“It’s interesting that these themes of crime and political corruption are always relevant” – Martin Scorsese
In this last week there been big corruption cases that have unfolded in the media. The biggest ones are FIFA officials and that former PM of Italy has been sentenced to jail for three years. Both of those cases are well addressed by all major media. So I don’t need to blast them. This here is more or less known. Therefore I write my peace quickly because well, corruption has to be put a lid on. If not you have to address it in the sunshine and let those who steal money from the common man get time to send them to the law and get a just verdict. The pursuit for quick money will not stop. But as long as there are money and an opportunity for some to earn an extra shilling for very little work and make some money or get kickbacks for buying something while working for the government. Well, we as a public can’t accept that. So here are cases all from the mountains of Norway to the delta of Nigeria unto the public perception on road building in Peru. Enjoy!
Earlier this week in Norway a four former executives of the fertilizer company Yara was sentenced and judged in a corruption case. The time they will spend in jail is from 6 months to 3 years depending on how involved the executive was. This case is involving the corruption accusations that the company bribed officials in India and Libya (Økokrim, 2015).
In the U.S. on the 10th of July the former Governor of Virgina Robert F. McDonnell stood trial in court for his a weird connection with a Richmond business man. That the former governor helped the businessman while getting paid to clear his own monies issues. He was already gotten to court in September last year and sentenced to 2 years in jail (Zapotosky, 2015).
In China the Communist Party continues to charge people on corruption. The latest man who has allegedly been corrupt is Patrick Liu a senior executive in the internet company of AliBaba. He isn’t charged for the actions he has done as an executive at AliBaba, but where he used to when he worked at the Social Network site Tencent (SkyNews, 2015).
In the Netherlands there been indicted six civil servants from the police department and defense ministry for taking bribes while purchasing vehicles and trucks for the representative ministry and department. The bribes came as kickbacks and foreign trips on the supplier’s paycheck. The whole total of suspects in this case is 47. So there will be more information to come during the next months (DutchNews, 2015).
In Malawi the President Mutharika and his personal aide Ben Phiri are central in a huge corruption case. This case involves the statehouse deals between Central Medical Stores Trust and the contract valued at MK1.4 Billion to Malawi Pharmacy Limited (Kangwele, 2015).
In Nigeria the former leader of the Head of Service of the Federation (HOS) Mr. Steven Oronsaye was recently charged for involvement in an N2.1bn graft case while being the head of the civil service. A part of the money (N1.2bn) that was siphoned away from the civil service was sent through the company of Global Services Limited and 2 persons connected to the company were also in court. It is also alleged that that Oronsaye siphoned N6.2bn from the pension fund through fake contracts and supplies that never got delivered to the civil service. They will again go to court on Monday the 13th of July in the meanwhile they are detained (Ejike-Abuja, 2015).
In Peru meanwhile the government heads are expected to have been corrupted while building the highway between Peru and Brasil. 71% of people believe corruption was involved while building the Interoceanic highway. The three involved officials are Alejandro Toledo and Alan Garcia. Even President Ollanta Humala is expected to corrupt as well over the building of the road (Ojeda, 2015).
Hope you got something out of it. It’s a worldwide phenomenon. Greed doesn’t sleep it just has many forms. And a quick buck is also something a person wishes. Peace.
In this day and age there can still come some surprises like out of the wind a leaf will fall to the ground. It makes a sound and a whistle. You can never be up to speed about everything. I know about the Ethiopian dam projects, but certain industrial projects have gone in the wind. But then out of nothing the ICL buying out Allana Potash in the Danakil Depression caught my eye. Therefore I started doing research and seeing if I could get some information on the matter. A lot of information isn’t above the sea level yet, it’s still loose ends though. The licenses and the agreements between any company and the sovereign nation of Ethiopia are not at bay. But all the other information is saying certain stories. And tell how big of an issue this can get. Especially when you see how many companies is a-part of this shindig. Hope you get some information that you didn’t before and learn about the Danakil Depression in the Afar Region in Ethiopia.
Introduction to the area:
“The potash potential of Ethiopia was dormant until World War II where Italian and other foreign companies initiated exploration activities in different parts of the extremely hot Danakil Depression of northern Ethiopia, where temperatures regularly exceed +50°C. The companies exploited a number of mineral resources, such as potash and sulphur. The Danakil depression is found down to 110 m below sea level. The evaporites of the central parts of the Danakil Depression cover an area of 1165 km2, the major part of which is known as the Salt Plain” (…) “The Afar region of north-east Ethiopia is covered by Quaternary lacustrine sediments and volcanic rocks of the East African Rift Valley. The central part of the Danakil Depression is covered by a thick evaporite succession (Salt Formation), which is partially covered by Quaternary volcanic rocks” (Geus, 2010).
“ETHIOPIAN POTASH CORP. (ETHIOPIAN POTASH) has signed an Option Agreement to buy over G&B Central African Resources, which holds the title for the G&B Mineral Property in the Danakil Depression, Afar State, Ethiopia” (…) “Pursuant to the Option Agreement, upon the Option Closing, the Founders will also receive, on a pro rata basis, an aggregate of 20,000,000 Resulting Issuer Common Shares at a deemed price of $0.20 per Resulting Issuer Common Share, as incentive payments for their roles in reorganizing, financing and developing the business of G&B and in negotiating the Option Agreement” (…) “The value of the Danakil Potash Permits, the option and the payments under the Option Agreement were determined and negotiated through arm‟s length negotiations. The Danakil Technical Report was filed with the Exchange on December 3, 2010” (…) “ETHIOPIAN POTASH commissioned the production of a Technical Report in compliance with NI 43-101 to both summarise past exploration and to provide guidance for further project development. As a first step this Preliminary Resource Assessment Study (PRAS) from the independent consultant ERCOSPLAN, a German consultancy firm with more than half a century of experiences in industrial potash mining and processing was prepared” (…) “According to official information, exploration and mining licences were granted to Sainik Coal Mining Private Limited from the Ethiopian Ministry of Mines and Energy in 2007. Referring to this source, the deposit is estimated to contain resources of 160 million tonnes (without further specification)” (…) “ALLANA POTASH CORP. reports in 2008 for the part of the Musley deposit within their property an inferred resource amounting to 31.3 million tonnes of sylvinite at 25.4% KCl and 73.9 million tonnes of kainitite at 18.8% KCl, not taking into account mining and processing losses” (…) “The Musley Deposit, in the extension as defined by PARSONS, contains 171.27 million tonnes of mineralised material (55.63 million tonnes KCl) and partly extends onto the G&B Danakil Property. Six of the historical drill holes are located within the south western part of this property” (…) “The modelling of the 6 drill holes within the G&B Danakil Property and nearby drill holes south of the property resulted in inferred geological sylvinite resources of 28 million tonnes at an average grade of 29% KCl from the so-called Sylvinite Member, with additional inferred geological sylvinite/carnallitite resources of 5 million tonnes at an average grade of 22% KCl from the sampled part of the intermediate Member and inferred geological kainitite resources of 95 million tonnes at an average grade of 18% KCl. In these numbers, no deduction for mining and plant losses are considered. Resource estimations refer to the G&B Danakil Property only” (…) “The Danakil Depression stretches some 200km between Lake Bada (lake level 50m below sea level) in the NNW and Lake Acori (lake level 94m below sea level) in the SSE. The deepest point is located at Lake Assale where the lake level is 128m below sea level. This desert area is characterised by a flat surface that is interrupted by only few hills known as Mount Dallol, Black Mountain and Ashe Ale” (…) “Danakil Potash Exploration: Licence 3137-3150/2000 – 265.05km²” (…) “The mining policy of Ethiopia has received partial updating via the Mining and Income Tax Proclamations in 1993 and the supporting Mineral Operations Regulations in 1994 . These laws were established to stimulate the development of mining and to guarantee the property rights of both local and foreign investors. The preamble to the new mining law states that the law recognizes the significant role of private investment in capital formation, technology acquisition and marketing of minerals. The laws foresee different kinds of permits. The permit holders have both rights and obligations” (…) “The Danakil Depression is known as the hottest place on Earth, and is consistently hot throughout the year. Dallol‟s record high of the annual average temperature for an inhabited location on Earth of 34°C was recorded between the years 1960 and 1966” (…) “Because of the harsh conditions, the area of the G&B Property is very sparsely populated, and is mostly only temporarily inhabited by the Afari nomads. In the north western part of the G&B Danakil Property the small (temporary?) settlements of Ghebro (local salt extraction), and Iremle are located. In the northernmost part of the G&B Bada Property several small settlements are situated adjacent to the agriculturally used area on the alluvial fan of the Ragali River delta” (…) “road access is limited, but since 2010 it is in relatively good condition. No railway facility is available. No supply of electrical energy, fresh water and internet access is present. Connection to global system for mobile phone communication (GSM) is not available; the only option for communication at the site is via satellite telephone or radio. Mechanical and technical services as well as fuel cannot be obtained on site. Reasonable infrastructure for this is either present at Mekele or Afdera” (Raushe, 2011).
Information on AgriMinco:
“Following the completion of the maiden National Instrument 43-101-compliant mineral resource estimate, the operator of Danakil Holdings Ltd., Plinian Capital LLP, requested a preliminary investigation into the economic viable mining and processing options for the Danakil potash resources” (…) “AgriMinco’s chief executive officer, Bruce Cumming, comments: “Whilst the results are encouraging, they must be seen against the backdrop of uncertainty that the company continues to face due to the difficulties experienced in attempting to raise additional finance and the existing debt burden the company carries. We continue to focus our efforts on completion either of a capital raise or a corporate transaction. Under the terms of the JV agreement and the amendment thereto, AgriMinco was required to contribute 30 per cent of expenditure in excess of the agreed free carry by April 7, 2014” (…) “The operator of the joint venture, Plinian Capital, and Circum Minerals Ltd., the 70-per-cent joint venture partner, have consented to the release of the information contained herein” (Cumming, 2014).
140122_BHPBillitonLogo
BHP Billiton pulls away:
In 2012 pulled BHP Billiton out of the Danakil Depression. The spokesman for the company commented on it like this: “They already informed the ministry they want to leave” (…) “We have made a decision to discontinue exploration activities in Ethiopia” (…) “This was because following completion of sufficient work it’s not expected to meet BHP’s investment criteria”. The company didn’t deliver any more information to why they pulled away from the project at the time (Davison, 2012).
License giving to Allana:
“The Ethiopian Ministry of Mines has issued a mining license for the country’s Danakhil Potash Project to Allana Potash – a Canadian mineral exploration company. The license was issued after its approval by the Ethiopian council of ministers. A detailed review of the projects feasibility study and the Environmental, Social and Health Impacts Assessment (ESHIA) by the Ministry of Mines and other government departments had been carried out” (Wanene, 2013). “Approval of the ESHIA is conditional on the fulfillment of several action plans, most of which are identified in the ESHIA and already in place. These include monitoring ground water in the region (ongoing), resettlement of two small villages (in progress) and a commitment to community development (part of Allana’s Community Development Plan). Approval of the Company’s ESHIA is necessary for the granting of a Mining License in Ethiopia. The Ministry continues to review Allana’s application for the Mining License and meetings last week in Ethiopia indicate significant progress has been made in the evaluation of the Company’s Feasibility Study. While this work is ongoing, Allana is optimistic that the granting of the Mining License will occur in the next few months” (Mbendi, 2013).
Beginning information on Allana:
Allana had already before 2010 was finished had 60 drilling holes in the Danakil Depression. “Allana tacked on 28 drill holes from its wholly-owned Nova project, which occupies roughly 132-sq.km adjacent to its Dallol concessions and was picked up in a merger with Nova-Ethio Potash in November 2012”. The president and CEO Farhad Abasov is excited and was quoted saying: “We are excited to see the large increase in total mineral resources on the project and the significant conversion of inferred mineral resources into measured and indicated mineral resource categories” (…) “Potash resources continue to expand with our exploration activities which are ongoing on the Nova license. We are encouraged that significant additional mineralization of [carnallite and kainitite] has been delineated and will initiate further study on these resource estimates” (Northern Miner, 2013).
Basic information on Allana:
“Allana’s potash project is comprised of four potash concessions (Danakil Potash Project) located in Ethiopia’s northeastern Danakil Depression totaling approximately 312 square kilometers” (Allana).
“Major Advantages:
Allana has completed a NI 43-101 compliant technical report for the three concessions. The technical report highlighted several unique advantages of this project:
An inferred mineral resource of 105,200,000 tonnes of potash mineralization (Sylvinite and Kainitite) with a composite grade of 20.8% KCI
Near-surface (shallow-depth) potash mineralization (within 50 metres of surface)
Potential for solution or open-pit potash mining
16 drill holes immediately on Allana’s property
2 hole intersect 45 metres of potash mineralization at a depth of 680 metres – demonstrate significant potential to expand potash resource
Unique environment that may provide for low-cost production utilizing solar evaporation and geothermal power
MOP (muriate of potash) and SOP (sulphate of potash) production is feasible (NaFinance, 2009)”
Allana raised funds for construction:
“Abasov and company have raised over $90 million in equity markets and has sufficient cash reserves to reach the construction stage. And the news keeps getting better. Just last month, Allana’s debt financing process reached a new milestone as the company further de-risks the project” (InvestorIntel, 2013). “At this stage, little is known about the role of Ethiopian banks in the transaction for the loans between Afreximbank and Allana Potash” (Keffyalew, 2013). Allana Potash, a Vancouver-based mining company listed on the Toronto Stock Exchange, is set to acquire financing for its mammoth potash mining project in Danakil Depression in the Afar Regional State of Ethiopia in the order of 11.1 billion birr from the little-known-in-Ethiopia Africa Export/Import Bank-Afreximbank (Seyoum, 2013). “In Ethiopia, we are at the moment looking at potash project. It is about $600 million and we are still at the preliminary stage, but we are positive about that,” said Denys Denya, AfrEximBank’s Executive Vice-President for Finance, Administration and Banking Services” (Andualem, 2013).
Getting power-supply to the Danakil depression:
“The study is initiated by the request of Ethiopotash SC for 70MW of power. Ethiopotash, a company established by Dutch investors, is now managed by Yara International, which, in May 2012, upped its share in the company from 16pc to 51pc. Yara International, the Norwegian fertiliser manufacturer, itself is established with a majority share by the Norwegian government” (…) “The area will get power supply from Mekele, Tigray.
“We have studied all options, but Mekelle is better,” Mekuria said. “Since the area is not included under the EPPCo electricity expansion projects, the company will cover the project cost,” he added. However, both Mekuria and WondimuTakele (Eng), state minister for MoWE, say that it is not yet known how much it could cost supplying electricity to the Danakil Depression. The company wants the power supply to be ready for 2014, according to the company’s request” (…) “The project cost of the Danakil Depression concession could reach two billion Birr, according to Hoslestad” (Mesfin, 2012).
The Yara study itself confirms the mining potential in Ethiopia:
“The independent study identified an annual production of 600,000 metric tons sulfate of potash (SOP) over 23 years from reserves (Kainite, Carnallite and Sylvinite) at Yara’s Danakil concession. The company, which aims to begin mining activities in 3Q, 2018, is now seeking equity partners to develop the project” (Yara, 2015).
The potash from Danakil depression goes further:
“The product will be trucked 790 kilometres to Tadjoura, Djibouti, where the project includes a product storage and handling terminal at the new port currently under construction by the Djibouti Port Authority” (Topf, 2015).
Allana Potash getting bought by ICL:
On 22nd June 2015 bought the whole company of 100%, even if it had already bought 16.22% in 2014. So ICL bought the rest now in June 2015. With this trade the ICL get rights to develop the Potash project in Danakil depression. ICL has faith in the Ethiopian government and plans for infrastructure to succeed with the development of the potash mines at the sight in the Afar region of Ethiopia. ICL President & CEO Stefan Borgas, said, “We are delighted to complete our acquisition of Allana Potash and appreciate the strong support of Allana’s Board, management team and shareholders in conducting the process expeditiously. Our purchase of Allana is in line with ICL’s “Next Step Forward” strategy to broaden our sources of raw materials globally and to focus on high growth, emerging markets. Allana gives us a major mining concession in Africa, as well as a talented on-the-ground team with whom we intend to pursue our development of potash resources in Ethiopia. We are excited about the potential of establishing a strong potash platform in the Afar region that will enable us to serve rapidly growing fertilizer markets throughout Ethiopia and Africa, at large, as well as our growing customer base in Asian markets, and which will complement our existing potash operations in Israel, Spain and the UK. We are encouraged by the initial support of our activities by the Ethiopian government, which we trust will be translated into the assistance that we require to fully develop Ethiopia’s natural resources for the benefit of Ethiopia, its farmers and its people, as well as for ICL” (ICL, 2015).
Afterthought:
I won’t write much here now. Because this piece is already at a major size, but I look forward to follow the Danakil Depression and see how this industrial and mining adventure will go. How the companies will earn their cash and how the reports from the area will be. Especially how the Ethiopian government will deliver information on the matter, which will be amazing. Because they keep so much information at bay and never really release anything. Hope you got some knowledge and understand better how this is in Afar Region in Ethiopia. Peace.
Today I will go through a bunch of corruption cases like I have done before. From the executive of Jotun Mr. Gleditsch who doesn’t see bribes of costumes officers as corruption. A brother like me wonders what he then sees as corrupt behavior. Yara has cases with corruption in Libya and India. The executive Milka of Value Packaging Company in Gurajat in Kutch, the leader is accused and arrested for corruption. In Texas Mr. Witt is in a corruption case because of his former employer Royal Shell Nigeria and the Texan court has cases pending. Former Detroit Major Kilpatrick has 23 counts in his belt by now. In the kingdom of Leshoto a lot of high profile cases against former ministers some are postponed and we’re allowed to ask questions about that behavior!
Odd Gleditsch Jr. who took over the business after his father, the paintmaking business in Sandefjord is quoting for saying this to the Norwegian Brodcasting Company (NRK):
“I would not call it corruption if you pay a costumes officer 50 dollars to move your documents upfront in the pile so that the raw materials get quicker out of the harbor” (Veum, 2014). While Odd doesn’t see anything wrong with that, I do, because if you don’t have guidelines and rules to codes of conduct anywhere then it’s hard to know if you’re either right or wrong, but I have a feeling that Mr. Gleditsch Jr. tried to defend his actions.
Well, four former Yara International AS Executives has been charged with corruption after $8m bribing in Libya and India. Public Prosecuter Marianne Djupesland: “The indictment regards very serious acts of corruption, and the police believe we can prove that these people were involved. But it’s up to the courts to make a decision on their guilt”. The for ones accused of corruption are Thorleif Enger, Tor Holba, Daniel Clauw and Kendrick Taylor Wallace. Mr. Wallace has been accused to paid $5m to a Libyan minister in 2007. This was a deal that was between Yara and Libyan National Oil Corporation, and accepted by Mr. Enger, Mr Holb and Mr. Clauw. The executive of Jørgen Ole Halsestad of Yara now has stated: “For Yara as a company, this has been a very serious case, and the indictments underline its gravity” (Hovland, 2014).
In India Mr. Sunil Rajendra Milka a former partner in the Value Packaging Company has been arrested by the Anti Corruption Bureau (ACB) of Gurajat. He was arrested in the village of Galdapar near Gandihidam in Kutch. He was at the office of the Value Packaging Company when they apprehended him. The case is about misusing the ownership of the company in his wife’s name and also allocation of land (Indian Express, 2014). This case is still to be concluded.
In Texas there is still an ongoing case that has been on since 2007 between former oil-engineer Mr. Robert Witt, his former Employer Royal Shell Nigeria Company for the bribing of Nigerian officials. Mr. Witt has complied to the Texan courts that Royal Shell has tried to destroy his reputation while Shell Senior Managers had paid Nigerian contractors who is working for Nigerian officials (Alike, 2014).
In Detroit former Mayor Kilpatrick has been found guilty on 23 counts of corruption and his contractor Bobby Ferguson found guilty of 9 crimes (Detroit News, 2014).
In Lesotho the former finance minister Timothy Thahane been accused of embezzeling R24m from farming projects. This case has been postponed to the extent that High Court Justice Tseliso Monaphathi commented: “It now seems to be the tradition to postpone these high-profile cases … this should not be tolerated. It affects the reputation of this court and all the courts in this country”. Other high profile cases that have been postponed the former deputy prime ministry Mothetjoa Metsing has been accused of embezzling R50m from road projects. Also former Resources minister Monyane Moleleki made licenses for the diamond industry. He has claimed to be too ill to go to court (Jordan, 2014).
My 2 Cents:
This has to make your mind wonder. If it doesn’t I don’t know how to find cases that makes your mind bubbly. Nevertheless, its international cases from Norway to Lesotho, the thing is that we have to work against on this globe. Because everybody want a quick buck and earn it without doing real work. Or getting an extra meal as a civil servant or percentage as a seller as an employer in a new field for your business. Peace.
MinBane 