Ivanhoe’s Kipushi zinc mine in the DRC officially reopens
The restart marked exactly a century since the mine first went into production.
Oil sands mining are not typically associated with Africa and the continent’s two mega-projects, one in the Congo Basin and another on the island of Madagascar, are running into trouble.
The $3bn deal between the Republic of Congo and Eni, Italy’s state-owned oil major, runs out this year amid criticism about its lack of transparency and environmental impact. In Madagascar, the partner of France’s Total, Madagascar Oil declared a force majeur after the Malagasy government apparently threatened to seize one of the London-listed company’s oil fields.
One of Eni’s 100 square km sample areas in the Congo basin suggest 500m – to 2.5bn barrels of recoverable oil. Eni’s $3bn deal with Congo-Brazzaville for the 1790 square km area also includes investment in the country’s food, health and power generation sectors. Details about the progress of the agreement which was initially signed in May 2008 are scant but the project was supposed to produce some 150m barrels.
In Madagascar Total, a heavy investor in Canada’s oils sands, teamed up with London-listed Madagascar Oil in 2008 to exploit the Bemolanga block. The company said the area could produce 180,000 bpd and could cost upwards of $8bn to bring into operation. Total owns 60% of the project and Madagascar Oil the rest and is in talks with the Malagasy government to extend its licence.
Madagascar Oil has run into some problems with the Malagasy government, established in a 2009 coup, after talk of a takeover of a separate heavy oil field called Tsimororo, where oil was first struck in 1909, began to surface. The company claimed force majeur in March and had its shares suspended on AIM in London. The company raised over $80m in its December 2010 IPO. Madagascar Oil said last month talks with the Malagasy government to settle the dispute continue.
Eni’s exploration area extends to within about 20km of the Conkouati-Douli National Park and 50-70% of it is covered by primary forests and regions of high biodiversity in the Congo Basin. Surveys have shown that local communities are largely uninformed about the oil sand developments and the destructive impacts they are likely to have.
French oil major Total and Madagascar Oil are hoping to exploit two large oils sand deposits in the impoverished western Melaky region. One of them overlaps the Tsingy de Bemaraha Strict Nature Reserve, a Unesco World Heritage site and an area of rich biodiversity, mangrove swamps and indigenous forest.
Petroleum Economist reports (sub required):
Recent uncertainty surrounding UK-listed Madagascar Oil’s heavy oil assets will hardly have bolstered confidence among potential investors.
Corporate Financing Week reports (sub required):
The investment climate in Madagascar’s nascent oil sector continues to suffer amid the country’s ongoing political crisis.
