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Mining Investment Opportunities in Africa – Africa Global Funds

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Mining Investment Opportunities in Africa

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The largely untapped and unrealized potential that Africa is blessed with has been a magnet that has attracted and continues to attract mining investors to the continent.

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The largely untapped and unrealized potential that Africa is blessed with has been a magnet that has attracted and continues to attract mining investors to the continent.

The spotlight has been firmly focused on Ghana after it was crowned the largest gold producer in Africa in 2019. The predictions for gold production are not waning and it is expected that the production will not only meet but exceed this peak principally due to AngloGold Ashanti’s 30 million ounce mine being restarted and the continuation of production even during the ominous Covid-19 pandemic.

From a regulatory view, the Government of Ghana’s attention has been concentrated on the Minerals Income Investment Fund that allows for the creation of a fund to receive and invest royalties received from mineral resources. The royalties received are envisaged to be invested through a somewhat contested special purpose vehicle, Agyapa Royalties Ltd, that is anticipated to be listed on the London Stock Exchange.

South Africa has consistently been recognized as a key contributor to the mining sector in Africa and it was noted that South Africa not only weathered the Covid-19 storm impressively but also proved to be resilient in the face of the worldwide adversity. It was recorded that the total revenue generated by the South African mining industry for the year ending June 30, 2020 grew by 4% with gold mining companies enjoying an increase of 35% in revenue. Chrome, iron ore, platinum and manganese have all seen prices either holding or increasing – notably iron ore.

In an effort to enable the mining industry to better plan for its future, the South African Government implemented the Broad-Based Socio Economic Empowerment Charter for the Mining and Minerals Industry in 2018. The law governing mining in South Africa has otherwise not undergone any material changes with the most noteworthy being the Amendments to the Mineral and Petroleum Resources Development Regulations.

The Democratic Republic of Congo’s mining legislation, on the other hand, has undergone an immense transformation with the promulgation of the new mining code in March 2018. The codes’ most significant modifications relate to the reduced duration for which an exploration permit and mining permit are granted. The concept of “strategic substances” has also been introduced  with taxes ranging from 2% to 10% being imposed for this genre of substances. Furthermore, a royalty of 10% must be paid to a fund that is dedicated to future generations. With regard to contractors, the codes contain requirements that make it mandatory for the contractors to be Congolese and owned by Congolese shareholders includes reference to cobalt which is used in electric batteries; coltan which is to power electronic devises and germanium which is necessary in making transistors. While the new regime may seem onerous, it should be borne in mine that these strategic substances found in the DRC are not readily available in other areas and the demand for these substances are growing. Having regard to this, compliance with the requirements may be well worth the effort.

In Zimbabwe, platinum and platinum group metals are taking center stage with Great Dyke Investments (GDI) opening a $500m platinum mine in Darwendale. Together with the Zimplats and Unki mines, the GDI mine is projected to assist Zimbabwe in reaching its $12bn mining industry by 2023. Despite its infamous challenges, Zimbabwe (with the second greatest chrome and platinum resource in the world after South Africa) and appears to be emerging as a potential source of investment in Africa.

Appropriately, Zimbabwe repealed its outdated mining laws and introduced new mining legislation in 2018 in an attempt to lure investors. While revised law prevents foreign entities from having a majority shareholding in a mining operation, this restriction does not apply to diamond and platinum mining operations.

Similarly, Tanzania recently overhauled its mining legislation, however, this overhaul was primarily aimed at increasing state revenues from natural resources. In 2017, Tanzania banned the export of unprocessed ores and imposed a 1% clearing fee on all minerals exported from the country, a requirement for the Tanzanian Government to own at least 16% in all mining projects.

Tanzania enjoys fourth place in terms of gold production in Africa and has deposits of rare-earth metals, iron ore and gemstones.

In compliance with this legislation, the Tanzanian Government had a 16% stake in a joint venture with Barrick Gold Corp. and received a dividend of $40m from the arrangement. Expectedly and in accordance with the amended laws, the Tanzanian Government will base all future arrangements with major mining companies on the Barrick model and this will include AngloGold Ashanti Ltd.

Mali, as Africa’s third largest gold producer, has followed suit and proposed its new but unenforced Mining Code. The draft Mining Code is believed to introduce a number of changes including placing an obligation on the titleholder  to contribute to two new mining funds, a Local Development Mining Fund and a Fund for the Financing of Geological and Mining Research, with an amount equal to 0.25% of the monthly turnover before tax or the value of the products extracted during the month in question being contributed to the former fund.

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Amazon completes $4B Anthropic investment to advance generative AI – About Amazon

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Amazon concludes $4 billion investment in Anthropic.

Customers of all sizes and industries are using Claude on Amazon Bedrock to reimagine user experiences, reinvent their businesses, and accelerate their generative AI journeys.

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The work Amazon and Anthropic are doing together to bring the most advanced generative artificial intelligence (generative AI) technologies to customers worldwide is only beginning. As part of a strategic collaborative agreement, we and Anthropic announced that Anthropic is using Amazon Web Services (AWS) as its primary cloud provider for mission critical workloads, including safety research and future foundation model development. Anthropic will use AWS Trainium and Inferentia chips to build, train, and deploy its future models and has made a long-term commitment to provide AWS customers around the world with access to future generations of its foundation models on Amazon Bedrock, AWS’s fully managed service that provides secure, easy access to the industry’s widest choice of high-performing, fully managed foundation models (FMs), along with the most compelling set of features (including best-in-class retrieval augmented generation, guardrails, model evaluation, and AI-powered agents) that help customers build highly-capable, cost-effective, low latency generative AI applications.

Earlier this month, we announced access to the most powerful Anthropic AI models on Amazon Bedrock. The Claude 3 family of models demonstrate advanced intelligence, near-human levels of responsiveness, improved steerability and accuracy, and new vision capabilities. Industry benchmarks show that Claude 3 Opus, the most intelligent of the model family, has set a new standard, outperforming other models available today—including OpenAI’s GPT-4—in the areas of reasoning, math, and coding.

“We have a notable history with Anthropic, together helping organizations of all sizes around the world to deploy advanced generative artificial intelligence applications across their organizations,” said Dr. Swami Sivasubramanian, vice president of Data and AI at AWS. “Anthropic’s visionary work with generative AI, most recently the introduction of its state-of-the art Claude 3 family of models, combined with Amazon’s best-in-class infrastructure like AWS Tranium and managed services like Amazon Bedrock further unlocks exciting opportunities for customers to quickly, securely, and responsibly innovate with generative AI. Generative AI is poised to be the most transformational technology of our time, and we believe our strategic collaboration with Anthropic will further improve our customers’ experiences, and look forward to what’s next.”

Global organizations of all sizes, across virtually every industry, are already using Amazon Bedrock to build their generative AI applications with Anthropic’s Claude AI. They include ADP, Amdocs, Bridgewater Associates, Broadridge, CelcomDigi, Clariant, Cloudera, Dana-Farber Cancer Institute, Degas Ltd., Delta Air Lines, Druva, Enverus, Genesys, Genomics England, GoDaddy, Happy Fox, Intuit, KT, LivTech, Lonely Planet, LexisNexis Legal & Professional, M1 Finance, Netsmart, Nexxiot, Parsyl, Perplexity AI, Pfizer, the PGA TOUR, Proto Hologram, Ricoh USA, Rocket Companies, and Siemens.

To further help speed the adoption of advanced generative AI technologies, AWS, Anthropic, and Accenture recently announced that they are coming together to help organizations—especially those in highly-regulated industries including healthcare, public sector, banking, and insurance—responsibly adopt and scale generative AI solutions. Through this collaboration, organizations will gain access to best-in-class models from Anthropic, a broad set of capabilities only available on Amazon Bedrock, and industry expertise from Accenture, Anthropic, and AWS to help them build and scale generative AI applications that are customized for their specific use cases.

Deepening our commitment to advancing generative AI, today we have an update on the announcement we made to invest up to $4 billion in Anthropic for a minority ownership position in the company. Last September, we made an initial investment of $1.25 billion. Today, we made our additional $2.75 billion investment, bringing our total investment in Anthropic to $4 billion. To learn more about the broader strategic collaboration between Amazon and Anthropic, of which this investment is one part, check out the stories below:

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Amazon doubles down on Anthropic, completing its planned $4B investment – TechCrunch

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Amazon invested a further $2.75 billion in growing AI power Anthropic on Wednesday, following through on the option it left open last September. The $1.25 billion it invested at the time must be producing results, or perhaps they’ve realized that there are no other horses available to back.

The September deal put $1.25 billion into the company in exchange for a minority stake, and certain tit-for-tat agreements like Anthropic continuing to use AWS for its extensive computation needs.

Amazon reportedly had until the end of the first quarter to decide whether to increase its investment to a maximum of $4 billion, and here we are just before the deadline, and the company has decided to throw in the maximum amount.

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Anthropic’s AI models are one of very few that compete at the highest levels of capability (however you define it) yet are available at scale for enterprises to deploy internally or in user-facing applications. OpenAI’s GPT series and Google’s Gemini are the others up there, but upstarts like Mistral may soon threaten that fragile triumvirate.

Lacking the capability to develop adequate models on their own for whatever reason, companies like Amazon and Microsoft have had to act vicariously through others, primarily OpenAI and Anthropic. The two have reaped immense benefits by allying with one or the other of these moneyed rivals, and as yet have not seen many downsides.

What we can take from Amazon’s decision to invest the maximum after (one must assume) getting a pretty close look at how they make the AI sausage over there is, really, pretty scant.

It makes too much strategic sense for these companies, which possess enormous war chests saved up for exactly this purpose (outspending rivals when they can’t out-innovate them), to pour cash into the AI sector. Right now the AI world is a bit like a roulette table, with OpenAI and Anthropic representing black and red. No one really knows where the ball will land, least of all the companies that couldn’t predict or create this technology themselves. But if your bitter enemy puts their chips down on red, it only makes sense for you to bet on black.

Especially if you can bet on black at a discount — which is what Amazon got here, since it could invest at Anthropic’s September valuation, which is most certainly lower than it is today.

That said, if things were looking sketchy over there — the way they must have looked at Inflection before Microsoft pounced on it — Amazon could have backed out or just invested less than the full supplemental $2.75 billion. But that might have sent a confusing signal no one wants getting out there, least of all existing multibillion-dollar investors.

We know Anthropic has a plan, and this year we’ll find out what Amazon, Apple, Microsoft and other multinational interests think they can do to monetize this supposedly revolutionary technology.

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Canada to tighten foreign investment rules for AI, other sectors

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Canada will require foreign companies to warn the government in advance before making investments or acquisitions in artificial intelligence, quantum computing and space technology, Bloomberg News reported on Tuesday, citing an interview with Innovation Minister Francois-Philippe Champagne.

The move will aid the government in conducting a national-security review before transactions get too far advanced and would-be investors may be restricted in their access to target companies’ user data or other property while the inquiry is taking place, the report said.


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Canadians concerned about risk of AI generated fraud

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The tougher rules will also apply to investments in critical minerals and potentially other sectors, Champagne said to Bloomberg.

Earlier this month, Champagne said Canada will crack down on foreign investment in the interactive digital media sector to stop state-sponsored actors from endangering national security.

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