Coal Mining in Africa by Ray Dinning attorney and tax lawyer

Coal Mining & Exploration in Africa

Coal, a fossil fuel is the largest source of energy for producing electricity, heat and various other energy types present on the earth’s surface. It is a complex mixture of carbon, hydrogen and oxygen together with small amounts of nitrogen and sulphur. Due to the increasing demand of coal and coal products, coal mining and exploration is on all time high. It still continues to be an important activity today. Coal mining is defined as economic excavation of coal from the earth’s crust. Mining companies from around the world are continuously involved in the process of coal mining throughout the year to meet the rising demand of coal. Through technological advancements and extensive research, these companies have found huge coal mines in various parts of the world. Leading coal mining countries include South Africa, Australia, China, Colombia, United States and Ukraine. However, coal mining exploration is considered as the most profitable economic activity in Africa owing to its geographical conditions and unmatched infrastructure.

Coal Mining in Africa
Africa is one of the largest producer of coal in the world. Coal mining companies have found large deposits of coal mines in various areas of Africa. However, of all the leading countries, South Africa tops the chart of having most number of coal mines in Africa. According to latest statistics, South Africa has 11% of world’s coal reserves and produces 6% of global production. Around 80% of the country’s primary energy needs are provided by coal. Various other countries in Africa continuously involved in the process of coal mining exploration in Africa include Mozambique, Kwazulu, Zambia and many such places. With the aid of technological advancements, Coal mining and exploration is emerging as a future potential source of energy both for Africa as well as for the world.

Coal Exploration in Africa

Coal exploration is a complex process of finding coal reserves around various places in the world. The technique requires intensive planning and extensive research done by experienced geologists, coal technologists, mining engineers and geotechnologists. The main aim is the exploration of coal mines for extracting thermal coal and coking coal for various industrial applications. Today, coal exploration in Africa is considered the most fruitful activity as it has been largely serving the economy of Africa. Coal exploration companies are eyeing various areas of Africa for discovering new coal reserves. Coal mines have been found in various parts of Africa including South Africa, Zambezie around Tete province, Mutarara province and various such regions of Africa.

(Taken from www.rachanaglobal.com)

US Universities speculating on African farmland by Ray Dinning

US universities in Africa ‘land grab’
http://www.guardian.co.uk/world/2011…rica-land-grab
Institutions including Harvard and Vanderbilt reportedly use hedge funds to buy land in deals that may force farmers out

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John Vidal and Claire Provost
guardian.co.uk, Wednesday 8 June 2011 20.18 BST
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Farmers work in thhe Sahara desert
US universities are reportedly using endowment funds to make deals that may force thousands from their land in Africa. Photograph: Boston Globe via Getty Images

Harvard and other major American universities are working through British hedge funds and European financial speculators to buy or lease vast areas of African farmland in deals, some of which may force many thousands of people off their land, according to a new study.

Researchers say foreign investors are profiting from “land grabs” that often fail to deliver the promised benefits of jobs and economic development, and can lead to environmental and social problems in the poorest countries in the world.

The new report on land acquisitions in seven African countries suggests that Harvard, Vanderbilt and many other US colleges with large endowment funds have invested heavily in African land in the past few years. Much of the money is said to be channelled through London-based Emergent asset management, which runs one of Africa’s largest land acquisition funds, run by former JP Morgan and Goldman Sachs currency dealers.

Researchers at the California-based Oakland Institute think that Emergent’s clients in the US may have invested up to $500m in some of the most fertile land in the expectation of making 25% returns.

Emergent said the deals were handled responsibly. “Yes, university endowment funds and pension funds are long-term investors,” a spokesman said. “We are investing in African agriculture and setting up businesses and employing people. We are doing it in a responsible way … The amounts are large. They can be hundreds of millions of dollars. This is not landgrabbing. We want to make the land more valuable. Being big makes an impact, economies of scale can be more productive.”

Chinese and Middle Eastern firms have previously been identified as “grabbing” large tracts of land in developing countries to grow cheap food for home populations, but western funds are behind many of the biggest deals, says the Oakland institute, an advocacy research group.

The company that manages Harvard’s investment funds declined to comment. “It is Harvard management company policy not to discuss investments or investment strategy and therefore I cannot confirm the report,” said a spokesman. Vanderbilt also declined to comment.

Oakland said investors overstated the benefits of the deals for the communities involved. “Companies have been able to create complex layers of companies and subsidiaries to avert the gaze of weak regulatory authorities. Analysis of the contracts reveal that many of the deals will provide few jobs and will force many thousands of people off the land,” said Anuradha Mittal, Oakland’s director.

In Tanzania, the memorandum of understanding between the local government and US-based farm development corporation AgriSol Energy, which is working with Iowa University, stipulates that the two main locations – Katumba and Mishamo – for their project are refugee settlements holding as many as 162,000 people that will have to be closed before the $700m project can start. The refugees have been farming this land for 40 years.

In Ethiopia, a process of “villagisation” by the government is moving tens of thousands of people from traditional lands into new centres while big land deals are being struck with international companies.

The largest land deal in South Sudan, where as much as 9% of the land is said by Norwegian analysts to have been bought in the last few years, was negotiated between a Texas-based firm, Nile Trading and Development and a local co-operative run by absent chiefs. The 49-year lease of 400,000 hectares of central Equatoria for around $25,000 (£15,000) allows the company to exploit all natural resources including oil and timber. The company, headed by former US Ambassador Howard Eugene Douglas, says it intends to apply for UN-backed carbon credits that could provide it with millions of pounds a year in revenues.

In Mozambique, where up to 7m hectares of land is potentially available for investors, western hedge funds are said in the report to be working with South Africans businesses to buy vast tracts of forest and farmland for investors in Europe and the US. The contracts show the government will waive taxes for up to 25 years, but few jobs will be created.

“No one should believe that these investors are there to feed starving Africans, create jobs or improve food security,” said Obang Metho of Solidarity Movement for New Ethiopia. “These agreements – many of which could be in place for 99 years – do not mean progress for local people and will not lead to food in their stomachs. These deals lead only to dollars in the pockets of corrupt leaders and foreign investors.”

“The scale of the land deals being struck is shocking”, said Mittal. “The conversion of African small farms and forests into a natural-asset-based, high-return investment strategy can drive up food prices and increase the risks of climate change.

Research by the World Bank and others suggests that nearly 60m hectares – an area the size of France – has been bought or leased by foreign companies in Africa in the past three years.

“Most of these deals are characterised by a lack of transparency, despite the profound implications posed by the consolidation of control over global food markets and agricultural resources by financial firms,” says the report.

“We have seen cases of speculators taking over agricultural land while small farmers, viewed as squatters, are forcibly removed with no compensation,” said Frederic Mousseau, policy director at Oakland, said: “This is creating insecurity in the global food system that could be a much bigger threat to global security than terrorism. More than one billion people around the world are living with hunger. The majority of the world’s poor still depend on small farms for their livelihoods, and speculators are taking these away while promising progress that never happens.”

Social Entrepreneurship Winners Announced in South Africa by Ray Dinning

Winners of the Regional Social Entrepreneurs of the Year for Africa were declared Wednesday at the ongoing World Economic Forum on Africa in Cape Town, South Africa.

This year’s winners include Aleke Dondo of Juhudi Kilimo, Juliana Rotich of Ushahidi, Olivia Van Rooyen of the Kuyasa Fund, and Evans Wadongo of Sustainable Development for All, who received the award from Hilde Schwab, co-founder of the Switzerland-based Schwab Foundation for Social Entrepreneurship.

Hailing the winners’s efforts to promote socioeconomic development in Africa, Schwab said the award will promote social entrepreneurship as a means to advance societies and address social problems in an innovative and effective manner.

Mirjam Schoening, head of the Schwab Foundation for Social Entrepreneurship, said social entrepreneurs are the driving force behind the innovations that improve the quality of life of individuals around the world.

The Schwab Foundation for Social Entrepreneurship was co-founded by Klaus Schwab, founder and executive chairman of the World Economic Forum, and his wife, Hilde. Since its inception in 2000, the foundation has been identifying the world’s leading social entrepreneurs in over 40 countries.

Source: Xinhua

Major Earthquake in Japan – CNN video of damage – March 11, 2011

Section 45 Tax Credits for Waste Coal by Ray Dinning lawyer

With the extension of the Section 45 and Section 45K tax credits in December, 2010, Waste Coal Producers who have a plant placed in service on or before December 31, 2o11 can claim tax credits if they meet certain criteria.

Please contact Ray Dinning, JD, LLM for more information at 757.232.2619.

 

2011 is a Year of Harvest in Africa by Ray Dinning, JD, LLM

2011 is going to be an amazing year in Africa.  The economy is booming, resources are abundant and there is a good workforce.  For information on working or doing business in Africa, call Ray Dinning at 757.232.2619 for assistance.

“Steel Industry Fuel” tax credit NOT extended by Congress by Ray Dinning

In a twist of fate that is our tax legislation in this country, Congress saw fit to NOT extend the Section 45 tax credit for steel industry fuel.

For guidance on the tax law, call Ray Dinning at 757.232.2619.

Green Power by making “steel industry fuel” by Ray Dinning, lawyer

Congress in expanding Section 45 Federal Income Tax Credits for the production of “steel industry fuel” has opened the door for many coal companies in Pennsylvania, West Virginia and elsewhere to claim valuable and sellable Federal Income Tax Credits.  The credits are available for the production of “steel industry fuel” which is a very specific defined product.  ”Steel industry fuel” is produced by recycling coal pond fines or waste coal or coal tar sludge and blending it or spraying it on met coal under very specific guidelines.  This helps coal companies to:

 

Clean up old coal ponds with carbon in the fines by creating a “steel industry fuel”;

Beef up profits through the syndication and sale of the tax credits while being good environmental citizens.

The Section 45 tax credit, according to Ray Dinning, tax lawyer, is designed to benefit a coal company over the course of one to four years through a sizeable tax credit that is not difficult to qualify for under the guidance of Congress and the IRS.

For help with Section 45 Federal Income Tax Credits or the sale of these credits through monetization and syndication, call International Tax Partners at (757) 232-2619.

“Making Social Ventures Work” – Ray Dinning, tax lawyer

Reprinted from Harvard Business Journal (Sept. 2010) by Thompson and MacMillan:

In recent years, we’ve all experienced considerable volatility—financial breakdowns, natural disasters, wars, and other disruptions. It’s clear we need new approaches to the world’s toughest economic challenges and social problems. Entrepreneurs can play a central role in finding the solutions, driving economic growth (building infrastructure, developing local talent, infusing struggling regions with investment capital) and helping hundreds of millions of people worldwide. If successful, socially minded entrepreneurial efforts create a virtuous cycle: The greater the profits these ventures make, the greater the incentives for them to grow their businesses. And the more societal problems they help alleviate, the more people who can join the mainstream of global consumers.

The failure rates for new companies and markets, however, are high. That is true anywhere in the world, including emerging economies. The management challenges associated with producing and marketing goods and services at the base of the economic pyramid include imperfect markets, uncertain prices and costs, nonexistent or unreliable infrastructure, weak or totally absent formal governance, untested applications of technology, and unpredictable competitive responses. Given this daunting uncertainty, entrepreneurs need a framework for “unfolding” success from a perceived or an emergent opportunity.

Turning Uncertainty into Risk

Entrepreneurs and others who want to launch businesses in, say, Latin America, Asia, or Africa but lack reliable data about those environments need to put together the best models and mechanisms they can, documenting their assumptions as they go. Critically, however, they need to systematically test each of the assumptions underpinning their preliminary models against a series of checkpoints and be prepared to change on the fly, redirecting their efforts through a process known as discovery-driven planning. In this way, they can act on emerging evidence instead of obstinately and blindly pursuing infeasible objectives. (See Rita Gunther McGrath and Ian C. MacMillan’s “Discovery-Driven Planning,” HBR July–August 1995.)

What Is Discovery-Driven Planning?

However, this method of planning is necessary but not sufficient to handle high-uncertainty ventures. In the following pages, we’ll look at how to combine discovery-driven planning with four other guidelines for building successful businesses in uncertain markets that we developed during a sustained field program carried out by the Wharton Societal Wealth Program (WSWP). Specifically, we’ll consider four social enterprise projects we helped launch in Africa and examine how the guidelines informed the work in each.

It’s important to note that the lessons here aren’t just for entrepreneurs. The management teams of established multinationals, foundations, large NGOs, and other nonprofits can apply them in any challenging and highly uncertain business situation. In doing so, they can better control their costs, increase their impact on society, minimize the effects of surprises, and know when to disengage from questionable projects.

Lessons from the Field

As part of our research in the WSWP—a nine-year-old field research program at the University of Pennsylvania’s Wharton School of Business intended to examine the use of business models to develop projects that attack societal problems—we worked with 10 groups of local entrepreneurs trying to launch base-of-the-pyramid ventures in the United States and several African countries. Each project faced some or all of the elements of uncertainty cited earlier. In a few instances, even the initial objectives and desired outcomes were unclear, which made it tougher to make decisions about where and how to allocate resources.

“Resource allocation in Africa and which social venture projects to begin with is always a priority. Jumpstart projects which can help create micro enterprise businesses based on the larger resource project is a good start,” says Ray Dinning, social venture lawyer.

Ian MacMillan and James Thompson co-authored this article in Harvard Business Review.

The community project at Cebe by Ray Dinning

Cebe Oceanfront Eco-Resort