Presented by: David Humphrey, Standard

Bank
Theme: The importance of Infrastructure for
Mining

Without supporting Infrastructure a mine is just a hole in

the ground..as West Africa shows
We have
identified two
key individual
export regions,
the GuineaLiberia-Sierra
Leone province
and the
CameroonGabon-ROC
province
Infrastructure is
essentially
limited,
requiring
development of
rail and port
facilities to
access
international
markets

CAMEROON

NIGERIA

City
Douala
Assets
Proposed Port
Kribi
Port
Mamelles
Railway
Proposed Sundance LES MARMELLES (Sinosteel)
Railway
Bata

CENTRAL
AFRICAN REPUBLIC

Yaounde

NGOVAYANG (Legend Mining)

NKOUT (Afferro Mining)
MBALAM (Sundance Resources)
BAMEGOD/ELOGO (Sundance Resources)

AVIMA (Core Mining)

MINKEBE (CMEC)

NABEBA (Sundance Resources)

MT LETIOUKBALA (Sundance Resources)

BADONDO

Libreville (Equatorial Resources)

MELA

Port Gentil

BOKA-BOKA (CMEC)

BELINGA (CMEC)

YOUKOU (Waratah Resources)

BATOUALA
(CMEC)

KANGO
(Core Mining)

GABON
MAYOKO-MOUSSONDJI
(Equatorial Resources)

MAYOKO (Exxaro Resources)

Dolise
Pointe-Noire

D.R. CONGO
CONGO

ZANAGA (Xstrata and Zanaga Iron Ore)

Brazzaville

Without supporting Infrastructure a mine is just a hole in

the ground..as West Africa shows
GUINEA
KALIA
(Bellzone)

Conakry

SIERRA
LEONE

City

Pepel

Assets
Proposed Port

TONKOLILI
(African
Minerals)

Freetown

LIBERIA

Port
Railway
Proposed
Railway

SIMANDOU BLOCKS
1&2,
SIMANDOU SOUTH
SIMANDOU
(Vale, BSG 3&4
(Rio
Tinto, Chalco,
Resources)
IFC)

MARAMPA
(London
Mining)

Monrovia
Buchanan

MARAMPA
(Cape Lambert)

IVORY COAST
MOUNT NIMBA
(ArcelorMittal - Liberia)
(BHP, Newmont, Areva Guniea)
(Tata Steel - Ivory Coast)
PUTU
(Severstal)

Greenville

WESTERN
CLUSTER
(Sesa Goa,
BONG
Elenilto) (Wuhan Steel, CAD
Fund)

Source: Broker research, company websites, Intierra

Mine/Heavy Haul Rail Project Dynamics

Crucial

to any project are:

Quality

and abundance of mineral resource

Market

price

Distance

from market (port/power station etc)

Topography
Quality
Given

and climate

of existing rail and port infrastructure

the right combination, heavy haul mining projects are profitable.

High

upfront rail and port infrastructure projects can be amortised over life
of mine

Infrastructure

upgrades to enable route to market are major drivers of GDP

South Africa Infrastructure Requirements - Overview

Commodity

Project(s)

Comments

Iron Ore

Kumba/Assmang expansion

Further Upgrades to Orex line is possible

Manganese

Kalagadi,
Samancor,UMK,Kudamane etc

Limited rail capacity, yet most valuable export

per tonne to South Africa in value terms.

Coal

13 major producers, numerous

minor miners

Recent upgrades on RBCT line have increased

capacity. Upgrades to help unlock Waterburg
region in near to mid term. Greater need to
get coal to ESKOM by rail

Magnetite

Enormous reserves/stock piles

in NE

Limited route to market to Maputo

Commentary
Standard Bank well connected with most mining houses and opportunities well known

Infrastructure requirements understood, and investment on its way

Transnet are running a number of processes to increase the efficiencies on all the major rail
lines in and around South Africa

Need for more water to the Waterberg to develop coal new pipelines

South Africa Recent Developments Base Load

Commentary
Government decision to allow private sector to build and supply up to 2.5GW of base load
coal through an IPP procurement process is significant

Each project capped at 600MW

First time coal mines, power stations and associated infrastructure can be developed by
the private sector

Opportunity is exciting, so is the complexity, as each project needs to have access to grid,
water, right quality coal over life of mine(s), rail (ideally) to export or distribute coal not
required for power etc

Standard Bank will be heavily involved and supporting the process

Summary

Infrastructure is critical to any mining project, the heavier the commodity, the more
important route to market infrastructure as becomes vital.

Supporting infrastructure is only enabled by clear government policy, legislation and

regulation within the mining and transport sectors

South Africa is moving ahead with very important initiatives in the infrastructure space that
will over time unlock major economic growth

Whether the model of infrastructure enablement (mostly SOE) is the right one is a separate
debate. The main point is the current system works, but may be not as fast as it should
but compare South Africas record with that of West Africa and the contrast is obvious.