court inManado, the capital of North Sulawesi,upheld the decision early last month.This Wednesday’s suspension of theruling by the Supreme Court followed arequest by Newmont to review thejudgement, and came just one daybefore the company was scheduled topresent a detailed closure plan to thegovernment.

The president of PT NewmontMinahasa Raya, Richard Ness, hadsaid that the company was “quitefrankly outraged at the blatant disre-gard for the due process of law that the

(district) court displayed”. Mr Nesswas referring to a series of “highlyirregular decisions” by Judge Susmonoat the court hearing, and his refusal,after allowing the witness for the plain-tiff to testify, to allow Newmont’s wit-nesses to testify, citing the late start tothe proceedings and the fact that they(the Newmont witnesses) were ‘techni-cal experts’. Mr Ness was careful topoint out, however, that the companyrecognised that the closure order wasan isolated issue “relating to the emo-tionally-charged politics of regionalgovernment”, and “does not reflect theinvestment policies of the Governmentof Indonesia”.

The Department of Mines andEnergy, under special ministerialdecree, had established a joint studyteam in an attempt to resolve theregional dispute, and at one stage theregional government and Newmonthad been close to an out-of-court settle-ment in which Newmont agreed to con-tribute US$1.5 million to communitydevelopment in the regency.Negotiations foundered, however,because of disagreement about whowould manage the fund.

Continued on p.283

Pechineywithdraws

Pechiney, the French aluminium group,has withdrawn from the planned three-way merger with Alcan of Canada andSwitzerland’s algroup. Announcing itsdecision this Thursday, the companysaid that it had failed to reach an agree-ment that would satisfy the other twoparties and the European Unionauthorities. The three-way mergerwould have created a company withannual revenues of around US$17 bil-

lion, rivalling the industry leader,Alcoa of the US.

Last month, Pechiney withdrew anapplication to the EuropeanCommission for its merger with Alcanafter failing to resolve competitionconcerns (MJ, March 17, p.205) butsince then neither it nor its prospectivepartners have been able to come upwith a workable solution.

The companies have concluded that“the divestments which would ulti-mately be required to meet the objec-tions of the European Commissionwould seriously undermine the strate-gic viability of the combined compa-ny’s rolled-products business in Europe

and its ability to serve customers inthat region”.

The two-way merger agreementbetween Alcan and algroup remains ineffect and would be completed throughan exchange offer to algroup sharehold-ers. Analysts consider that a three-waymerger would have been the best optionfor all parties but Pechiney’s withdraw-al is seen as an especially serious blowfor the French company. It would havebenefited from significant synergiesand is now isolated in a sector which isconsolidating rapidly and where merg-er options are becoming much morelimited. Pechiney’s share price has fall-en sharply. ■■

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MJ

As if the Bre-X revelations in 1996-97were not enough, foreign investorconfidence in Indonesia’s mining sec-

tor has been further undermined since thenas a result of a number of developments. Forone, the country’s Contract of Work system,once hailed as a success story for otherdeveloping nations to emulate, is now look-ing a lot less attractive. The pre-draft 8thgeneration of CoWs has been described bymining investors as unworkable (MJ,October 22, 1999, p.322) and it is nowbeing redrafted with consequent delays toprospective projects. Also, the validity ofexisting CoWs is being questioned followingthe introduction of new laws giving greaterregional autonomy (this issue, p.281).

Looming on the horizon, however, isanother law which, if implemented, coulddeal a further blow to the Indonesian miningsector as it would prohibit mining in much ofIndonesia’s forested regions. Mining compa-nies’ activities in the world’s forested areashave been heavily criticised by some organi-sations (MJ, March 10, p.194), and rightlyso in some instances, but the scale of suchactivity should be put in perspective andweighed alongside the economic benefits.

In Indonesia’s case, some useful factsand figures are provided by Clive Aspinall inhis latest report on Indonesian Mining RiskAnalysis*. The public’s perception that com-mercial mining causes widespread environ-mental destruction, he says, is at odds withreality. The total land disturbed by the 38current mines in Indonesia amounts to lessthan 1,350 km2, or less than 0.1% of theIndonesian land mass (1.9 million km2), andrepresents a smaller area than that coveredby Jakarta and its surrounding suburbs.

Since 1967, however, timber companieshave deforested some 540,000 km2 or 28%of Indonesia’s landmass. The remaining pro-duction forests amount to 200,000 km2, andat current rates of deforestation it is esti-mated that the whole of the country’s pro-duction forests will have been depleted by2015. The past 30 years or so has seensome reforestation but this has not beenenforced. Moreover, in some national parks,illegal deforestation is going on at many

locations, threatening rare primates such asthe orang utan and rare tree species. Thevarious national parks cover a total of213,000 km2. ‘Protected forests’ coveralmost 350,000 km2.

Forestry Affairs Law 41/1999 (specifical-ly Article 38, sub-article 4) will prohibitopen-pit mining in protected forest areas. Ifthe law is implemented without revision, MrAspinall estimates that some 41% of exist-ing CoWs will be affected. He notes that mil-lions of exploration dollars have alreadybeen spent in protected forest areas.Combining the area covered by Indonesia’snational parks where mining is forbidden(11.2% of the landmass) with the protectedforest area (18.2%) would mean that almost30% of Indonesia would be closed to mining.Even though underground mining would beallowed in protected forest areas, MrAspinall doubts that exploration companieswould take the risk. Furthermore, he arguesthat the protected forest land is amongstthe most prospective for exploration.

Mr Aspinall suggests that one likely reasonfor the new law is the pressure from interna-tional donors for Indonesia to improve its for-est management. The concern is fully justi-fied but the timber industry, farming, planta-tions and urban growth have caused far moredeforestation than mining, and he questionswhy advice has not been sought on theimpact the law will have on mineral resourcedevelopment. Mining provides direct employ-ment for 30,000 people and annual exportrevenues in excess of US$3.0 billion. Basedon 1998 figures, the government receives inexcess of US$500 million/y from mining, andif these tax/royalty revenues are maintained,Mr Aspinall believes they could finance thereforestation of 700,000 km2 of land over thenext 35 years, with sufficient left over to payfor the complete rehabilitation of allIndonesia’s endangered species.

However, if Article 38 goes throughunchanged, he warns, many joint ventureswill be put on hold and mineral explorationcould stagnate – until legislators see thelight and revise it.

*gsm@jakarta3.wasantara.net.id

Change High- Year’son week Low Max/Min

Share Indices Apr 14 (%) (%)FT 30 3,664 0.1 23 4,148-3,521US Dow Jones 11,125 0.8 77 11,551-9,667FTSE Gold Mines 769 –5.3 13 1,232-702Australian All Mining 609 –2.0 24 771-558South African Gold 1,010 –6.9 37 1,358-807Toronto Met/Min 3,545 0.7 31 4,749-3,009Nikkei Dow 20,833 1.8 100 20,833-15,480Hang Seng 16,577 1.6 79 18,096-10,711

Commodity Prices Apr 14Gold (London) $282.60 0.3 41 $324-254Copper (LME) $1,679.50 –2.0 62 $1,877.50-1,361Aluminium (U.S. prod.) 64.50c 0.0 44 69-61Brent Blend (dated) $21.48 –6.0 51 $31.16-11.44

LEADING INDICATORSChange High- Year’son week Low Max/Min

HSBC Indices Apr 14 (%) (%)(100 on 31/12/88 except*†)

Global Mining 117 –1.9 45 146-94Global Diversified Mining 150 –3.4 44 198-114Smaller Mining Companies 46 –2.5 23 59-42Global Base Metal 163 0.7 58 204-106North American Base Metal 380 1.5 54 489-251Global Gold 52 –4.6 0 78-52Global Gold Ex S Africa 56 –3.9 2 85-56North American Gold 65 –3.9 4 97-63Global Coal Mining† 128 0.8 2 195-126Other Metals/Minerals† 246 0.1 63 271-203Latin American Mining* 249 –1.0 75 286-137Latin American (Ex CVRD)* 158 –1.1 66 184-109*100 on 31.12.89 †100 on 31/12/85

282 Mining Journal, London, April 14, 2000

Minahasa reprieve

The Minahasa mine produced 344,000 ozof gold in 1999, up from 261,000 oz in 1998,and at a cash operating cost of US$103/oz.Production began in 1996 and last year themine began operating Indonesia’s firstheap-leach pad. Output is expected to peakthis year at 350,000 oz. At the end of 1999,reserves amounted to 1.1 Moz of containedgold and although mining is scheduled forcompletion at the end of 2001, ore process-ing should continue for several years more.

The mine appears to have been reprievedbut the affair highlights the problems thatcould arise from new laws in Indonesia giv-ing greater autonomy to the regions. Theselaws were passed by the administration ofthe country’s former President Habibie,who took over the reins after the demise ofthe Suharto regime, at a time when a num-ber of Indonesia’s provinces were agitatingfor self government and greater control overtheir resources.

Paul Louis Courtier, executive director ofthe Indonesian Mining Association, warnsthat as part of their ‘autonomy euphoria’many regions could start asking companiesto pay taxes, fees and other charges undertheir own, local regulations. According toone mining analyst in Jakarta, there arealready signs of local governments prepar-ing by-laws to gain additional revenue frommining companies.

If the much-needed foreign investment inmining is to be forthcoming, there is clearlya need to ensure that existing contractswith mining companies are protected. Thegovernment is well aware of this and theInvestment Minister, Laksamana Sukardi,says he intends to set up a team to look atall cases of investment. “There must be alegal certainty. If not, it is going to be verydifficult for us”, he says. ��

Russia’s aluminiumjigsaw . . .

A group of Russian smelters accounting forthe lion’s share of the country’s primary alu-minium output are reported to be joiningforces to present a unified pricing and pro-duction policy. A degree of management co-operation is also being considered. Thesmelters involved include the two giantSiberian plants, Bratsk (which produced870,700 t of aluminium in 1999) andKrasnoyarsk (836,500 t), plus Sayansk(386,400 t) and Novokuznetsk (273,500 t).Russia’s total aluminium output last yearwas 3.15 Mt.

According to Interfax, the unified salessystem was discussed at length at the begin-ning of April in talks between Sibneft (theRussian oil company whose shareholders

acquired controlling stakes in Bratsk andKrasnoyarsk early this year) and manage-ment from Siberian Aluminium (Sibirsky)which owns Sayansk. Sibneft had beenproposing the formation of a single alumini-um holding company, to be known asRussky Alyuminy (Russian Aluminium),but has since said that producers haveagreed to broad co-operation without goingas far as uniting into a single giant compa-ny.

Novokuznetsk, Russia’s fifth largest alu-minium smelter, is understood to be includ-ed in Sibneft’s plans although a spokesmanfor Novokuznetsk has said that a control-ling interest in the smelter has now beensold to LogoVaz, a car dealership owned bythe prominent businessman turned politi-cian, Boris Berezovsky. Novokuznetsk hadbeen declared bankrupt last month (MJ,March 24, p.231).

In addition to bringing the majorsmelters under one umbrella, Sibneft’s pro-posal includes two alumina refineries,Achinsk in Russia and Mykolayivsky(Nikolaev) in the Ukraine, plus theKrasnoyarsk metallurgical plant and theKrasnoyarsk hydropower station. Sibneftshareholders have a minority interest in thepower station and almost 50% of theAchinsk refinery. Sibirsky, for its part, islinked to Ukrayinsky Aluminium, a compa-ny that last month secured a 30% stake inthe Nikolaev alumina refinery (MJ, March31, p.249). Nikolaev has the capacity toproduce 1.2 Mt/y of alumina and 94% of itsoutput is exported, mainly to Russia (60%)and Tajikistan (30%).

Interfax quotes a spokesman for Sibneftas saying that its plans for restructuring theRussian aluminium sector were promptedby changes in the industry afterKrasnoyarsk Aluminium failed to reachagreement with the regional energy com-mission (which has since decided to raiseelectricity charges for the smelter). Sibneftapproached Sibirsky because it has no expe-rience of producing and selling aluminium,and needs the management expertise thatSibirsky can offer. Apparently, talks arecontinuing about the extent of Sibirsky’sparticipation although there have beenreports that, at the initiative of Sibneft,managers from Sibirsky are already in placeat some of the operations.

Another factor apparently influencingSibneft’s plans for restructuring was arecent court decision to nominate a newexternal manager for the bankrupt Achinskalumina refinery. The administration in theKrasnoyarsk region (in which Achinsk islocated) has since agreed with the refineryowners to end bankruptcy proceedings andto lift the requirement for external manage-ment of the plant. The regional administra-tion has also said that it intends to imple-ment, shortly, a series of measures to createa joint-stock company and that it will nom-inate a new chief executive for Achinsk.

(Since the plant was declared bankrupt inDecember 1996, various rival creditorgroups have attempted to challenge the rul-ing and install their own management, anduntil a fortnight ago, Achinsk was managedby Georgy Lokk, supported by creditorsbacked by the Alfa banking group. Themanagement issue remains unclear, as anadviser to Mr Lokk has insisted that thelocal court has ruled to extend externalmanagement for a further two years.)

Sibneft has intimated that consulta-tions about a strategic partnership havealso been made with the Alfa bankinggroup, although a spokesman for Alfa hasdenied this. The banking group controlsSiberian-Urals Aluminium Co. (SUAL)which operates the Irkutsk and Uralsksmelters, and is Russia’s fourth biggest alu-minium producer, with a 1999 output of340,600 t.

This Monday, SUAL announced that itplans to team up with Trastkonsult whichcontrols Russia’s sixth largest smelter,Bogoslovsky in the Urals. Last yearBogoslovsky produced 158,800 t of alumini-um. SUAL’s president, Viktor Vekselberg,told Reuters that the combined group isaiming to produce up to 600,000 t/y of alu-minium and 1.6 Mt/y of alumina, and hasno immediate plans to talk with Russia’sother major aluminium players.

MINING WEEK

Mining Journal, London, April 14, 2000 283

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Speaking in London recently, SUAL’scommercial director, Vladimir Kremer, esti-mated that Russia’s aluminium outputcould reach 3.4 Mt by 2005 and 3.8-4.3 Mtby 2010. Mr Kremer said that his company,like most other Russian producers, was keento have its own sources of raw materials. Tothis end, it has acquired a controlling inter-est in Bauxite Timan mining companywhich operates Russia’s largest bauxitemine at Sredny Timan in the northwest ofthe Russian republic of Komi. Bauxitereserves at Sredny Timan are estimated at250 Mt.

The company is currently operating onan ‘interim’ basis, and the bauxite produc-tion target this year is 500,000 t, up from267,500 t in 1999. Mr Kremer says that amajor production facility is now under con-struction with a capacity of 2.5 Mt/y andthat by 2010, annual bauxite production isexpected to reach 6.5 Mt/y, sufficient toproduce 2.2 Mt/y of alumina. SUAL isinvesting US$100 million in a 160 km rail-way which, within 30 months, should linkthe mine to an existing rail line and facili-tate movement of bauxite to the Urals.

Further ahead, an effective step wouldalso be to build a 1.5 Mt/y capacity aluminarefinery in the Komi Republic. No timinghas been announced by SUAL for thisproject but it would enable any surplusproduct to be offered to Russian consumersat competitive prices. Trastkonsult, inaddition to Bogoslovsky, also controls theNorth Urals bauxite mine in theYekaterinburg region.

. . . Ukraine reactionCommenting on the possibility of a unifiedRussian aluminium industry during an alu-minium conference in London last week,Sergei Grishchenko, Ukraine’s first deputyminister at the Ministry of IndustrialPolicy, said that it was a worry but notedthat the structure was only beginning totake shape. Asked about its impact on theUkraine, he stressed that in the past the alu-minium industries of the two countries hadbeen developed as a whole, and he describedthe Russian participation in the privatisa-tion of the Nikolaev refinery as positive as itsafeguards a guaranteed market forUkraine’s alumina.

The local firm Ukrayinsky Aluminiumwon a tender last month for a 30% stake inthe refinery, pledging to pay US$101 millionand to build a new 100,000-130,000 t/ycapacity smelter at an estimated cost ofaround US$200 million. The Government ofthe Ukraine will retain a 25% stake in therefinery and the Russian aluminium pro-ducer, Sibirsky, owns a further 38%. At pre-sent, Zaporizhsky Alumiyevy Kombinate isthe country’s sole aluminium producer, withan output last year of 112,400 t. Up to 68%of the shares in Zaporizhsky are to be sold

this year but it has yet to be decidedwhether or not this will be in a single parcel.

At the 1.2 Mt/y Nikolaev alumina refin-ery, there are plans to modernise the plantand to boost capacity to 1.3 Mt/y. Outputhas been declining, with production lastyear down to 992,000 t from 1.06 Mt in1998. The increased output, coupled withthe needs of the new smelter, estimated atabout 250,000 t/y, will require additionalbauxite supplies and UkrayinskyAluminium has said that in co-operationwith Sibirsky it is planning to purchasebauxite mines in Guinea. ��

Leviev to buy intoCamafuca . . .

Leviev Group, an Israeli diamond cutterand trader, has increased its already signifi-cant presence in the Angolan diamondindustry. This week, an agreement wasannounced under which Hong Kong-basedWelox Ltd, a member of the Leviev Group,may acquire an interest of up to 32% in theCamafuca kimberlite pipe in the Calondaarea of Lunda Norte Province. Camafuca,one of the largest known undeveloped kim-berlites in terms of surface area, is subjectto a joint venture held 65% by Toronto-based SouthernEra Resources Ltd; 20% byEmpresa Nacional de Diamantes de Angola(Endiama), the state-owned diamond pro-ducer; and 15% by Sociedade Mineira doLucapa Limitada (SML), a companyowned by Endiama and other local interests(MJ, February 13, 1998, p.121). Levievwould earn its 32% from SouthernEra’sshare, which is already subject to a 14% netprofits interest in favour of the other twopartners, through a company SouthernEraAngola Lda to be owned proportionately bySouthernEra and Leviev.

SouthernEra indicated last year that itwas seeking to reduce its involvement inCamafuca, particularly in terms of thefunding commitment required to maintainits interest (MJ, December 10, 1999,p.460), in order to concentrate on its otherdiamond interests in southern Africa andelsewhere, and on its newly acquiredMessina platinum project. SouthernEra hascompleted a positive feasibility study ofCamafuca, based on a staged developmentapproach, with an initial capital require-ment of US$10-15 million.

Under the terms of the deal, Welox willadvance an initial loan to SouthernEraAngola Lda of US$2 million for the currentprogramme of project evaluation over thenext six months. This will include workintended to allow Welox to decide whetheror not to continue to participate. Welox willreceive an initial 18.6% interest in the pro-ject as security for this loan.

Should Welox decide to continue, it willinvest a further US$5 million to acquire thefull 32% interest, and will assume 50% of

SouthernEra’s other interests and obliga-tions in the joint venture, including payinghalf of the 14% net profits interest. Weloxwill also have the option of making a secondloan, of up to US$13 million, to fund furtherdevelopment.

Should Welox opt not to proceed, it mayrequire the initial loan to be repaid within60 days. If the loan is not repaid in this time,Welox will retain the 18.6%, or proportion-ate share thereof, as security. Welox will alsoreceive 500,000 warrants to buy shares inSouthernEra, in two tranches, the exerciseof which is related to the deal overCamafuca.

The Leviev Group, run by Israeli busi-nessman Lev Leviev, is well established inAngola, with an 18% interest in the Catocadiamond mine which is exploiting a kimber-lite pipe about 150 km south of Camafuca(MJ, February 12, 1999, p.94). Catoca is ajoint venture with Endiama and AlmazyRossii-Sakha, the Russian diamond pro-ducer. Last month, it was revealed thatLeviev has an interest in Ascorp, a tradingcompany established by the AngolanGovernment to handle the country’s dia-mond output (MJ, March 31, p.243).

. . . Belgium to helpAngola set up diamond

control systemStung by criticism contained in a recentUnited Nations report on trade in illegalAngolan diamonds that Antwerp hasextremely lax controls and regulations(MJ, March 31, p.243), the Diamond HighCouncil (HRD), which acts as promoterand overseer of Antwerp’s diamond trade,has announced that it is to assist theAngolan Government to establish a systemto curb illegal trade. Antwerp is estimatedto handle around 80% of the world trade inrough (uncut) diamonds and 50% of thetrade in polished stones, and Peter Meeus,general manager of the HRD, insists thatAntwerp has the strictest controls on dia-mond trade of any centre in the world.Controls, he argues, must be implementedat source but he says that Antwerp will notshirk its responsibility.

The HRD describes the new project inAngola as the installation of a “transparentand watertight infrastructure” to confirmthe origin of diamonds. The new controlsystem will be established in Luanda andwill be similar to that run by the HRD inAntwerp. The agreement follows earliermeetings in Antwerp between Mr Meeusand Antonio Sumbula, Angola’s deputyMinister for Geology and Mining. Thecouncil says it views the collaboration as anexample for the African market and hasindicated its willingness to “elaborate simi-lar initiatives with other African coun-tries”. ��

MINING WEEK

284 Mining Journal, London, April 14, 2000

exploration companies with promisingPGM properties. In Canada, the mostnotable of these partnerships involve thetwo largest primary PGM producers in theworld, Amplats and Impala. AngloAmerican Platinum Corp. Ltd (Amplats),the world’s leading primary PGM producer,and Vancouver-based Pacific North WestCapital Corp. (PNWC) are in a joint ven-ture which covers a number of PNWC’sproperties in Ontario. The companies arecurrently investigating the potential of theRiver Valley mafic intrusion, located 50 kmeast of Sudbury, for large-scale mineralisa-tion amenable to open-pit mining. PNWC ismanaging an exploration programme fund-ed by Amplats, and results from a firstphase of drilling have recently beenannounced (MJ, April 7, p.269).

Another joint venture in the River Valleyarea, adjacent to the PNWC/Amplats area,

is between Toronto-based MustangMinerals Corp. and Impala Platinum Corp.(Impala), the world’s second-largest prima-ry PGM producer, where a second phase ofexploration is in progress, to include geo-physical surveys and drilling (MJ,December 17, 1999, p.481). The RiverValley intrusion is a layered gabbro-anorthosite complex, with elevated PGMmineralisation near its contact with thecountry rock.

Mustang is also exploring at its East BullLake property, located about 80 km west ofSudbury. Mustang’s licence area covers theEast Bull Lake gabbro-anorthosite intru-sive complex, and includes a 30 km strike-length of the prospective margin of theintrusion. Recent drilling results indicatesignificant Pd-Pt-Rh mineralisation (MJ,March 17, p.213).

Outside North America, Amplats hasalso signed a joint-venture agreement withUK-based Eurasia Mining plc, which isinvestigating platinum properties in theUrals region of Russia (MJ, September 3,1999, p.180). Eurasia is exploring at theSoloviev Hill (Pt) and Baronskoye (Pd-Au)properties.

Amplats is currently funding a joint pro-gramme of works, including detailed metal-lurgical and analytical studies, in return forwhich it will earn a right to form a joint ven-

FOCUS

PGMexplorationaccelerates

The pace of exploration for platinumgroup metals (PGM) has increasedover the past six months, and a grow-

ing number of joint ventures have beensigned in recognition of the strong funda-mentals for these metals. Recent decreasesin the prices for platinum, palladium andrhodium are unlikely to dampen enthusiasmfor further deals, as a correction in the recentvery high prices had been widely predicted.

Speaking at the Prospectors andDevelopers Association of Canada (PDAC)conference last month, Geoffrey Christian,of CPM Group, predicted that the correc-tion would be short-lived, as he expectsRussian supply to be relatively limited. Inaddition, he forecast that physical demandfor PGM would be strong for the foreseeablefuture. Gordon Bassett, general manger ofprecious metals marketing at JohnsonMatthey, also speaking at the PDAC con-ference, agreed with Mr Christian, citingincreases in use of PGM in auto manufac-ture, jewellery, and industrial applicationssuch as computer hard drives.

New alliancesA number of major mining companies,

recognising the potential for growth in thesector, have set about forming alliances with

Mining Journal, London, April 14, 2000 285

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ture for a jointly-managed commercialdevelopment in the area. Eurasia recentlyannounced that geochemical surveys haddefined near-surface mineralisation trendson the Baronskoye property.

Recent agreementsMore recent agreements between majors

and junior exploration companies includeBilliton plc’s deal with Virginia Gold Minesto explore for PGM in the Caniapiscauregion of Quebec, on the Gayot property(MJ, January 21, p.40). The 322.5 km2 areacovers the Venus volcano-sedimentary belt,and has been sampled at an early stage bychannel sampling and trenching. In theevent that Billiton exercises its option,Virginia would be the operator of the jointventure for the next seven years.

Elsewhere in Canada, BHP and McVicarMinerals have signed a letter of intent toform a joint venture to explore in the LakeSuperior region of North America. Thecompanies are specifically looking forPGM-rich nickel deposits, based on theNorilsk model, and the Lake Superiorregion is considered the prime target for thistype of mineralisation by the companies.The three-year agreement provides forMcVicar to be the operator, although BHP

could take over operation on any Ni-PGMdiscovery.

In the US, Idaho Consolidated MetalsCorp. recently signed a joint-venture agree-ment with a subsidiary of Boulder GroupNL to explore for and develop PGM proper-ties in the Stillwater Complex of Montana(MJ, January 28, p.61).

The joint-venture route has also beentaken by Outokumpu Oyj of Finland andGold Fields Ltd of South Africa, on PGMproperties in Finland owned byOutokumpu. Gold Fields, the operator untilDecember 2002, is conducting a drillingprogramme at present, and will earn a 30%interest by spending US$5 million beforethe end of 2002, 49% by spending a furtherUS$6 million before the end of 2004, and51% by completing a bankable feasibilitystudy.

The major layered intrusive complexeswithin the joint venture’s 140 km2 area areat Penikat and Portimo. Drilling carriedout by Outokumpu in both areas hasintersected PGM mineralisation over 1 mthicknesses.

In a step up from the joint venture optiontaken by a majority of companies, AquariusPlatinum Ltd, an Australian PGM produc-er with mines in South Africa, has entered astrategic alliance with Impala, under theterms of which Aquarius will effectively actas Impala’s small-scale mining arm, allowedaccess to PGM projects in South Africa andaround the world, but only developingdeposits too small for Impala. Aquarius hasrecently completed a positive feasibilitystudy of its Marikana project in SouthAfrica, and is discussing funding withImpala and others (this issue, p.287). Alsoin South Africa, Toronto-based PlatexcoInc. commenced a bankable feasibilitystudy of the Winnaarshoek platinum pro-ject last year, and the study is scheduled tobe complete in the near future (MJ,September 24, 1999, p.237).

One of the largest targets being exploredby a single company is the Muskox intrusivecomplex in the new Canadian Territory ofNunavut, where Muskox Minerals Corp. isdrill-testing PGM mineralisation foundwithin a mafic-ultramafic intrusion exposedover a 50 km strike length (MiningMagazine, March 2000, p.130). Geophysicalstudies indicate that it extends for morethan 300 km under cover. Muskox geologistsbelieve that the complex bears striking met-allogenic and geochemical similarities to theNorilsk Cu-Ni-PGM deposit in Russia,supplier of the majority of the world’s palla-dium and a significant portion of its plat-inum (when exports allow).

Polymet Mining Corp. is investigatingmineralisation including PGM at theNorthMet polymetallic property, located atthe base of the Duluth mafic complex inMinnesota. The strike length of known min-eralisation at the NorthMet property isabout 5.6 km, and a resource estimate last

year by independent consultants put theindicated and inferred material at 411 Mt at0.07 g/t Pt, 0.25 g/t Pd, 0.2% Cu, 0.07% Niand 0.04 g/t Au.

At the Pedra Branca PGM property inBrazil’s Ceara State, Altoro Gold Corp. hassigned a letter of agreement with theHunter Dickinson Group, allowing HDG toearn a 60% interest in the property. Altorohas recently completed a drilling pro-gramme at Pedra Branca, intersecting sig-nificant platinum, palladium and rhodiummineralisation (MJ, March 10, p.197).

In New Zealand, Anzex Resources Ltdhas recently relinquished its explorationlicence at the Longwoods prospect, owing toan inability to attract a major company asjoint-venture partner. Anzex has nowfocused its activities on the Anglem proper-ty, in the same geological setting asLongwoods (MJ, March 17, p.214).

Production developmentsAmongst the more significant develop-

ments on the production front, NorthAmerican Palladium Ltd recently secured aletter of commitment from three Canadianbanks to provide funding for a major expan-sion at its open-pit mine at Lac des Îles,located 85 km north of Thunder Bay. Thecompany released an updated resource esti-mate for the mine late last year (MJ,November 19, 1999, p.413), and the expan-sion will nearly quadruple its present out-put of 64,441 oz/y of palladium and 4,774oz/y of platinum (1999 figures), to 248,900oz/y of palladium and 24,200 oz/y of plat-inum.

In South Africa, the improvement inPGM prices has encouraged Implats toreopen its Crocodile River mine, closed in1991 (MJ, February 11, p.107). The opera-tion is expected to resume production earlynext year, indicating that Implats is of theopinion that the PGM case for continuedprice increases in the long term is a strongone.

Amplats gave the go-ahead late last yearto a new mine at Maandagshoek, located onthe eastern limb of the Bushveld complex(MJ, December 24/31, 1999, p.493). NewPGM mines are also being commissioned,such as Kroondal, 45%-owned by AquariusPlatinum. Kroondal achieved full outputcapacity at the end of last year, the outputbeing taken by Impala’s Rustenburg refin-ery, as part of the two companies’ close rela-tionship (MJ, December 3, 1999, p.451).

With continued strong demand in a num-ber of applications, and supply from Russiaat best unpredictable and at worst non-exis-tent, the recent price drop in PGM is unlike-ly to have dampened enthusiasm for theprospects for platinum group metals. Therecent exploration surge by majors andjuniors alike is unlikely to diminish underthese conditions. ��

FOCUS

286 Mining Journal, London, April 14, 2000

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INDUSTRY IN ACTION

Mining Journal, London, April 14, 2000 287

Exploration

Gold Fields invests inTanami The South African gold producerGold Fields Ltd has signed a joint-venture agreement with Tanami GoldNL on Tanami’s Solitaire goldproperty in the Tanami-AruntaProvince of Western Australia.Solitaire covers a 1,650 km2 area ofthe trans-Tanami structural corridorwhich, the companies note, hosts goldmines at Callie and The Granites.Gold Fields will be able to earn up toa 60% interest in Solitaire byspending A$2.5 million onexploration within three years of theproject’s tenements being granted(for a 51% interest), and free-carrying Tanami through a bankablefeasibility study (for a total 60%interest).

Tanami’s chairman, JosephGutnick, sees Gold Fields’involvement, its first in theAustralian sector, as a strong backingfor the resource industry in Australia.Craig Nelsen, Gold Fields’exploration chief, says that the dealrepresents an important newcomponent of the company’sinternational strategy to formpartnerships with junior explorationcompanies.

NSW explorationdata on the webThe New South Wales (NSW)Department of Mineral Resourceshas placed data generated byexploration costing more than A$2billion on its website(www.minerals.nsw.gov.au). NSW’sMinister for Mineral Resources,Edward Obeid, says that theinformation is designed to be used bypotential investors, and is accessedusing software developed by theDepartment: Digital ImagingGeological System (DIGS). MrObeid notes that this is the first timesuch an extensive mining andexploration database has beenpublished in this way. “Companiesinterested in investing andexploration in NSW now have instantaccess to a vast bank of informationheld by the Department of MineralResources”, he says. The databaseincludes more than 30,000 geological,exploration and mining reports. Theinitiative is part of NSW’s Discovery2000 programme, designed toencourage minerals and petroleumexploration and investment.

Ecuador copperaccordFollowing an initial option agreementlast October, London-based Billitonplc has now signed a second optionagreement with Corriente ResourcesInc. of Canada in respect of anEcuadorian copper project. Corriente

now has an exploration option over anarea of some 230 km2 in southeastEcuador where Billiton hasdiscovered two porphyry coppersystems over the past five years.Neither of the systems, Chancho andWawayme, has been drilled butchalcocite is evident at the surface,and values of up to 1.6% Cu havebeen recorded over extensive areas.

Under the option terms, Corrientemay earn up to a 70% interest in anexploration joint venture byconducting work leading to afeasibility study and investing aminimum of US$2.5 million duringthe first two years. Corriente willissue to Billiton 500,000 unitscomprising one common share and afull purchase warrant over a period oftwo years. At various stages, Billitonwill retain the right to reacquire a40% interest through the provision offinancing to production, maintain its30%, or dilute to a 15% net profitsinterest. As part of the optionagreement, David Lowell of LowellMineral Exploration (LME) willmanage the exploration on behalf ofCorriente, and LME may take anequity interest in Corriente’s rights toany resultant joint ventures.

Lipangue assaysUS-based Medinah Mining Inc. hasreceived results from a second phaseof diamond drilling at the Alto deLipangue gold-copper property incentral Chile, located about 30 kmsouthwest of Santiago. Theprogramme was designed to test anextension to breccia-hostedmineralisation previously discovered,and returned the following betterresults:

Hole Interval Au Cu Ag(m) (g/t) (%) (g/t)

DDH L.99-08 123-221 2.29 0.27 16.73incl. 125-160 5.98 0.65 36.09

DDH L.00-09 168-174 5.93 0.81 23.30

Medinah considers that the secondphase of drilling at Lipangue wassuccessful in tracing the breccia pipeto depth and in defining the westernmargin of the pipe, which remainsopen at depth and in two directions.Further drilling programmes willconcentrate upon definition on theseareas. The company has commencedthe next round of drilling.

Diablillos drillingresults Pacific Rim Mining Corp. hasreceived drill assays from a diamond-drilling programme completed at theDiablillos silver property inArgentina by its partner Barrick GoldCorp. in August last year. The drillingwas designed to investigate silvermineralisation, and to twin reverse-circulation (RC) drilling completedpreviously. Some mineralisation atDiablillos is water soluble, and it wasthought possible that these salts mayhave been dissolved by RC drillingfluids and lost to testing. The

following better results were obtainedfrom the diamond-drillingprogramme:

Hole Interval Ag Au(m) (g/t) (g/t)

DDH-99-17 102.6-205.0 174.5 1.05DDH-99-18 102.6-230.5 119.9 1.45DDH-99-20 209.4-214.7 12.9 1.16

Pacific Rim notes that there is noconclusive evidence from the drillingthat the silver salts have beendissolved, and that assay intervalscan be higher in either RC or diamonddrilling or in neither, in a given twinset. Barrick holds a 70% interest inthe Diablillos project. To retain thisholding it must make a productiondecision by June this year, or continueto fund annual explorationexpenditures of US$4 million afterJune 2000 until a production decisionis made.

Nalunaq nuggeteffect addressedCrew Development Group hascommissioned Strathcona MineralServices to supervise a gradeverification programme this summerat Crew’s 50%-owned Nalunaq goldproperty in Greenland. Crew’sgeologists note that a strong nuggeteffect is present in drill-core sampling,and Strathcona has been retained todevise a scheme to sample themineralisation reliably. Speaking toMining Journal last week, Crew’svice president for exploration, JonSteen Peterson, noted thatcontinuous sampling within a 300 madit driven along the mineralised veinwhich comprises the knownmineralisation at Nalunaq hasshown that mineralisation isconsistent within three zones of lower,medium and higher-grademineralisation.

The company intends to drive twofurther adits along the vein, at 50 mvertical distance from the original,one above, one below. The originaladit will also be extended by at least100 m. Raises between the adits willthen be developed at 80 m intervals,to enable more detailed sampling, fora total of 500 m of raises. Strathconais to construct a sample tower with aprocessing capacity of 250 t/d. Crewintends to upgrade the knownmineralisation to at least 300,000 ozof contained gold within measuredand indicated resource categories.The balance of ownership of Nalunaqis held at present by Greenland’sNunaMinerals, a government-ownedcompany, but, with Crew providingthe majority of the C$7.2 milliondevelopment funding this summer,Crew will increase its ownership to65%.

Good results fromTulawakaPangea Goldfields Inc. reports whatit describes as “spectacularintercepts” from the latest diamonddrilling programme at its Tulawaka

gold project in Tanzania, includingone intersection assaying up to 258g/t Au over 2.7 m from 134 m downthe hole and another of 71 g/t over 6.6m at 68 m. Several holes in thecurrent programme have extendedthe mineralisation at depth and forsome 100 m along strike. The EastZone has now been shown to existover a distance of 1.1 km, and at thewestern extent Pangea reports thediscovery of a new vein 65 m south ofthe main structure.

Thus far, Pangea has completedsome 36,844 m of drilling to define themineralisation, comprising 20,875 mof reverse-circulation drilling, 8,353m of rotary air-blast drilling and7,616 m of diamond-core drilling. Thecompany says that the diamonddrilling has shown substantialincreases in grade compared to theaverage in the previously completedRC drill-holes, with an average todate of 32 g/t Au for the former asopposed to 18 g/t Au for the latter.Assaying has been carried out by SGSlaboratories in Mwanza.

Infill drilling on the East Zone isnow in progress in preparation for aresource calculation, and a feasibilitystudy is expected by the end of theyear. Tulawaka is a 70:30 jointventure between Toronto-basedPangea and Minières du Nord Ltée ofMontreal.

Newmont in KenoHill ventureNewmont Exploration of CanadaLtd, a wholly-owned subsidiary of theUS gold producer, Newmont MiningCorp., has agreed to earn a 51%interest in an existing explorationjoint venture between NovaGold andEagle Plains, by spending a minimumof C$3.75 million over five years onbehalf of NovaGold, and by makingpayments to NovaGold of C$200,000.Subsequently, the agreementprovides for Newmont to increase itsequity interest should it so wish.

The jv relates to the McQuestenproperty (formerly Wayne) located inthe Keno Hill mining district 40 kmnortheast of Mayo in the Yukon. Thearea comprises 46 claims andNovaGold can earn a 70% interest inthe property from Eagle Plains byspending C$1.0 million of whichabout 60% has already beenexpended. Drilling and trenchinghave indicated a large mineralisedsystem hosted within calcareousmetasediments and intrusive rocks.Two major zones have been identifiedto date, with grades from drill-holesranging up to 3.74 g/t Au over 18 m,and 2.16 g/t over 24 m.

Development

Marikana feasibilitypositive Snowden Mining IndustryConsultants and Dowding Reynard &

INDUSTRY IN ACTION

Associates have completed afeasibility study of AquariusPlatinum Ltd’s Marikana platinumgroup metals (PGM) project in SouthAfrica. The study indicates that bothopen-pit and underground miningmethods are economically viable atMarikana, and an optimisation studywill determine the method finallychosen. The open-pit reserve isestimated at 18.2 Mt at 3.91 g/tcombined PGM, and for anunderground operation an estimateof 15.5 Mt at 3.53 g/t PGM wasmade.

The Marikana orebody comprisesthe UG2 reef, which has a basin-likestructure in the deposit, extending toa maximum depth of 180 m. Thestudy envisages ore from the minebeing crushed and processed on site toproduce a PGM flotation concentratefor onward sale to Impala Platinum’srefining unit, and a chromeconcentrate for sale as a secondaryproduct for the production offerrochrome. Initial capital costs ofthe project are estimated at US$70million for the underground option,and US$72.8 million for the open-pitscenario, and Aquarius reports thatdiscussions are well-advanced withparties to provide debt and equityfinance.

Cambior withdrawsfrom Lac DoreWith immediate effect, Cambior hasadvised its joint-venture partner inthe Lac Dore vanadium project nearChibougamau, Quebec, that it iswithdrawing. The project is in thefinal feasibility stage and under theterms of a joint-venture agreementsigned in June last year, Cambior wasto earn a 40% interest by completinga bankable feasibility study not laterthan June 30 this year. The jv nowreverts to a previous arrangementbetween Soquem Inc. (20% interest)and McKenzie Bay Resources Ltd(80%). Cambior will retain nointerest in the project although it willreceive an amount of McKenzie Baycommon shares converted atUS$2.00/share and equal to 20% ofthe amount of Cambior’sexpenditures. Cambior spent in excessof C$300,000 on mapping, samplingverification, relogging drill holes,baseline environmental studies plusvarious other feasibility costs.

McKenzie Bay is now the operatoronce more and must deliver anindependent bankable feasibilitystudy to Soquem by August 31 nextyear. Upon completion andacceptance of this study, Soquem hasthe option to acquire a 20% stake bypaying 20% of the capital costsrequired for a mine and refinery.

Emily Ann off-takeagreementLionOre Australia (Nickel) Ltd hasreached agreement with Inco wherebythe Canadian company will purchaseall of the nickel concentrate from theEmily Ann nickel sulphide deposit in

Western Australia. LionOre willprovide at least 6,000 t/y ofconcentrate and in return it is toreceive a US$16 million loan tofinance the construction of the milland related facilities at Emily Ann.Before proceeding, the project willrequire consents from third parties,the issuance of governmental licences,and financing for the actual mine. Ifthese requirements are satisfied,initial production could begin as earlyas the March quarter of 2002.Discovered in 1997, Emily Anncomprises massive and disseminatedsulphides with a total resource ofsome 2.2 Mt averaging 3.7% Ni.

The agreement with LionOre is thesecond long-term supply agreementreached by Inco with an Australiannickel producer. By mid-year, itsManitoba division expects to receiveits first nickel concentrate shipmentfrom the Cosmos project, a high-grade sulphide resource in WAcontaining some 420,000 t at 7.52%Ni, owned and operated by JubileeGold Mines NL. The cost ofdeveloping this project is estimated atA$38 million.

Magistral goldreserve estimateQueenstake Resources Ltd, as part ofa continuing feasibility study of theMagistral gold project in Mexico, hasreceived a reserve estimate fromconsultants Kappes Cassiday andAssociates, and Pincock, Allen andHolt. The reserves have beenestimated for four deposits consideredmineable by open-pit methods, andtailings from historical operations atthe site. Proven and probablereserves, at a gold price of US$300/oz,have been estimated at 6.2 Mt at agrade of 1.87 g/t Au, based on a seven-year mine life and pre-productioncapital costs of US$13.4 million.

A high-grade mineralised zone hasbeen discovered recently at depth inthe Samaniego Hill area, the site ofthe first proposed open pit, and thisarea remains open at depth and alongstrike. Queenstake notes that thecurrent reserve estimate ispreliminary, as the feasibility study iscontinuing, and the estimate maychange.

Kenmare completesMozambicanprefeasibility Kenmare Resources plc, based inIreland, has completed aprefeasibility study of its titaniummineral sands property inMozambique, known as Congolone orMoma. Since 1993, the project hadbeen a joint venture with BHP, butthe major withdrew last year, afterspending US$10 million (MJ, June25, 1999, p.477). BHP did not earnany equity in the project. A resourceestimated at over 1,000 Mt has beendelineated by BHP’s efforts, with anaverage grade of 3.61% heavyminerals.

Kenmare forecasts an undersupplydeveloping in the titanium feedstockmarket by 2003, and plans to exploitthe market window. A full feasibilitystudy is scheduled for completion bythe end of this year.

Kenmare managed to acquire thewet concentrator plant utilised byBHP as part of its Beenup mineralsands operation in Western Australiafor A$2.5 million prior to its closure(MJ, January 14, p.25). The planthas been valued at A$67 million.

Chloride option forgold recoveryResearchers at Australia’s MonashUniversity have worked out how touse chloride to extract gold from ore,instead of cyanide, according to areport in New Scientist. Thephysicists have identified a type ofactivated carbon that keeps the goldchloride ion intact, rather thanseparating on contact with carbon, asis the case normally.

Algerian minesfor sale The Algerian Mining and EnergyMinister, Dr Chakib Khelil, says thatthe government is to offer 48 smallmining operations to privateinvestors, and is drafting a new lawdesigned to increase foreignparticipation in the mining andhydrocarbon industries. Commoditiesextracted by the mines include gold,semi-precious stones and marble, andthe tender will be launched on April15. “Algerian investors will have theopportunity of going into jointventures with foreign companies”says Dr Khelil, and he notes that thecurrent mining law “is not adequate”.The new law is scheduled to bepresented to the government in May(MJ, March 31, p.244).

BHP faces freshOk Tedi legal battle An Australian legal practice isinstigating proceedings againstBHP Ltd and Ok Tedi Mining Ltd(Ok Tedi) on behalf of locallandowners, over tailings disposal atthe giant copper mine in Papua NewGuinea. The action harks back to asimilar case four years ago, alsoinvolving Slater and Gordon, whichwas settled out of court (MJ, June14, 1996, p.457). The currentallegation is that BHP and Ok Tedihave not met their obligationsunder the settlement agreed in 1996.BHP and Ok Tedi refute theallegation, saying that although thesituation has not changed, they areobliged to implement any tailingsoption recommended by anindependent inquiry conducted bythe PNG Government, and PNGhas not yet conducted such aninquiry.

Ok Tedi completed a study of thevarious options available last year,costing over US$100 million (MJ,June 11, 1999, p.434).

Saindak updateWe are informed by a seniorrepresentative of Saindak Metals Ltdthat an earlier article in MiningJournal concerning the Saindakcopper project in Pakistan did not givea balanced picture of the currentsituation (MJ, February 11, p.108).Operations were halted at theconcentrator in May 1996 and at themine in September of that year, butsince then, and contrary to suggestionsin our report, SML says that allequipment has been maintained andthat all major components in theconcentrator are regularly operatedwithout load. On financing, SMLpoints out that the working capital ofRs1.5 billion (US$1=Rs43.63) soughtby SML was never refused but put on‘hold’. It says that the project is freefrom all encumbrances, as all loans,both local and foreign, have beenassumed by the Government ofPakistan, the project owner.

Sunrise Damexpansion mooted AngloGold Ltd’s board of directors isto be asked to approve an expansionof the Sunrise Dam gold mine inWestern Australia. Sunrise Dam wasacquired in AngloGold’s agreedtakeover of Acacia Resources late lastyear (MJ, December 24/31, 1999,p.508). AngloGold’s head of businessdevelopment, Nigel Unwin, says thathis team is assuming and hoping thatit will be approved, at an estimatedcost of about A$90 million.

Diavik makes upground The construction timetable of theDiavik diamond project in Canada’sNorthwest Territories is back ontrack, after a late start was remediedby an “aggressive’’ shipping schedule.Construction was delayed by the lateapproval of a permit for an ice road,required for the transport ofmaterials. The permit was grantedlast month (MJ, March 17, p.207),but the challenge was to build fueldumps and fill them with about 9 Mlof fuel before the weather interruptedoperations.

Andrew Adams, chief financialofficer for Diavik Diamond MinesInc., the operator of the project, saysthat further good news was receivedlast week when a 30-year lease for theproject area was granted by theCanadian Government. DiavikDiamond Mines, a Rio Tintosubsidiary, holds 60% of the project,and Aber Diamond Mines Ltd, asubsidiary of Aber Resources Ltd,holds 40%.

Benguet securesapproval forPantinganBenguet Corp. has received approvalfrom the Philippines Department ofEnvironment and Natural Resources

288 Mining Journal, London, April 14, 2000

for its proposed mineral production-sharing agreement (MPSA) in respectof the Pantingan gold project nearManila in Bataan Province. AnMPSA covers a period of 25 years andproduction sharing is usually 60% infavour of the government and 40% infavour of the private contractor. AllMPSA applications are assessed bythe Mines and Geosciences Bureau.

The Pantingan property coversabout 1,410 ha of mineral claims andwas acquired by Benguet in 1996through an agreement with the claimowner, Balanga-Bataan MineralCorp. Preliminary mapping andsampling, according to Benguet, hasindicated seven major epithermalgold systems traceable for distances ofup to 1,000 m. The company’spreliminary estimate is that therecould be a resource of up to 1.2 Moz ofgold.

Sumitomo plansexpansionsSumitomo Metal Mining Co. Ltd hasworked out what the company’spresident, Koichi Fukushima, terms acorporate revival programme. MrFukushima says that the revival isnecessary after a nuclear accident lastyear at its subsidiary JCO Co.damaged the company’s reputationand earnings. The programmeenvisages a dramatic increase inSumitomo’s nickel and copper outputcapacity in Japan, raising electrolyticnickel production from the current36,000 t/y to 60,000 t/y, and copperfrom 230,000 t/y to 400,000 t/y.Sumitomo, which usually buys nickelmatte from PT Inco and WMC, willalso invest in lateritic nickel projectsin the Asia-Pacific area. No timetablehas yet been set for the expansions.

Production

Robe River record . . .North Ltd reports that the RobeRiver iron ore operation in WesternAustralia achieved record sales of ironore in the 12 months to March 31 thisyear. North holds a 53% interest inRobe River Iron Associates (65%including minority interests). Themine shipped 30.6 Mt, and the totalamount of material mined from theMesa J deposit was 53.8 Mt,outstripping the previous record of40.5 Mt by about 33%. The balanceof ownership of Robe River is held byMitsui (33%), Nippon SteelAustralia (10.5%) and SumitomoMetal Australia Pty Ltd (3.5%).

. . . BHP offer-freezeshortenedThe duration of the injunction to stopBHP Iron Ore from offeringindividual contracts to workers,obtained by unions representingemployees at BHP’s iron oreoperations in Western Australia, has

been effectively shortened. A FederalCourt decision restricted the durationof the restraint until further order,rather than until a final hearing of thecase, as before. The unions sought theinjunction after BHP began offeringcontracts directly to employees,rather than through collectivenegotiations with the unions (MJ,January 21, p.42).

Gresik output belowtarget Misubishi Materials Corp., 60.5%-owner of the Gresik copper smelter inIndonesia, reports that the facilityproduced 102,234 t of electrolyticcopper last year. The company hadsome start-up problems early lastyear, and had previously forecast anoutput of 110,000 t for 1999. Theplant is scheduled to produce 180,000t/y of electrolytic copper this year.The balance of ownership at Gresik isheld by Freeport-McMoRan Copperand Gold’s Indonesian subsidiary(25%), Mitsubishi Corp. (9.5%), andNippon Mining and Metals (5%).

Chinese zincambitionsSpeaking at a lead and zincconference held in the southernChinese city of Guilin, a senioranalyst with China’s National Non-ferrous Metals Industry AntaikeInformation Centre has suggestedthat over the next five years upgradesand expansions at 15 of China’s smallzinc smelters, combined with newsmelter projects, could add at least500,000 t/y to existing capacity. MsFeng Juncun added that theadditional capacity could boostChina’s annual exports to around560,000 t by 2003 from 504,000 t in1999. She said that the smeltersplanning expansions will add a totalof 442,000 t, and that four newsmelters with a combined capacity of250,000 t/y are on the drawing board.The only planned closure is LiuzhouZinc’s 20,000 t/y electrolytic smelter.The upgrades and new capacity willdepend on funding availability andmarket conditions, but Ms Feng saidthat the additional 500,000 t/ycapacity over five years is aconservative estimate.

Another speaker at the conference,Joe Singer of the metal consultancyand trading company Penfold Ltd,was sceptical, and suggested that zincexpansion would be constrained bythe availability of zinc concentrates.He doubted that the export targetwould be realised.

Canadian zinc outputresumes Production has resumed at Noranda’sBell-Allard zinc mine in northernQuebec, more than one month afteroutput was halted when anunderground shaft was damagedwhen a hoisting skip malfunctioned.The repair costs were less than C$1.0million, according to Noranda. The

start-up at Bell-Allard coincided withnews that Noranda expects fullproduction to resume this week atits Brunswick zinc operations, 12days after damage to an ore conveyorhalted the operation (MJ, April 7,p.271). The mine produces 2,000 t/dof zinc concentrate.

Asahan output riseplannedThe aluminium smelter operated byPT Indonesia Asahan is expected toproduce about 200,000 t of aluminiumin the 12 months beginning on April1. The company announced anincrease in use of its 225,000 t/ycapacity last year (MJ, October 15,1999, p. 305), and further increasesare in progress. Output for the 12months to March 31 is expected toreach about 125,000 t, according toReuters. The Asahan smelter is 59%owned by Nippon Asahan AluminiumCo. Ltd, and the balance is held bythe Indonesian Government.

South African goldoutput forecastChris Thompson, chairman of GoldFields Ltd of South Africa, says thatthe total production from mines inSouth Africa this year is expected tofall below 400 t. Mr Thompsonattributed the decline to falling oregrades, combined with the challengeof mining at over 3 km depth. In the1970s, South African gold productionexceeded 1,000 t/y, but output fell toabout 600 t in 1992 and 480 t in 1998,and last year’s output is estimated at415 t.

MeetingsThe following is a list of meetings andconferences scheduled for the comingmonths that may be of interest toreaders. A fuller listing may beobtained by visiting the MiningJournal website at www.mining-journal.com� May 2-3, West African Minerals,London, UK. The ConferenceBusiness Ltd, Maxwelton House, 41Boltro Rd, Haywards Heath, WestSussex RH16 1BJ, UK. Tel: (+441444) 416 678. Fax: 441 162. E-mail:mail@busbrief.demon.co.uk� May 3-5, 2nd Indian IndustrialMinerals Conference, Mumbai, India.Conference Dept., IMIL, ParkHouse, Park Terrace, Worcester Park,Surrey, KT4 7HY, UK. Tel: (+44 20)7827 9977. Fax: 8337 8943. � May 7-11, 8th World SaltSymposium, The Hague, Netherlands.Dr Justus M. de Jong. Tel: (+ 31 74)244 3908. Fax: 244 3272. E-mail:salt.2000@inter.nl.net Website:www.salt2000.nl� May 9, IMM Southern CountiesBranch Annual Special InvitationMeeting, London, UK. Subject:Biotechnology in mining. Speaker:Brian Gilbertson, Billiton plc. Tel:

(+44 1189) 626 765. Fax: 626 766.E-mail: alanbax@aol.com� May 9-13, Expomin 2000, WorldMining Exhibition for Latin America,Santiago, Chile. Expomin 2000,Casilla 40 D Correo Central, SantiagoChile. Tel: (+56 2) 530 7000. Fax: 5331667. E-mail: gsolis@fisa.clWebsite: www.fisa.cl � May 9-13, Clean Technologies forthe Mining Industry, Santiago, Chile.Dr Mario Sánchez, DepartamentoIng. Metalúrgica, Edmundo Larenas270, Casilla 53-C, Concepción, Chile.Tel: (+56 41) 204241. Fax: 243418.E-mail: msanchez@udec.cl� May 9-13, Mining China 2000,Beijing. Metallurgical Council of theCCPIT, Ms Zhang Lingyun, 46Dongsi Xidajie, Beijing 100711,China. Tel: (+86 10) 6522 0753. Fax:6523 3861. E-mail:mcexpo@metallurgy-china.com � May 12-14, 2000 IAEG AnnualConference, Galway, Ireland. LeoFuscardi, c/o The Lisheen Mine,Killoran, Moyne, Co. Tipperary,Ireland. Tel: (+353) 504 45618. Fax:504 45700. E-mail:lfuscardi@lisheenmine.ieWebsite: www.iaeg.org� May 16-18, Uzmin 2000 – The 2ndUzbekistan Mining and MetallurgyExhibition, Tashkent, Uzbekistan.Dan Thurlow, ITE Group, 105Salusbury Road, London NW6 6RG,UK. Tel: (+44 20) 7596 5213. Fax:7596 5128. E-mail:Dan.Thurlow@ite-exhibitions.com� May 21-23, IMA 2000 InternationalMagnesium Conference, Vancouver,Canada. International MagnesiumAssociation, 1303 Vincent Place,Suite 1, McClean, VA 22101, US. � May 21-24, ICARD 2000 –International Conference on Acid RockDrainage, Denver, US. Society forMining, Metallurgy and Exploration,PO Box 625002, Littleton, CO 80162-5002, US. Tel: (+1 303) 973 9550.Fax: 979 3461. E-mail:meetings@smenet.org� May 31-June 1, New YorkInvestment in Mining Conference,New York, US. Martin Rothman,International InvestmentConferences, 6310 Sunset Drive,Miami, FL 33143-4823, US. Tel: (+1305) 669 1963. Fax: 669 7350.E-mail: iiconf@iiconf.comWebsite: www.iiconf.com � June 5-8, Geodesa 2000, Dar esSalaam, Tanzania. Barthold Schroot,Geodesa project, SEAMIC, PO Box9573, Dar es Salaam, Tanzania. Tel:(+255 51) 650321. Fax: 650319.E-mail: geodesa@cats-net.comWebsite: www.seamic.org� June 6-9, International trade fair formining technology, Novokuznetsk,Russia. Norbert Schmidt, MesseDusseldorf International, Dusseldorf,Germany. Tel: (+49 211) 4560 705.Fax: 4560 740. E-mail:SchmidtN@messe-duesseldorf.de� June 12-14, 1st US-InternationalCoal Conference, Washington. CoalExporters Association, 1130 17thStreet NW, Washington, DC 20036,US. Tel: (+1 202) 463 2639. Fax: 8339636. E-mail: cea@nma.org

INDUSTRY IN ACTION

Mining Journal, London, April 14, 2000 289

Pre-roughing of wolfram ore in flotation cells is a diff-icult and highly critical application in the production ofplatinum. So when Anglo American Platinum Mines in South Africa wanted to install new flotationcells for this process, it was perfectly natural for them toselect Svedala as the supplier. Especially becauseSvedala guaranteed an increase in the recovery rate.

-In the spring of 1999 we replaced a bank of almost 100 existing cells with several large units, saysMornay Kerr, Process Division Manager for SvedalaSouth Africa. Anglo American’s decision was based on the excellent metallurgical results that our cells hadshown and on the guaranteed increase in productivity.

-The entire installation was completed in only fourmonths in order to minimize downtime, which ourcustomer also appreciated.

-Naturally, the cells had to meet all of AngloAmerican’s stringent specifications and we were able todo so at a competitive cost. Svedala is also responsiblefor periodic inspections in order to maintain peak performance.

The guaranteed increase in the recovery rate has been fulfilled. This helps to explain why Svedala hasreceived three more orders for flotation cells from AngloAmerican Mines since last April.

Svedala is the world’s leading supplier of completesystems and comprehensive service to the mineral-processing, construction and recycling industries.Quality products and deep expertise in systems andprocesses enable us to help our customers maximiseoperational uptime and cut costs.

Higher productivity at competitive cost.Guaranteed.

ornay Kerr

ocess Division Manager

edala South Africa

S V E D A L A

Reliability in operations

Svedala Industri AB (publ), P.O. Box 4004, SE-203 11 Malmö, Sweden. Tel +46 40 24 58 00, Fax +46 40 24 58 78, www. s v e d a l a . c o mSvedala serves customers in Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, China, Croatia, the Czech Republic, Denmark, Finland,France, Germ a n y, Ghana, Hong Kong, Hungary, India, Indonesia, Italy, Japan, Lebanon, Macedonia, Malaysia, Mexico, The Netherlands, New Zealand, Norw a y,P e ru, The Philippines, Poland, Russia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Tu r k e y, Ukraine, United Arab Emirates, the UK, the US,Uzbekistan, Venezuela, Vietnam, Yugoslavia, Zambia and Zimbabwe. Authorized Svedala agents and distributors cover virtually every other part of the world.

TECHNOLOGY TODAY

Canada’s BacTech MetallurgicalSolutions Ltd has secured C$2 millionin financing from RothschildAustralia Golden Arrow InvestorsLtd. The combined debt and equityfunding package will be used by thecompany to fund partially its jointventure with Mexico’s IndustriasPeñoles SA de CV and to identify,evaluate and acquire interests inother projects amenable to thecompany’s bacterial leachingtechnology.

BacTech is developing thebacterial leaching technology inconjunction with South Africa’s state-owned mineral research organisationMintek. The technology uses avariety of bacterial cultures atambient pressures and working attemperatures ranging from 30oC to80oC. The aim is to accelerate theoxidation of metal-bearing sulphidesand place the metals into solution orliberate metals such as gold, thusmaking them available for furtherprocessing. The reactions take placein a bioreactor and BacTech andMintek are evaluating severaldesigns including one produced byDutch-based Paques Bio SystemsBV, a company that specialises inusing bacteria to treat industrialwaste water streams. BacTech saysthat the Paques Circox® reactoroffers a number of advantagesbecause it is characterised by gentlemixing of the bacteria andconcentrate which is expected toprovide a better living environmentfor the more fragile hightemperature (more efficient)bacterial culturethat they are investigating.

BacTech has a 45% interest in thejoint venture with Industrias Peñoleswhich is designed to test thefeasibility of commercial-scalecopper bacterial leaching. The pilotplant is being built near Monterreyin Mexico and is designed to producecopper metal at a rate of about 1 t/d.Under the terms of the joint venture,Peñoles will contribute up to US$4.9million in funding for the feasibilitystudy and construction of the pilotplant. In addition, the joint venturehas the rights to build and operatethe copper bioleaching technology inMexico and five other LatinAmerican countries.

Once the pilot plant has beenestablished, the joint venture isconsidering the construction of a20,000 t/y plant that will processcopper concentrates from variousoperations in central Mexico. Theplant’s modular design will enableoutput to be easily expanded to50,000 t/y.

BacTech’s technology was firstused at the Youanmi gold mine in

Australia in 1994 and more recentlyat the Beaconsfield gold mine inAustralia, and is being investigatedfor use at gold mines in China andFinland. The company is alsoinvestigating its use to extract copperand nickel at a project in Montana,and is seeking to test its relatedchalcopyrite heap leachingtechnology.

Alan Spence, Chairman, BacTechMetallurgical Solutions Ltd, 150King Street West, Suite 2602, Box15, Toronto, Ontario, M5H 1J9,Canada. Tel: (+1 416) 596 9850.Fax: 596 9840. E-mail:bactech@netcom.ca

SRK expands SRK Consulting (Australasia) PtyLtd says that its business isexpanding at such a rate that, as wellas recruiting personnel fromAustralia, it is recruitingunderground mine engineers fromAfrica and environmental specialistsfrom North America. According toPeter Williams, managing director ofSRK Consulting, it is a continuouschallenge to employ the righttechnical consultants as the marketneed arises. Dr Williams says thateither demand, especially in thefeasibility area, is picking up, or elsethe consulting pool of expertise inAustralia has diminished. Thecompany is also expanding its waterteam and Chris Langton, thecompany’s new general manager foreastern Australia and the director ofthe water team, expects to add tenconsultants to the east coast SRKteam this year.

SRK Australasia has been rankedas one of Australia’s fastest growingprivate companies and has the thirdhighest growth in turnover over thepast ten years; in the period 1995 to1999 turnover grew by 430%.

SRK Consulting (Australasia) PtyLtd. Website: www.srk.com.au

Thuraya onscheduleThe Thuraya satellite phone service ison schedule for launch in theSeptember quarter of 2000. Unlikethe failed Iridium service (MJ,March 24, p.228), Thuraya is not aglobal service but focuses on Europe,Central Asia, North and CentralAfrica, the Middle East, and theIndian sub-continent. The system isbased around a singlegeosynchronous satellite andcombination GSM/satellite handsets.

The handsets are similar to normalGSM handsets and have similarfeatures and will use ground-basedGSM networks. However, where GSMnetwork coverage does not exist, thesatellite system will be used. A thirdfeature of the handsets is a GPSsystem that will enable users to fixtheir location to within 100 m.According to Thuraya’s chairman,Mohammed Hassan Omran, thesystem presents users with a powerfulcommunications tool at a highlycompetitive cost.

Thuraya SatelliteTelecommunications, PO Box 33344,Abu Dhabi, United Arab Emirates.Tel: (+971 2) 333 888. Fax: 330 064.Website: www.thuraya.com

Tintaya contractawardedBHP has awarded the engineering,procurement and constructionmanagement contract for its Tintayacopper oxide project in Peru toKvaerner E&C. The oxide project willincrease production from Tintayafrom the current level of over 85,000t/y of copper contained inconcentrates to more than 110,000t/y, as well as reducing overall cashproduction costs.

Bechtel completed a feasibilitystudy on the oxide project in 1998,since when BHP has carried outadditional geological work. The studyis now expected to be updated by July,with a construction schedule for theproject of around 12 months afterreceiving Board approval.

Shearers forBelarusLong-Airdox has received orders fromthe Belarus potash industry for afurther three longwall shearers,

together with what the companydescribes as “significant sparecomponentry”. The completepackage is scheduled for stageddelivery this year.

The equipment comprises aModel EL700SOL double-endedranging drum shearer package andtwo complete EL340SOL single-ended ranging drum units. By thebeginning of next year, Long-Airdoxwill have supplied 13 shearers toBelarus, where it has two serviceengineers permanently on site,supported from the company’sfacilities in the UK.

Long-Airdox Co., Virginia TechCorporate Research Center, 1750Kraft Drive, Blacksburg, VA 24060,US. Tel: (+1 540) 552 5555. Fax: 5525525.

Alstomrefurbishes BigPit winderAlstom Control and Drives hascompleted a refurbishment project,consisting of the installation of anew dynamic braking system, to themine hoist at the Big Pit miningmuseum in south Wales. The hoistprovides access for visitors to theunderground section of the museum,and needed the work to provide abackup to its existing mechanicalbraking system.

Alstom’s contract included theprovision of new air-brake reversingcontactors, the new dynamic brakingsystem and refurbishment of thedriver’s chair and levers. Thecompany was responsible for thesystem design, supply, supervision ofinstallation, cabling, commissioningand driver training.

Elaine West, Alstom Drives andControls Ltd, Broughton Road,Rugby, Warks. CV21 1BU, UK. Tel:(+44 1788) 563563.

BacTechsecures funding

The winding gear atthe Big Pit museumin Wales.

Mining Journal, London, April 14, 2000 291

MINERAL MARKETS

In what may well prove to be one of themost significant developments in the goldindustry in recent years, the world’s largestgold producer AngloGold, a leading finan-cial institution, J.P. Morgan, and the largestprivately-owned gold refining and manufac-turing company, PAMP, have formedGoldAvenue, an independent company thatwill offer a range of products and servicesfor businesses, investors and consumers inthe gold market over the world wide web. Inaddition to providing market knowledge,technology and staff, the three companieshave invested some US$20 million as seedcapital.

The partners plan to provide a compre-hensive range of gold-related services andinformation via the www.goldavenue.comwebsite. Initially, this will focus on gold jew-ellery – according to GoldAvenue, in thefirst two months of this year online jew-ellery sales in the US totalled US$160 mil-lion, a 56% increase on total online sales in1999. The company says that ForresterResearch conservatively estimates that by2003 the online US jewellery market will beworth US$950 million. As well as jewellery,the website will offer solid gold watches andbullion and gold items.

Following the establishment of the retailjewellery component, GoldAvenue willgradually add other services including goldsavings and investments, financial servicesand gold trading and product and marketinformation. AngloGold’s managing direc-tor, Kelvin Williams, says that the ventureis open to new partners joining, particularlyspecialist retailers.

AngloGold’s chief executive, BobbyGodsell, says that the website will offeropportunities for individuals all over theworld to “acquire gold, hold gold, trade goldand find out about gold.” Mr Godsell is con-fident that the venture will be profitableand that it will create wealth for the compa-ny’s shareholders. The website is scheduledto start limited operations in the summer ofthis year with a full-scale launch scheduledfor the September quarter in readiness forthe Christmas buying season.

The formation of the new company is asignificant development for the gold indus-try because gold producers have in the pastalways been price takers, and their abilityto add value to their output has been ham-pered by the high entry costs of establishingmanufacturing and retail outlets. In thepast AngloGold has raised the profile of itsgold by sponsoring jewellery design compe-titions. However, by partnering with J.P.Morgan and PAMP, it has created global

marketing potential for its gold and, impor-tantly, should be able to add significant val-ue to its output whilst avoiding the highcosts of establishing traditional distributionand retail networks. ■■

Swiss announce plansThe Swiss Finance Ministry has said thatthe country will officially abandon the goldstandard on May 1 when its new currencylaw comes into force. As a result of the lawchange the Swiss National Bank (SNB)expects to start its gold sales early nextmonth. The SNB has gold reserves of 2,500t and, under the terms of the new currencylaw, has some 1,300 t of gold surplus torequirements. The bank said that it willinform the markets closer to the time abouthow it will proceed with the sales.

The SNB is a signatory to last year’sagreement capping gold sales and lendingactivities by 15 central banks (MJ, October1, 1999, p.268). However, depending on thedisposal plans of the other signatories, it ispossible that the SNB will be able to disposeof almost all of the 1,300 t of gold in as littleas five years. Despite being within the goldsales framework, the Swiss news, because itfollows so closely after the Austrian sales(MJ, April 7, p.273), depressed the marketand prices dipped towards US$280/oz. ■■

Metals recover fromsell-off

After being battered last week by a wave offund selling, base metal prices on theLondon Metal Exchange this week man-aged to pull back some lost ground. Thestrongest recoveries were staged by nickel,zinc and surprisingly tin, all of which bene-fited from the reassertion of fundamentalsover technical activity.

Nickel regained virtually all of the lossesin last week’s sell off. The three-monthsprice rose as high as US$9,800/t and thecash to three-months backwardation of overUS$150/t indicates that the market remainstight. Analysts believe that it is only a mat-ter of time before prices revisit theUS$10,000/t level attained last month.Nickel is receiving considerable supportfrom the expectations that the negotiationsthat started this week between Inco and theUnited Steelworkers of America union rep-resenting workers at its Sudbury divisionwill not go smoothly and some disruptionwill occur.

Zinc prices were also emboldened byindustrial action. White-collar workers atUnion Minière’s Balen smelter in Belgiumwalked out at the end of last week and theirblockade threatened to force the closure ofthe 250,000 t/y smelter. The dispute hasnow been resolved but the three-monthszinc price remains strong and is holding wellabove US$1,100/t. Market sentiment isbeing aided by tight supplies in Europe andthe US, and an indication of the tightnesswas given this week when the cash to three-months spread went into a small backwar-dation at one point.

Tin, which has had a less than inspiringperformance this year, was also buoyed byindustrial action. However, unlike zinc itwas affected not by one particular operationbut rather by a whole country – Bolivia, theworld’s sixth largest tin producer, has beenin turmoil for some weeks with violentnationwide protests against attempts bythe government to increase water charges insome areas. The potential for supply disrup-tion helped the tin price stall its downwardtrend and the price of three-months metalrose as high as US$5,500/t after falling aslow as US$5,325/t last month. ■■

LMEX launchedIn a bid to broaden the investment appeal ofLondon Metal Exchange traded metals theexchange has launched the LME index con-tract – LMEX (MJ, April 9, 1999, p.266).The new contract is targeted at investorssuch as pension funds, investment funds,stock market arbitrageurs and banks, and isbeing promoted as a way of diversifying thetraditional equity and bonds investmentportfolio.

The LME says that, while there are anumber of other commodities indices,LMEX offers investors a number of advan-tages. An important feature is that it isexchange traded. This, it says, providesinvestors with the security of clearing andstability, avoiding the difficulties that canoccur with over-the-counter products. Theindex is cash cleared and settled, and as aresult investors will not have to deal withthe physical delivery, storage and transac-tion costs associated with the underlyingLME contracts. It is also a highly focusedindex – many other commodities indicesare made up of a wide basket of commodi-ties including agricultural, livestock andenergy. Standard Bank’s metals analyst,Robin Bhar, notes that since 1985, industri-al metals and energy have offered the high-est long-range return of any commodityinvestment.

All of the LME ring-dealing membersand a number of associate clearing membershave indicated that they are prepared tomake a market in the index. The index wasset at 1000 on January 4, 1999 and on April12 was 1,264.80. ■■

292 Mining Journal, London, April 14, 2000

New avenuefor gold

MINING FINANCE

Traditionally the first of the major metalsproducers to report its quarterly earnings,Aluminum Co. of America Inc. (Alcoa) hasposted attributable net income of US$355million for the three months to March 31,2000, a rise of 61% compared with the cor-responding quarter of last year. Sales andother operating revenue rose by 14%, toUS$4.5 billion, mainly as a result of higherprices. Shipments of aluminium products,including primary, flat-rolled and engi-neered products, were virtually unchangedat 1.13 Mt, but Alcoa’s average realised pri-mary aluminium price of US$0.79/lb was25% higher than that received in the Marchquarter of 1999.

All main product sectors made higherrevenue contributions compared with theMarch quarter of last year, with aluminaand chemicals rising by 29% to US$540 mil-lion, primary metal up 14% to US$611 mil-lion, flat-rolled products 11% higher atUS$1.40 billion and engineered productsgaining 12% to US$1.05 billion.

Primary metals continued to be thelargest contributor to post-tax operatingprofit, providing 41% of the total ofUS$558 million. This share compares withthe 33% (of only US$295 million) that pri-mary metals contributed in the Marchquarter of 1999, reflecting the strong rise inthe primary aluminium price between thetwo periods and the high level of leverage ofthe earnings of the primary sector to theprice. Alumina and chemicals contributed28% of the total, compared with 20% of the(much smaller) total in the March quarterof 1999, reflecting a similar gearing to thealumina market, where prices have beensqueezed upwards in recent months by ashortage of this intermediate product. Theless volatile earnings from the flat-rolledand engineered-products businesses roserather less in absolute terms, and their oper-ating profit contributions thus fell in rela-tive terms. The former contributed 13%,compared with 22% in the March quarterof last year, and the latter 9% comparedwith 15%.

Apart from the effects of higher realisedprices, Alcoa’s March quarter profit wasboosted by cost control. The 14% rise insales and other operating revenue from theMarch quarter of last year thus compareswith a 6.5% increase in the cost of goodssold. Alcoa calculates that the cost reduc-tion plan that it initiated in 1998 hadachieved US$832 million in annualised sav-ings by the end of the March quarter, andthe company expects to achieve a furtherUS$200 million within two years of com-

pleting its all-share purchase of ReynoldsMetals Co. The latter deal (MJ, August 20,1999, p.137), now worth about US$4.9 bil-lion in Alcoa shares, remains subject toapproval by the European Commission,which is due to make its ruling by May 10.Alcoa’s chief executive, Alain Belda, is con-fident that a positive decision will be forth-coming.

Meanwhile, the directors of EasternAluminium Ltd of Australia last week rec-ommended that shareholders accept theA$1.60/share cash offer made by Alcoa lastmonth (MJ, March 17, p.217). Eastern hasa 10% interest in the 345,000 t/y capacityPortland aluminium smelter. The offer val-ues Eastern at A$176 million, and Alcoa hasset a minimum acceptance level of 50.1% asa condition of its offer.

Alcoa’s cash and cash equivalents stoodat US$208 million at March 31, 2000, com-pared with US$237 million at the end ofDecember 1999. Short-term borrowingsrose over the same three-month period fromUS$343 million to US$684 million, butlong-term borrowings declined fromUS$2.66 billion to US$2.41 billion. ■■

Crew funding plansThe Vancouver-based mini-mining house,Crew Development Corp., has arranged aprivate placing of 7.4 million shares, atC$1.14/share with institutional and privateinvestors in Norway. The group plans toraise additional funds to a total of aboutC$15 million from private placings thismonth and next to fund plans through toJune 2001 for two of its directly-owned pro-jects. Both projects were gained throughCrew’s recent merger with Mindex ASA ofNorway (MJ, January 7, p.16). The mostadvanced is the 50%-owned Nalunaq goldproject in Greenland, and the funds shouldenable sufficient development work to becompleted to make a production decision bythe end of this year, with a view to startingconstruction in 2001 (this issue, p.287).

The other project is the 100%-ownedMindoro nickel laterite project in thePhilippines. Crew aims to take the projectto the bankable feasibility study stage andto complete all environmental and otherpermitting work in the next 12-15 months,but accepts that development would requirethe participation of one or more major part-ners. The feasibility work is being conduct-ed by Kvaerner Metals, which has workedon several other nickel laterite projects.Project planning envisages using Sherritt-

Alcoa reapsprice rises

Mining Journal, London, April 14, 2000 293

LONDON PRICES

Metals Apr 13Aluminium (US producer) 63.00-66.00 c/lb d/dAntimony $1,100-$1,160/t cifArsenic (Rotterdam 99%) $0.30-$0.40/lbBismuth Bismuth $3.50-$3.70/lb cifCadmium (99.99%) $0.15-$0.20/lb cif

.. (99.95%) $0.13-$0.18/lb cifChrome (UK 99%) $9.00-$10.00/lbCobalt (99.8%) $15.50-$16.50/lb net

.. (99.3%) $14.70-$15.50/lb netGermanium $620-$680/kgGold £176.98($281.40)/oz Indium $130.00-$150/kgIridium (J Matthey price) $415/ozMagnesium (Norsk Hydro Euro. prod.) �2.45/kg*

.. (US Free mkt, 99.8%) $2,270-$2,350/t*Manganese

metal (99.7%) $900-$990/tMercury (99.99%) $130-$140/flaskNickel $4.44-$4.45/lbOsmium $400-$450/ozPalladium (J Matthey price) $570.00/oz

.. (Free market) $553.00-$563.00/ozPlatinum (J Matthey price) $498.00/oz

.. (Free market) $498.00-$503.00/ozRhodium (J Matthey price) $1,750.00/ozRuthenium (J Matthey price) $85/oz cifSelenium $2.90-$3.340/lb cifSilver $5.15ozTellurium (UK lump & powder

99.95%) $4.00-$6.00/lb netTin (Kuala Lumpur) RM20.67/kg

Ore & Oxides Apr 13Antimony (60%) $8.00-$8.50/t unit, cif nom*Beryl (10% BeO) $75-$80/s ton unit BeO cif*Chrome (Transvaal, Friable 40%) $48-$60/t, fob*

.. (Turkish, concs 48%) $65-$70/t fob*Columbite (min. 65% comb. oxides) $3.10-$3.80/lb cif*Ilmenite (54% TiO2) A$100-A$115/t fobLithium ores (Petalite 4.2% Li2O) $250/t fob*

(Spodumene>7.25% Li2O) $385-$395/t fob*Manganese ore (48-50% Mn,

max. 0.1% P) $1.81-$1.90/t unit fob*Molybdenum

oxide (conc 55-57%) $2.50-$2.60/lbRutile (Aust. 95-97%

TiO2) A$750-A$850/t fob (bulk)Tantalum oxide (60% cif N. Euro port) $26-$32/lbUranium (Nuexco unrestricted/restricted

U3O8) $7.25/$9.20/lbVanadium (98% V2O5) $2.20-$2.50/lb cifWolframite (65%) $40-$48/t unitZircon sand (std 66-67% ZrO2) A$560-A$660/t fob (bulk)

* Source: Metal Bulletin

LME PRICES & STOCKS

Prices (a.m.) Apr 13 Apr 6Tonne basis Buyers Sellers Buyers SellersCOPPER Grade ACash....................... $1,662 $1,662.5 $1,680 $1,681Three months ......... $1,693 $1,694 $1,700 $1,701TINCash....................... $5,415 $5,420 $5,355 $5,360Three months ......... $5,450 $5,455 $5,390 $5,400LEADCash....................... $420 $421 $425 $425.5Three months ......... $439.5 $440 $445 $446ZINC Special high gradeCash....................... $1,131 $1,132 $1,099 $1,100Three months ......... $1,136 $1,136.5 $1,104 $1,105ALUMINIUM Higher gradeCash....................... $1,464 $1,465 $1,480 $1,480.5Three months ......... $1,496 $1,497 $1,508 $1,510Alloy Cash....................... $1,187 $1,188 $1,165 $1,168Three months ......... $1,229 $1,230 $1,210 $1,215NICKELCash....................... $9,780 $9,790 $9,850 $9,860Three months ......... $9,605 $9,610 $9,690 $9,700 SILVERCash....................... $5.03 $5.07 $5.10 $5.47Three months ......... $5.08 $5.12 $5.11 $5.15

LME warehouse stocks on April 12Stocks Stocks

(t) (Apr. 5)

COPPER Grade A cathodes 722,250 738,350

TIN 10,285 10,330

LEAD 201,900 198,900

ZINC SHG 259,200 262,850

ALUMINIUM HG 714,950 742,025Alloy 94,040 93,260

NICKEL 29,238 30,432SILVER 40,000 oz 40,000 oz

type high-pressure acid leaching, generatingammonium sulphate as a by-product, forwhich Crew expects a ready market in thePhilippines as fertiliser. The group recentlysecured a sulphur source for the project’sacid supply (MJ, March 31, p.250).

Crew’s other main directly-owned pro-jects are being funded by partners. NorandaInc. of Canada is funding the 100%-ownedRøros zinc project in Norway to the bank-able feasibility study stage to earn 70%.Exploration of Crew’s 51%-owned Hwini-Butre gold project in Ghana is being fundedby St Jude Resources.

According to John Darch, Crew’s chiefexecutive, once these funds have beenraised, the company does not expect to needto return to the market for the foreseeablefuture. General corporate costs, such ashead office salaries and expenses etc., can bemet from the roughly C$2 million that Crewreceives annually in dividends from its 41%interest in Metorex Ltd of South Africa.

Metorex made an attributable profit ofR30.7 million in the six months toDecember 31, 1999, and distributed R8.4million in dividends. Net on-mine revenueof R242.4 million came from the diversifiedportfolio of mineral properties held byMetorex in southern Africa. Commoditiesproduced include copper, zinc, coal,fluorspar and gold. Last week, Metorexannounced the development of theChibuluma South project by its 85%-ownedsubsidiary, Chibuluma Mines plc of Zambia(MJ, April 7, p.270). Most of the otherproperties are now held 100% by Metorex,following completion of an extensiverestructuring announced last year (MJ,September 17, 1999, p.229).

Crew plans to increase its holding inMetorex to 51%, thus gaining outright con-trol and also allowing Crew to consolidatethe financial accounts of Metorex into itsown results. Mr Darch told Mining Journalthat this increase in ownership will proba-bly be effected by a rights issue in Metorex,in which Crew will not only follow its rightsbut will subscribe for rights not taken up byothers. This would cost Crew around C$15million, which Mr Darch hopes to be able tofund from Crew’s treasury. This currentlystands at some C$3 million in cash plus 3.5million shares in Asia Pacific Resources Ltd(APR) (which has three directors incommon with Crew).

Mr Darch expects that by the time Crewneeds to liquidate its APR shares, whichrepresent about 5% of the total issued,progress at the latter’s Somboon potashproject in Thailand (MJ, December 24/31,1999, p.503) will have been such that theshares will be worth the C$15 million need-ed (APR stood at C$1.50/share last week).Should that not prove to be the case, orshould the Metorex deal come sooner thanexpected, Crew would raise the moneythrough a private placing of additionalshares in Crew to a strategic partner. ■■

Australian explorationfunding warning

Shareholders in Perth-based explorationjunior Fimiston Mining NL have voted infavour of changing the company’s name andlegal status to Fimiston Resources andTechnology Ltd. The change follows anagreement secured at the end of last monthunder which Fimiston will acquire a 33%interest in Point Technology Pty Ltd, aSydney-based internet technology compa-ny, for A$3.6 million. Fimiston is raisingA$2.25 million (gross) via a share placing of5 million shares to help fund the PointTechnology deal. However, Fimiston hasnot abandoned mining completely: thecompany recently gained full ownership ofthe Julia Creek tenements near Mount Isa(MJ, February 4, p.90), where a large vana-dium resource has been identified.

Fimiston’s move into the high-technologysector, and the apparent ease with which itraised money for the deal, is just the latestin a long line of such developments. JohnMacdonald, a mining analyst with CIBCWorld Markets Australia Ltd, based inPerth, calculates that from December 9 lastyear to March 29, 65 Australian-listed min-eral exploration companies announced forthe first time a desire to invest outside theresources sector. Mr Macdonald notes thatthe average rise in the share prices of thesecompanies during his review period was192% (weighted by market capitalisation),which he contrasts with the 17% average

fall in Australian gold mining shares and the18% decline in other mining stocks over thesame time frame.

The 65 actual or would-bedefectors/diversifiers followed 67 such com-panies that announced a similar strategicmove out of minerals in the period prior toDecember 9, 1999. The weighted averageshare price rise of this group during the sub-sequent period from December 9 to March29 was 155%. Mr Macdonald notes thatthese changes have reduced the number ofAustralian-listed companies that can beclassified as genuine resources explorationcompanies to just 78. In a research noteentitled ‘The Rush for the Exits’, he arguesthat these remaining companies are underconsiderable pressure to join their erstwhilefellows. Mr Macdonald believes that, giventhe negative attitude of investors towardsmining, the 35% average rise in the shares ofthese 78 companies during his review periodcan only be explained by an anticipation onthe part of the market that they will bow tothat pressure.

Mr Macdonald warns that the Australianmining sector could “die by the roots”, if itsuffers one or two more quarters along thistrend. He states that there is no equity-market capital available for smallAustralian-listed exploration companies,because the funds are all going to the tech-nology and media sectors, and he believesthat the “pain in mining” will not ease untilthe “returns from touting technology slowor reverse”.

This week, the Australian StockExchange launched its exploration index

MINING FINANCE

294 Mining Journal, London, April 14, 2000

Alcan Aluminium (C$) ..... 3 8.5 00.00 476Alcoa ($) .......................... 00.00 0.0 00.00 11Anglo Amer. Plat. (R)....... 00.00 0.7 00.00 00Anglo American (£)..........AngloGold (R) ................. 0.0 00.00 00Anglovaal Mining (R) ...... 00.00 0.0 00.00 00Antofagasta Holdings (£)Arch Coal ($) ................... 00.00 0.0 00.00 00Ashanti Goldfields ($) ......Ashton Mining (A$) ......... 00.00 0.0 00.00 00Asturiana de Zinc (�)....... 00.00 0.0 00.00 00Barrick Gold (C$) ............ 00.00 0.0 00.00 00BHP (A$) ........................ 00.00 0.0 00.00 00Billiton (£) ......................Boliden (C$) .................... 00.00 0.0 00.00 00Cameco (C$).................... 00.00 0.0600 00Cleveland-Cliffs ($) .......... 00.00 0.0 00.00 00Cominco (C$) .................. 00.00 0.0 00.00 00CVRD (BR) .................... 00.00 0.0 00.00 00De Beers (Linked Uts) (£) 00.00 0.0 00.0010,244Emp. Min. Mantos Blancos (ChP) 00Eramet (Eur)...................Falconbridge (C$)............Freeport-Mc. C&G ($) ..... 00.00 0.0 00.00 00Gold Fields Ltd (R).......... 00.00 0.0 00.00 00Grupo IM Mexico (MP)... 00.00 0.0 00.00 00Hindalco (Rs) .................. 00.00 0.0 00.00 00HZL (Rs)......................... 00.00 0.0 00.00 00Iluka (A$)........................ 00.00 0.0 00.00 00IMC Global ($) ................ 00.00 0.0 00.00 00Impala Plat. (R) .............. 00.00 0.0 00.00 00Inco (C$) ......................... 00.00 0.0 00.00 00Industrias Peñoles (MP) .. 00.00 0.0 00.00 00Iscor (R) .......................... 00.00 0.0 00.00 00KGHM (Zt) ..................... 00.00 0.0 00 00Lonmin plc (£) ................. 00.00 0.0 00.001 11,MIM Holdings (A$)......... 0.0 00.00 00Minsur(PS)...................... 00.00 0.0 00.00 00Mitsui Min. & Smlt. (¥)... 00.00 0.0 00.00 00Newmont Mining ($)........ 00.00 0.0 00.00Noranda Mining(C$)........

Norilsk Nickel (Rb).......... 74.66 13 00.00 00Normandy Mining (A$) ... 00.00 0.0 00.00 00Norsk Hydro (NK) .......... 00.00 0.0 00.00 00North Ltd (A$) ................ 00.00 0..0 00.00 00Outokumpu (�) ..............Pasminco (A$) ................. 0011 0.0 00.00 00Pechiney ‘A’ (�)................ 00.00 0.0 00.00 00Phelps Dodge ($).............. 00.00 0.0 00.00 00Placer Dome (C$) ............ 00.00 0.0 00.00 00Potash Corp. of Sask. (C$) 00.00 0.0 00.00 00PT Tambang Timah (Rp) 00.00 0.0 00.00 00Reynolds Metals ($) ......... 00.00 0.0 00.00 00Rio Algom (C$)................ 00.00 0.0 00.00 00Rio Tinto plc (£) ............. 00.00 0.0 00.00 00RJB Mining (£) ............... 00.00 0.0 00.00 00Sumitomo Met. Min. (¥) . 00.00 0.0 00.00 00Teck ‘B’ (C$) ................... 00.00 0.0 00.00 00WMC (A$) ...................... 00.00 0.0 00.00 00Xstrata (SF) .................... 00.00 0.0 00.00 00

Share prices and exchange rates are intra-day Wednesday.100 in the high/low column indicates that the share is tradingat a high, 0 that it is at a low, based on local prices over thepast 52 weeks.

Currencies April 12Value of £ $(US)$ (US) ................................................... 0.0558 —$ (Australian)........................................ 0.2.512 0.05$ (Canadian) ......................................... 0.00 0.00Ringgit (Malaysian) Fixed official rate ..Franc (Swiss) ........................................ 0.00 0.00Krona (Swedish) ................................... 0.00 0.00Yen ....................................................... 0.00 0.00Rand (SA) ............................................ 0.00 0.00� (Euro) ............................................... 0.00 0.00Markka (Finnish) ................................. 0.00 0.00Franc (French)...................................... 0.00 0.00Deutschmark ........................................ 0.00 0.00Source: Bloomberg

SHARE PRICES AND EXCHANGE RATES

Company Apr 12 Change Local US$ mill.Local 5-day % % hi-lo Mkt cap.

Company Apr 12 Change Local US$ mill.Local 5-day % % hi-lo Mkt cap.

50.0070.38

178.0025.00

297.0047.00

4.044.812.250.71

12.6324.3017.98

2.862.37

17.5023.0620.6039.9614.8812.6058.5019.5010.6923.5044.20

790.009.253.61

13.69219.00

25.3521.2516.7529.40

6.880.926.50

630.0023.3814.50

0.5–0.4–2.2

–12.3–3.6–0.62.8

–30.60.0

–4.113.2–1.2–3.7–1.0–1.715.5–3.2–3.32.50.70.03.7

–8.7–10.9

–4.11.67.58.8

–3.7–7.6–4.4–3.1–7.2–0.90.35.0

–11.56.6

–0.8–0.5–3.7

396173

0356471

06

43671152532814

5176329998834

23452511046

75933

621648223487551

7

7,47626,171

5,86416,156

4,845770

1,216184253142487

6,57018,991

9,694173682246

1,2049,4869,397

3941,3482,3591,6671,6242,9661,348

90480

1,5672,2003,148

910659

1,4251,744

942156

3,2173,9222,439

928

432748

034

72

364

5426201941204692

2,010912

9,9351,3171,488

6173,9013,6362,5642,703

2064,278

67116,923

762,019

7744,6331,205

1.582.662.326.022.61

13.75167.39

10.391.66

1.001.681.463.801.658.68

105.696.561.05

�1=Mk5.94573�1=FF6.55957�1=DM1.95583

2.9–4.30.91.40.0

–7.9–7.0–0.9–4.62.13.31.51.3

–8.817.9

6.9–2.8–0.34.2

307.770.883.242.90

12.500.92

50.0046.1911.5073.50

3125.0067.1916.2010.03

0.33373.00

10.306.76

1710.00

announced last year (MJ, December 17,1999, p.490). It contains about 200 explo-ration companies (with a total market capi-talisation of A$4.7 billion), some of which,according to Mr Macdonald’s research,must also be involved in other sectors. ■■

Market newsThe London-based Rio Tinto group has for-mally launched its offer to minority share-holders in 72.43%-owned Comalco Ltd, anAustralian-listed integrated aluminiumproducer, and has confirmed that it doesinclude a share alternative. Rio Tintoannounced the A$9.50/share cash offer con-currently with the release of its financialresults for 1999, and said that it was consid-ering a share alternative (MJ, February 25,p.141). The offer will open on April 20 andclose on May 22, unless extended, and isconditional on Rio Tinto receiving suffi-cient acceptances to proceed to compulsoryacquisition of any outstanding shares.Minority shareholders will be offeredA$9.50/share in cash; one share inAustralian-listed Rio Tinto Ltd for everythree held in Comalco; or one share inLondon-listed Rio Tinto plc for every threeheld (the structure of Rio Tinto is designedsuch that the London and Australian sharesare essentially equivalent, although therecan be a price discrepancy between the two,after adjusting for the exchange rate, owingmainly to differences in trading volumesand liquidity in the shares in their respec-tive markets). Full acceptance of the cashalternative, which represents a premium of17.3% to the closing price of Comalco priorto the initial announcement, would result ina cash outlay of nearly A$1.5 billion. RioTinto intends to use its share repurchaseprogramme to buy on the market an equiva-lent number of shares to those taken underthe share option, in order that its total num-ber of shares issued is not increased.■ Gold Mines of Sardinia Ltd (GMS), listedin Australia and on London’s AlternativeInvestment Market, has made a conditionalagreement to buy 6.5 million ordinaryshares in Navan Resources plc, representing10.53% of the total issued, from HomestakeMining Co. of the US. Homestake willreceive newly-issued shares in GMS, theexact number of which will be calculatedaccording to the average daily closing pricesof GMS and Navan from March 27 to thedate six days prior to the posting of formaldocumentation by GMS to its shareholderswith respect to the deal (expected towardsthe end of this month). Based on the pricesthis Tuesday, the day prior to announce-ment, Homestake would acquire an interestof about 7% in GMS. Provided Homestakeretains at least 50% of the GMS sharesacquired, the US-based company will havethe right to nominate up to 20% of thelicence area in Sardinia held by GMS,

excluding its Furtei and Osilo projects (MJ,November 12, 1999, p.393), as a joint-ven-ture area. Homestake would hold 75% ofsuch a joint venture, and be responsible for100% of costs, and GMS would retain 25%.Homestake would also have right of firstrefusal to acquire any part of the GMSlicence area or any interest in the Sardiniansubsidiary of GMS. Homestake’s share-holding in Navan is left over from a broaderdevelopment deal over the Chelopech goldproject in Bulgaria made some years ago(MJ, October 23, 1998, p.331). GMS notesthat Chelopech has “similar characteris-tics” to its operations in Sardinia.■ Petra Diamonds Ltd, listed on London’sAlternative Investment Market, hopes tohave the suspension of trading in its shareslifted in the next few days. The shares weresuspended on March 13 (at £0.44/share)pending an announcement regarding areverse takeover by Oryx Natural Resources,intended essentially to give the latter’sassets a stock market listing. Oryx, regis-tered in the Cayman Islands, is based in theSultanate of Oman and is backed by MiddleEastern investors. The company has dia-mond mining assets in the Mbuji-Mayiregion of Kasai Province in the DemocraticRepublic of Congo. These propertiesinclude six alluvial mining operations, theTshibua kimberlite pipe and explorationareas. Petra will issue in the region of 60 mil-lion new shares to acquire Oryx, increasingits total shares issued to around 100 million.Following completion of the deal, Petra’sname will be changed to Oryx DiamondsLtd. The new shareholders are expected tosupport the issue of additional shares toraise development capital.■ Sydney-based Delta Gold Mines Ltd hasreceived acceptances representing 50.2% ofthe issued shares in Australian-listed RossMining NL, thus passing the 50.1% thresh-old which was a condition of the offer (MJ,March 3, p.187). Delta is now confident ofachieving full control. The offer expires nextMonday (April 17).■ The US$150 million rights offeringannounced earlier this year by Boliden Ltdof Toronto (MJ, February 25, p.159) hasclosed, with a 97% subscription level.Boliden has issued 107.1 million new com-mon shares, raising net proceeds ofUS$142.6 million. The money is assigned tothe repayment of a bridging-finance facilityand to the completion of the expansion ofBoliden’s Rönnskär copper smelting andrefining complex in Sweden by 71% to240,000 t/y of cathode.■ Toronto-based Sherritt International Corp.has repurchased C$25 million of the princi-pal amount of its outstanding 6% convert-ible unsecured subordinated debentures(principal amount C$1,000/debenture), at aprice of C$710/debenture, following a‘Dutch auction’ process which closed lastweek. Sherritt’s offer to repurchase deben-tures at a price in the range C$710-

750/debenture prompted tenders at variousprices, totalling C$276.8 million of princi-pal amount. Sherritt has fulfilled these ten-ders on a pro rata basis. The buy-back hasreduced the principal amount of Sherritt’soutstanding debentures to C$650 million.■ The revised takeover offer made by SouthAfrican-based Harmony Gold Mining Co. Ltdfor Randfontein Estates Ltd (MJ, March 31,p.259) reached its extended closing date lastweek, leaving Harmony with acceptancestotalling 93.6% of the shares in Randfontein.Harmony has further extended the offer toApril 26, and intends to proceed to compul-sory acquisition of any outstanding sharesnot tendered by that date. Harmony tookover management control of Randfontein inJanuary (MJ, January 21, p.45).■ Johannesburg-based Northam PlatinumLtd has postponed a planned vote by itsshareholders regarding the proposed dealwith Mvelaphanda Platinum (MJ, February25, p.157). Northam and Mvelaphanda hadenvisaged that a ‘heads of agreement’ onthe broad terms would have been reached bylast week, but “negotiations have advancedmore slowly than anticipated”.■ The European Bank for Reconstructionand Development (EBRD) and StandardBank London have established a joint pro-gramme to finance exports of Russian allu-vial gold production. The programme cameout of an EBRD-sponsored technical studyof the industry, with funding assistancefrom the Canadian Government. Under thethree-year programme, funds provided byEBRD and Standard have been disbursedinitially to selected mining clients of BankZenit, the first Russian bank to join the pro-gramme. Each company receives a 360-day,pre-production gold purchase facility tofinance the production of up to 12 t of gold.The facility is a form of gold loan, fundsfrom which may be used to purchase equip-ment, fuel and other supplies, with the loanto be repaid from production. All goldexported under the programme will bebought by Standard. Russia’s alluvial goldmining industry, which produces the bulk ofthe country’s roughly 100 t/y output, hastraditionally been financed through season-al gold loans by domestic banks, althoughnot without problems (MJ, July 18, 1997,p.43). The EBRD-Standard programme isthe first such internationally-led initiative,which the banks hope will improve bothtrust and information, as a first steptowards establishing an international capi-tal market for conventional loans to theRussian gold mining industry.■ Toronto-listed McWatters Mining Inc. hassecured a letter of commitment fromStandard Bank London and National Bankof Canada under which the banks willunderwrite the provision of a US$10 mil-lion, four-year corporate loan facility.McWatters anticipates that the funds willbe available by the end of June this year,subject to due diligence and definitive legal

MINING FINANCE

Mining Journal, London, April 14, 2000 295

documentation, and plans to use the bulk ofthe money to repay a US$7.5 million loanfrom Credit Agricole Indosuez New York.The balance will be used for general corpo-rate purposes.■ Xstrata AG of Switzerland will ask share-holders to vote on a five-for-one share splitat their annual general meeting on May 3.The company’s ordinary share capital com-prises bearer shares with a par value of SF50each, which will be divided into shares ofSF10 each. The market value of shares inXstrata is currently over SF1,600, equiva-lent to more than US$1,000/share, makingthem rather unwieldy particularly for smallinvestors. Separately, Xstrata this weekcompleted the sale of its 23% interest in theMt Holly aluminium smelter in SouthCarolina for US$95 million, with effect fromMarch 31, 2000, as part of a strategy to con-

centrate on its core businesses (MJ, March31, p.255).■ Capital International Group has sub-scribed for a further 2.55 million shares inJohannesburg-listed Southern Mining Corp.(SMC), which is developing the CorridorSands heavy mineral project inMozambique (MJ, November 26, 1999,p.422). In a separate deal, SMC BV, a share-holder in SMC with just under 10%, hasconverted loans to SMC into 917,330 newshares (representing around 1% of thetotal). The proceeds to SMC from these twotransactions total R32 million (althoughthe loan conversion would represent non-cash proceeds). Following the two deals,SMC has 85.04 million shares in issue, nodebt and R44 million in cash, more than suf-ficient to complete the full feasibility studyscheduled for this August.■ Bermuda-registered Aquarius PlatinumLtd will invite shareholders to vote at theirgeneral meeting on May 1 to approve the

placing of up to 10 million additionalshares, among more routine matters. Theadditional shares would be placed at not lessthan 80% of the average market price ofAquarius shares for the five days precedingany placing, using whichever is the higher ofthe averages from the Australian StockExchange and the London AlternativeInvestment Market (AIM). Aquarius wasbeing traded at around £1.30/share on AIMthis week. The proceeds of any placingwould be used only to advance Aquarius’platinum interests in South Africa, and anyplacing would be made only when funds areneeded and “market conditions arefavourable”. The Marikana project is thesubject of a feasibility study released thisweek (this issue, p.287). Aquarius also hasan agreement with Impala PlatinumHoldings Ltd to investigate certain of thelatter’s projects, including Everest Northand South (MJ, February 18, p.129).Another possible use for cash would be toexercise options held by Aquarius to acquire8.0 million shares in Kroondal PlatinumMines Ltd, exercisable at R9.00/share untilAugust 31, 1999. Kroondal, spun off byAquarius’ predecessor company, is miningplatinum group metals at the Kroondalmine in South Africa and its concentratesare treated under an agreement withImpala (MJ, December 3, 1999, p.451). ■■

MINING FINANCE

Abchurch Chambers, 24 St Peters Road,Bournemouth, BH1 2LN, U.K.

Tel: +44 (0)1202 298322. Fax: +44 (0)1202 298383Email: hpcservices@hunterpersonnel.com

MECHANICAL ENGINEERExcellent opportunity for a Mechanical Engineer with

a minimum of 5 years post-graduate experience.Working for a large UK company, the work will be

based overseas on a large open-pit operation. The idealcandidate will have experience working on an

ndustrial minerals site and be familiar with the typeof equipment used.

Single status position – intially 12 months contract.

VISIT OUR WEB SITE: www.hunterpersonnel.com FOR CURRENTVACANCIES AND THE FULL RANGE OF SERVICES WE OFFER

Please contact or send your up-to-date CVs to Sandie Fforde or Alan Bozeat

Hunter Personnel Contracts Ltd

We have an immediate need to fill the following posts, whichhave urgently arisen:

GENERAL MANAGER (Ref 4644)Africa (Large scale underground mining complex)

MINING MANAGER (Ref 4645) Africa (Trackless mining)UNDERGROUND MANAGER (Ref 4646) Africa (Trackless mining)

ELECTRICAL SUPERINTENDENT (Ref 4648)Europe (Base metals mining)

SENIOR & JUNIOR METALLURGISTS (Ref 4602)Europe (Base metals)

Please send an up-to-date CV, quoting relevant Ref Nos to:Dennis Thomas, Thomas Mining Associates, P.O. Box 2010,Lancing, West Sussex BN15 8HZ, UK. Tel: +44 1903 753511.Fax: +44 1903 753510. E-mail: dennis@thomasmining.prestel.co.uk

Published by The Mining Journal Ltd, 60 Worship Street, London EC2A 2HD, England. Typeset and printed in Gt. Britain by Pensord Press Ltd, Gwent.Registered as a Newspaper with the Post Office.

SAINDAK METALS LIMITEDINVITATION FOR EXPRESSION OF INTEREST (EOI) FOR LEASING

OF COMPLETE COPPER GOLD PROJECT IN PAKISTAN

The Saindak Metals Limited (SML) invites Expression of Interest (EOI) from prospective investors for pre-qualification to participate in leasing of itsSaindak Copper-Gold mine, metallurgical plant and its allied facilities, free of all encumbrances. Located 678 KM west of Quetta the provincial capitalof Balochistan, the Project site is connected to national road and rail network and a commercial airport located at a distance of 320 KM from site. TheProject has its own airstrip authorised for landing of chartered airplanes. Saindak is 1000 ft ASI, sparsely populated, having arid climate and well securedagainst any outside interference.

Exploration of Saindak porphyry copper deposits was carried out during 1974-78 and three ore bodies i.e East, North and South were established totalling412 Mt reserves. The existing Project is based on 78 Mt mineable reserves of South Orebody averaging 0.43% Copper and 0.5 gm/t Gold with a mine lifeof 19 years. Initial feasibility was done by Seltrust Engineering Limited (SEL) of U.K. in 1978 and detailed Bankable Document by Mountain StatesMineral Enterprise (MSME), Arizona in 1980. ENFI of China designed the project, incorporating the data from Bankable Document of MSME.Metallurgical Construction Corporation of China (MCC) constructed the mine and metallurgical plant during 1991-95 under a turnkey contract. TheProject was handed over to SMLin January, 1996 after a successful trial operation which produced 1550 tonnes of blister copper having 99.1% copperand 90 gm/t gold. The Production capacities are - mine 4.25 Mt/year ore, 72,000 t/year concentrate and 20,000 t/year blister copper. The Project has itsown 5x10 MWpower plant constructed by Siemens, and a well designed residential area with all civic facilities, hospital and water treatment plant.

Requests for supply of information memorandum on the Project may be mailed/e-mailed with proof of having deposited Rs. 5,000 in SML’s bank accountNo. 8476-93 in the M.A, Jinnah Road Branch of Habib Bank Limited at Quetta.

Expression of Interest for pre-qualification to participate in the leasing process of Saindak Project, along with investor profile in terms of ownership, networth, business track record (audited accounts, staff strength, etc.) and demonstrated capabilities for operating similar operations should reach the officeof the undersigned latest by 1500 hours, 17th May, 2000.

Managing DirectorSaindak Metals Limited

Arbab Karam Khan RoadQuetta, Pakistan

Tel: 92 81 444110, 92 81 9211710Fax: 92 81 9211706

E-mail: smlho@qta.paknet.com.pkquetta@smll.qta.sdnpk.undp.org