Interview with Frank Timis: "the future is here in West Africa".
28/01/2011 - By comments collected in London by Christophe Beak. (english translation from french article in Jeune Afrique)
After having updated the, Sierra Leone, largest deposit of iron on the continent, the Australian-Romanian businessman wants to compete with the majors Vale, Rio Tinto and BHP Billiton. Its asset: the alliance with large Chinese groups.
Young Africa: After having invested in Sierra Leone, you began to prospect in Guinea, Cote d'Ivoire and Burkina Faso....Is West Africa your new hunting grounds?
FRANK TIMIS: It's here that plays the mining future! That lives today West Africa is comparable to what experienced Northwest of the Australia at the beginning of the 1970s: the beginnings of a mining boom. The region possesses deposits iron, copper, bauxite and manganese unlogged, an exceptional potential compared to currently available global reserves, while the demand for these raw exploding doped by accelerated Asian industrialization. Another advantage of the area: its proximity to Europe, to which it is cheaper to bring the ore from Western Oceania or South America Africa. With these elements in mind, how do you that I am interested in West Africa?
Are you not worried about the political instability which has delayed many projects?
Senegal, Burkina Faso and Sierra Leone have schemes open to investors mining, including from countries other than their former colonial powers, which they want to escape economically and stable. Course, the Ivorian situation is worrying in the short term, but over the long term, which is the natural horizon of mining projects, can be reasonably optimistic for the entire region. The situation in Guinea gives me reason to elsewhere: despite everything could say negative about this country today has an experienced Chairman who may fly its mine development.
Throughout your career you you're precisely illustrated in countries where few dare aller.....
This is true, if I feel a great opportunity, I do not hesitate to take risks, it has always been my strength, either Romania, Bulgaria, the Kazakhstan or Africa today. Actually, I finely analyze interest in a project. And most importantly, I am launches if I meet people with whom I can work calmly.
How did you arrive in Sierra Leone?
This is my friend Lord Anthony St John [known in the UK for its interventions in the House of lords on African issues, ed.] who advised me to visit the country, only eight months after the end of the civil war in 2003, and who put me in contact with authorities and then, President Ahmad Tejan Kabbah. I was the first contractor interested in sierra Leone mineral potential since the end of the disorders. Should have good hanging heart! I visited the centre and North of the country, not exploited until then. There, I was touched by local inter-locuteurs competent and willing to bring out their country, such Gibril Bangura, today the Director General to African Minerals. In early 2004, I returned to Freetown with a proposal for authorities: mapping mining in the sierra Leonean territory not yet licensed, all is 42 000 km2, in exchange for exploration rights on the same area. This represented for me $ 60 million of investment on my own purse [approximately EUR 48 million at the time]. The President and the Government agreed, at the end of 2004. Investors intending not at the gate.
This poker kick proved paying, since you're pinned largest deposit of iron to beyala.
By exploring the Sierra Leonean territory, I had more in mind to discover diamonds. We in fact found, but finally shortly, as well as uranium Northeast, copper and gold North-West and, finally, iron in the Center. In November 2007, making surveys to confirm what we had mapped, we fell on the exceptional Tonkolili deposit. Our strength was not disperse us: as soon as our geologists warned me of its extraordinary potential, I've concentrated all our efforts and investments on this area.
Where are you mounting financial Tonkolili project?
We already have [approximately EUR 900 million] $ 1.2 billion of capital for all African Minerals projects with a third party survey on the second London market [Alternative Investment Market], a third party provided by banks and one-third of the China Railway Materials. And we are currently in full operation due diligence [pre audit] with another Chinese partner, Shandong Iron and Steel, for an equity participation by 25% from Tonkolili, shares for $ 1.5 billion.
When will you be able to produce the Tonkolili iron?
At the end of the year 2011, we can export the Sierra Leonean railway. In a first phase, we will produce 12 million tonnes. Within five years, we seek an annual output of 35 million tonnes, which would make Sierra Leone the first African producer of iron ore and the third at the global level.
Rio Tinto and Vale, Mount Simandou Guinean deposits are very prometteurs.....
Yes, but their reserves are small: approximately 6 billion tonnes of iron, 12.8 billion for Tonkolili. And most importantly, our project is clearly more attractive logistically: we build only 200 km of tracks, including 80 km to rehabilitate, which will cost US $ 1 billion. It is with the project of the Trans Guinean of 1000 km, that will cost at least $ 12 billion! Finally, our Tagrin Point ore port be in deep water far more advantageous than envisaged in Liberia and Guinea ports. I am also confident that term Governments of both countries eventually agree to move their ores on our infrastructures instead of throwing of Pharaonic works and couteux.
Is it to deal with these costs as Rio Tinto announced in March 2010, a partnership with Chinalco, one of the leaders of the Chinese steel industry?
It is my view that an agreement of facade for helping Rio Tinto then sensitive support from Beijing to improve relations with the Guinean authorities at the time. In the long term, we'll see if this coupling take place. In my opinion, Rio Tinto will remain reluctant to give some or all of the commands of a mining project at one of its large Chinese customers...
Yourself in African Minerals are associated with large groups of chinois.
Yes, but me I helps break the oligopoly implemented by Brazilian Vale, who to them three control 80% of the railway market and Australian Rio Tinto and BHP Billiton. Unlike these three majors, I offer Chinese groups real access to a mining industrial tool. With me, they are just clients, but policy makers and investors.
The future of the mining sector moves by China?
This is evident , I know well that country, i know the ability of Chinese enterprises to make "tech-low-cost". In the field of electricity, they are already able to build a 400 MW coal plant every week. There is no reason that they learn as fast in the mining sector. When they have managed to meet their huge domestic demand, in twenty years, with economic competitiveness, they will only make a mouthful of steel undertakings such as ArcelorMittal! Provided to associate with them from now.
Can someone read it in french or esp. interpet Frank's remarks about Tagrin Port becomming the BIG port. What's a couteux !! What does this mean for CFE's development of new IO area projects to north and south of Marampa ? Is Frank the buyer of our Marampa No1 and CFE goes on to explore,prove up and on sell No's 2 - 17 over the next 6mths - 2 years ?? Do we get to keep 25% ?? Is this the new model of a modern mining company ? :))
CFE Price at posting:
61.0¢ Sentiment: LT Buy Disclosure: Held
(20min delay)