COMPANY PROFILE
2014
Jindal Africa
Big plans for Africa
company profile
Big plans for Africa Editorial: Christian Jordan Production: Chris Bolderstone Jindal Africa is making big moves on the continent. The company is an expert coal miner with a lot of experience and a firm backing from its parent company, Indian conglomerate Jindal Steel and Power. IndustrySA takes a look at the company’s journey into Africa and its plans for growth across the region’s growing economies.
In 2014, the global consumption of energy is under the spotlight more than ever. The emphasis placed on green initiatives is increasing all the time and the focus on conserving the world’s natural resources is always welcomed as the problem continues to attract a variety of different ideas. But even with all of the hubbub surrounding alternative energy, one fact remains – coal is still the dominant energy source in South Africa and its production is vital for the economy and important for the growth of the continent. South Africa produces over 260 million tonnes of coal annually and around 75% of that is consumed domestically. This meets over 75% of the country’s entire demand for energy. On the continent, over 90% of the coal used is
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produced in South Africa and this makes the country’s coal miners vitally important. One of the country’s leading coal miners is Jindal Africa, a subsidiary of Indian multinational conglomerate Jindal Steel and Power Limited (JSPL), which in turn is part of the US$15 billion, diversified O.P. Jindal Group. This industrial conglomerate is a leading player globally in the steel, power, mining, coal to liquid, oil and gas, and infrastructure sectors. In its marketing material, Jindal Africa states that it ‘recognises that Africa is endowed with great mineral wealth and hardworking and committed people and has the intent to pass on its inherent knowledge and experience to the continent by enriching lives, creating job opportunities
Jindal Africa
and adding value’. The company’s operations in Africa are spread across a number of different nations, namely South Africa, Mozambique, Zambia, Tanzania and Madagascar and the focus is on mining coal, iron ore, copper and limestone. The coal comes from South Africa and Mozambique, iron ore comes from South Africa, copper comes from Tanzania and Zambia and limestone comes from Tanzania and Madagascar. As we move into 2014, Jindal Africa has plans to expand its African footprint as the company’s profile explains: “Jindal Africa is working vigorously to entrench and expand its foothold in Africa to the benefit of its holding group and its local stakeholders. To this end, the company is currently
involved in numerous exploration and mining operations across five continents while also looking out for and planning projects in the steel, power and related industries.” The company oversees its African operations from its headquarters in Johannesburg, opened in November 2008. It is from here that it manages its main operation at the Kiepersol Colliery located just outside the town of Piet Retief in Mpumalanga.
KIEPERSOL COLLIERY At the Kiepersol coal mine, Jindal Mining SA (a subsidiary of Jindal Africa) is involved in the mining of metallurgical grade anthracite coal. This type of coal has the highest carbon content, the fewest impurities, and the highest
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company profile
©Jindal Africa calorific content of all types of coal. This mine is important for the company as it has sizeable deposits, 20 million tonnes of coal reserves to be precise. Its useful life is expected to run for another 15 years at least and it produces 1.5 million tonnes every year. The mine has a high-tech wash plant capable of washing 120,000 tonnes of coal each month. This process helps to produce high grade anthracite coal as the primary product along with low grade coal middlings. The quality of the coal produced from this mine (low sulphur and phosphorus contents) has allowed the company to carve out a specialist niche for itself in the South African market, supplying to the country’s leading Ferro Alloys manufactures. The high class coal has also become attractive in foreign markets and customers in India, the Middle East, Europe and China have all accepted coal from Kiepersol. Internally, the company has become a logistics leader in the coal mining sector and has the necessary infrastructure in place such as a private railway siding from where anthracite coal is despatched directly to customers and to the port. When it comes to export, Jindal shows the class of its logistical operations. It has an efficient logistics network for despatch, transportation, storage and loading of coal for exports. Presently the company has facility of loading up to Panamax size vessels from its Richards Bay Dry bulk terminal. Exports are something that the company is keen to grow, saying: “Jindal Mining is keen on developing new customers of anthracite and thermal coal in the overseas markets and to be able to meet their requirement on a long term basis. Jindal Mining has always believed in
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maintaining high quality and delivery standards in meeting customer expectations and is consistently working towards achieving that end.” To achieve this, the company is currently looking into opportunities in both the Limpopo Province and Kwa-Zulu Natal where there is believed to be significant coal and iron ore deposits.
MADAGASCAR Mining in Madagascar has historically surrounded the production of ilmenite, gemstone, nickel, oil and gas. But the interests of Jindal have surrounded the exploration of the sedimentary rock, limestone. In December 2008, the company acquired limestone blocks in Madagascar and has since then developed a strategic plan for development on the Indian Ocean island. In 2009, the company applied for limestone exploration permits within the areas of Toliara and Soalara – Anakao. It is believed that Madagascar could have resources of more than one billion tonnes of limestone containing steel grade deposits making investment in the area a primary focus for Jindal Africa. The company is planning to build a cement plant which will be supplied by its limestone mines. The cement plant will bring about significant benefits to the local economy and could act as the catalyst for further future investment. At group level, this investment is significant. Raw materials will be exported to steel plants in India that require over two million tonnes per year. Future plans involve developing a deep sea port allied to the cement plant which can accommodate Panamax vessels, while also investigating the prospects of mining precious stones.
Jindal Africa
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There has also been talk of the development of a power plant that will help with the construction of the port, the mines and the cement plant. A thermal power station and a diesel generation unit are currently being considered.
INDIA AND SOUTH AFRICA Relations between South Africa and India have been fruitful in recent years and since the formation of the BRICS association (which South Africa became part of in 2010) the two countries have seen many successful partnerships formed. Jindal’s operations in the country are a perfect example of this and CEO African Business Ventures, Ashish Kumar told the Mail and Guardian that the company plans further exploration in Africa. “We have an ambitious expansion strategy in Africa and have recently added to our portfolio with the acquisition of Canadian coal firm CIC Energy Corp, giving us access to the resource rich country of Botswana,” he said. “Our global vision is to enhance the quality of life for our stakeholders through sustainable industrial and business development. “We see tremendous potential in Africa in delivering returns for our investors and this is underscored by an uncompromising belief in building partnerships with all of
our stakeholders, to the mutual benefit of our communities and countries where we operate,” he added. The company has a fantastic commitment to social responsibility and the communities in which it operates and this is set to continue. Kumar told the Mail and Guardian that the company wants to change the lives of African’s for the better but to do this they have to start with the roots. “Jindal Africa is firmly committed to enhancing the quality of life for all, as demonstrated in large-scale sustainable development initiatives that are producing real dividends for the people of Africa. Since our presence in Africa, Jindal has employed 2500 people across the operations; most of the people are from local communities. “We believe that to bring about a real change, you have to start from the roots,” he said. The company’s main social responsibility efforts centre on education, health, enterprise development and social development and Kumar detailed examples of each when he spoke to the Mail and Guardian, saying: “After a thorough needs assessment, we embarked on a programme to upgrade and provide new infrastructure for schools in the area (Piet Retief, Mpumalanga). We consider this initiative to be an excellent example of nurturing the leaders of tomorrow.
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“Jindal is also an equal opportunity employer, where we are running several empowerment projects, in areas in which we operate. To date we have awarded 12 bursaries to students studying at local universities. “The company’s sustainability programmes also extend to Mozambique, where we invest in education infrastructure development, including a complete renovation of Chirodzi School. We donate books and basic equipment to schools in the region on an ongoing basis. “Shortfalls in local healthcare facilities led to the construction of a clinic on our Mozambique mine site that is open to community members and distributes much needed supplies to local clinics and health centres. We are committed to the spirit of ubuntu, the African philosophy that promotes humanity, a commitment to investing in the social upliftment of the people of Africa. This protects our unwritten social contract with the communities as a responsible corporate citizen that is active in uplifting its communities,” he said. As well as having a profound effect on the communities in which these programmes are deployed, CSR projects also contribute to business sustainability. “Our operational excellence and meaningful sustainability projects pave the way in securing our licence to operate in Africa,” Kumar told the M&G.
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BOTSWANA Jindal’s move into Botswana was solidified in September 2012 when the company purchased coal company CIC for a reported $116 million as mentioned above. The acquisition gave Jindal Africa access to CIC’s high quality thermal coal resources in Botswana and made the company
“We have an ambitious expansion strategy in Africa and have recently added to our portfolio with the acquisition of Canadian coal firm CIC Energy Corp, giving us access to the resource rich country of Botswana” a frontrunner in building a 1200MW power plant in Botswana for power supply to South Africa. The company’s goal in Botswana is to operate three surface mines in the rich coal fields of Mmamabula. The Mmamabula East coalfield is an extension of South Africa’s Waterberg coalfield which is home to over 40%
Jindal Africa of the country’s remaining coal resources. Jindal Africa has undertaken extensive drilling exploration in this area and the results suggest that the Mmamabula East coalfield could contain around 2.7 billion tonnes of coal. The company is confident that these resources are sufficient to supply all the company’s planned coal and energy related projects in Botswana. Country Head South Africa, Anthony Zebert reiterated the company’s commitment to Africa when he spoke to Media Club South Africa and said: “We aim to build our first power plant in Botswana, and I would dearly like to build a steel mill in South Africa.” He added that the company is enjoying mining coal in Mozambique. “This has the potential to supersede South Africa in coal exports,” he said, “and in Mozambique there are fewer restrictions – we can build and own our own railway.” The first coal exports from Mozambique were shipped from the country in the first quarter of 2013 and the company has set a target of three million tonnes of production in the first few years of its operations in Mozambique. Jindal Africa also hopes to employ over 2000 people in Mozambique and this will make it a major employer in the country and an important part of the national economy.
So, as we move into 2014 and Jindal Africa’s operations are continually growing, it looks like the company has managed to achieve its initial ambitions on the continent. The challenge now will be ensuring that growth continues and that the company realises its vision of ‘being a globally admired organisation that enhances the quality of life of all stakeholders through sustainable industrial and business development’. Ashish Kumar sums up the company’s approach to Africa perfectly when he says: “We come as a foreign entity but we want to work as a local company,” and, to date, this tactic has seen great success for this ambitious and motivated company.
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“We are committed to the spirit of ubuntu, the African philosophy that promotes humanity, a commitment to investing in the social upliftment of the people of Africa. This protects our unwritten social contract with the communities as a responsible corporate citizen that is active in uplifting its communities”
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www.jindalafrica.com +27 11 706 8420
(0)1603 618 000 info@industrysa.com East Coast Promotions Ltd, Ferndale Business Centre, 1 Exeter Street. Norwich, Norfolk NR2 4QB