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Africa Mining

UPDATE 3-Barrick will not suspend copper mine as Zambia backs down on royalties – by Chris Mfula (Reuters U.S. – April 23, 2015)

http://www.reuters.com/

LUSAKA, April 23 (Reuters) – Barrick Gold Corp, the world’s biggest gold producer, said on Thursday it will not suspend operations at its Lumwana open-pit copper mine in Zambia now that the country’s government has reduced mining royalties.

Zambia’s cabinet set the royalty tax rate for open-pit and underground mining at 9 percent on Monday. The corporate income tax rate will be 30 percent and the mineral processing tax rate will be 35 percent when the law takes effect on July 1.

“We appreciate the leadership and engagement of President (Edgar) Lungu and the government of Zambia on this matter,” Barrick Co-President Kelvin Dushinsky in a statement. “While Lumwana still faces challenges, in light of the government’s recent announcement we intend to continue operations at this time” The changes are yet to be approved by the parliament in Africa’s second-largest copper producer, but are expected to receive support from the assembly.

Zambia decided in January to increase royalties for open pit mines to 20 percent from 6 percent and raise rates for underground mines to 8 percent from 6 percent. The move rattled unions and mining companies and forced the government to review the plan.

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Responsible Gold Also Means Supporting Livelihoods of Artisanal Miners – by Tyler Gillard and Roel Nieuwenkamp (Huffington Post – April 22, 2015)

http://www.huffingtonpost.com/theworldpost/

Last year, Congolese civil society leader Eric Kajemba helped broker a deal between the army, local authorities, three powerful Congolese families and a Canadian mining company to demilitarize the Mukungwe gold mine in the Democratic Republic of the Congo (DRC).

The mine supports 5,000 thousand so-called “artisanal” gold miners, who work in harsh conditions and have for years lived under constant threat of extortion and violence by armed groups, the military and criminal gangs.

Kajemba’s efforts, and the support from the mining company and the Congolese government, were made in part because of growing international pressure to ensure that minerals don’t finance or fuel violent conflict or human rights abuses when mined in conflict zones.

Yet this same push for “conflict-free” minerals has also created new challenges for mines in eastern Congo, like Mukungwe, to access formal gold markets, mainly because of unreasonably high expectations from the market that go beyond international standards.

In 2010, the US Congress adopted section 1502 of the Dodd-Frank Act, obliging public companies to report on products containing certain minerals that may be benefiting armed groups in the DRC.

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AMNESTY INTERNATIONAL NEWS RELEASE: Digging for Transparency: How U.S. Companies are Only Scratching the Surface of Conflict Minerals Reporting (April 22, 2015)

http://www.amnestyusa.org/

Click here for report: http://www.amnestyusa.org/sites/default/files/digging_for_transparency_hi_res.pdf

Nearly 80 per cent of U.S. public companies analyzed by human rights groups are failing to adequately check and disclose whether their products contain conflict minerals from Central Africa, a new report by Amnesty International and Global Witness reveals.

The report, Digging for Transparency, analyzes 100 conflict minerals reports filed by companies including Apple, Boeing and Tiffany & Co under the 2010 Dodd Frank Act (Section 1502), known as the conflict minerals law. The findings point to alarming gaps in U.S. corporate transparency.

Under the law, more than one thousand U.S.-listed companies that believe they may source minerals from Central Africa submitted reports to the U.S. Securities and Exchange Commission (SEC) in 2014, the first year they were required to do so. The law is designed to reduce the risk that the purchase of minerals from Central Africa contributes to conflict or human rights abuses.

The Democratic Republic of Congo (DRC) is an important source of minerals – including gold, tin, tungsten and tantalum – for global businesses.

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Is Hillary Clinton Taking ‘Blood Phosphate’ Money From Morocco? – by Julian Pecquet (U.S. News and World Report – April 13, 2015)

http://www.usnews.com/

Julian Pecquet is the Congressional Correspondent for Al-Monitor.

Critics of a $1 million Clinton Foundation gift see a ploy to build support for illegal exploitation of the “last colony in Africa.”

WASHINGTON — Presidential hopeful Hillary Rodham Clinton is endorsing the illegal exploitation of disputed lands and risks undermining four decades of UN diplomacy by taking money from Morocco, critics say.

Clinton, who’s expected to announce her candidacy for the Democratic nomination April 12, has come under fire for accepting foreign contributions to the Clinton Foundation, most recently a $1 million donation from OCP, a fertilizer giant owned by the Moroccan government. Left unsaid in the initial reports: OCP — the Office Chérifien des Phosphates — is a major player in the exploitation of mineral resources from the Western Sahara, a disputed territory known as the “last colony in Africa” that Morocco took over after colonial power Spain abandoned it in the 1970s.

“You’ve heard of blood diamonds, but in many ways you could say that OCP is shipping blood phosphate,” Rep. Joe Pitts, R-Pa., told Al-Monitor. “Western Sahara was taken over by Morocco to exploit its resources and this is one of the principal companies involved in that effort.”

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The rapid rise in mining wages represents a turning point – by Sikonathi Mantshantsha (The Rand Daily Mail – April 21, 2015)

http://www.rdm.co.za/

Has the mining industry finally come to the party by paying sufficient wages to its employees? It looks like it. Last week Gold Fields agreed to raise the average wage of its employees by 10%/year for the next three years, a rate that is almost four hundred basis points higher than last year’s 6.1% consumer price inflation rate.

The wage agreement that the gold company reached with organised labour in SA is a significant development on the path to normalising labour relations in SA.

It is also a clear indicator that important lessons were learnt from the Marikana tragedy almost three years ago, and the enormous value destruction on the platinum belt during the five-month strike last year.

The most important part of the deal is that it was reached without any loss in productivity for the company or income for the workers through strike action.

In some ways the Gold Fields settlement for its 3 500 South Deep — its only asset in SA — employees validates the sacrifices made by workers on the platinum belt in 2014.

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New dust buster initiative sounds potential death knell for silicosis scourge – by Martin Creamer (MiningWeekly.com – April 20, 2015)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – A spectacular new dust control system announced at a Chamber of Mines (CoM) of South Africa conference on Monday is described as the closest the industry has come to a silver bullet to put an end to the curse of silicosis and other lung diseases that have plagued the South African mining industry for more than a century.

Representatives of government, labour and business heard at the CoM-facilitated launch that the real-time airborne pollutant monitoring system is now in place to potentially bring an immediate halt to dust spikes that have posed a silent killer threat since the days of the Cousin Jack Cornish miners on the Witwatersrand in the late 1800s.

“It’s a huge step towards the progress in our quest for zero harm,” CoM adoption team manager: dust Gerrie Pienaar told the conference attended by Creamer Media’s Mining Weekly Online. (Also see attached video).

“It’s possibly the closest thing to a silver bullet we’re ever going to have,” the CoM Mining Industry Occupational Safety and Health dust manager Johan van Rensburg told Mining Weekly Online in a video interview. “If it’s adopted eagerly at all levels, this thing will fly,” Van Rensburg added.

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Zambia: Cabinet Slashes Mining Royalties to 9 Percent – by George Mwenya (All Africa.com – April 20, 2015)

http://allafrica.com/

Zambia’s Cabinet today announced new changes to the controversial mining tax, slashing royalties for open cast and underground mining down to 9%.

Under the previous government of President Michael Sata, royalties had been bumped up to 20%, sending chills across the investment community as many multinational mining companies threatened to shut down operations.

Shortly after winning last January’s election however President Edgar Lungu suspended the controversial tax pending the new rules which were proposed today.

The suggestions will still await the approval of parliament with the date off effect set for July, 1st should parliament go ahead with the proposals.

The measures approved by cabinet include the following: Mineral royalty tax rate for open cast mining and underground mining operations will be pegged at 9 percent;

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SA gold miners wrestle with housing targets – by David McKay (MiningMx.com – April 17, 2015)

http://www.miningmx.com/

[miningmx.com] – THE release of a preliminary report into how South African mining firms measured up against the targets outlined in the 2004 mining charter, which was updated in 2010, was predictably focused on ownership.

This is the issue regarding the mining charter’s demand that a minimum 26% of South Africa’s mining companies be owned by historically disadvantaged South Africans (HDSAs). The mining sector believes that target has been met whilst the Department of Mineral Resources (DMR) insists it has not.

The difference of opinion turns on the DMR’s refusal to acknowledge transactions that are now no longer in existence of which the best example is Mvelaphanda Resources, a Johannesburg-listed mining company that was closed in about 2010.

Ngoako Ramalathlodi, mines minister, has agreed to take the matter to the High Court jointly with the Chamber of Mines. As a lawyer, he knows that fighting the matter separately could take a considerable amount of time and lead to more uncertainty for the sector.

A lesser known aspect of the mining charter, however, is the DMR’s unhappiness with the sector’s efforts to improve housing and living conditions, as well as sustainable development. As with the ownership targets, the DMR believes the sector has failed the charter.

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THE BIG READ: Nicolau tears into Carroll – by Chris Barron (Business Day Live – April 12, 2015)

http://www.bdlive.co.za/

FORMER Anglo Platinum CEO Neville Nicolau says he might have been able to save the world’s biggest platinum miner from last year’s crippling five-month strike if he had not been given the cold shoulder by Cynthia Carroll.

At the time of their disagreement, the US-born Carroll was CEO of Anglo American, which owns 78% of Anglo Platinum, and chairwoman of Amplats. Nicolau, who was CEO of Amplats from 2008 to July 2012, said in an interview that he took a “very significant” proposal to the Amplats board about how it could survive falling platinum prices and looming labour strife — but the board was not interested.

“Cynthia Carroll disagreed completely with what I wanted to do with the company,” he says.

Nicolau’s frank admissions mark the first time that the boardroom unhappiness about Carroll’s leadership style has spilt out. Carroll left the group in November 2012, shortly after Nicolau, under intense pressure from shareholders.

“There were certain actions which I needed to take. Amcu [the Association of Mineworkers and Construction Union] was on its way in and there was a better way to manage that. The metal price was on its way down and there was a better way to manage that. There were opportunities to consolidate the platinum sector.”

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[South Africa] Mine strikes, outages will add to misery – by Ntsakisi Maswanganyi (Business Day Live – April 10, 2015)

http://www.bdlive.co.za/

MINING production rose sharply while manufacturing fell in February compared with a year ago, according to Statistics SA data released on Thursday.

The trend has been attributed to low base effects. The two sectors make up a large share of gross domestic product and the latest data suggest economic growth got off to a slow start this year.

The Manufacturing Circle, which represents the majority of producers in SA, said the figures were concerning. Electricity outages and looming strikes in the public sector and gold mines would add more misery in coming months, Manufacturing Circle executive director Coenraad Bezuidenhout said.

A public servants’ strike would hit manufacturers through lower demand for products, Mr Bezuidenhout said. “And a strike at gold mining would be even more concerning because they supply to manufacturers,” he said.

Wage negotiations between unions representing about 1.3-million public servants and the government are subject to conciliation, while pay talks in the gold and coal sectors are expected to start next month.

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Norilsk Sees Africa Cutting Platinum Output on Spending – by Yuliya Fedorinova (Bloomberg News – April 7, 2015)

http://www.bloomberg.com/

OAO GMK Norilsk Nickel sees South African output of platinum-group metals declining in the next several years as the Russian mining company leads investors in creating a $2 billion palladium fund.

“Investments in a vast amount of projects in South Africa were delayed and it’s hard to expect an increase in output in the region,” Anton Berlin, head of strategic marketing at Norilsk, said in an interview on Monday. “Most likely, it will even fall.”

This year, South African output will recover to match its 2013 level of 4.4 million ounces of platinum and 2.4 million ounces of palladium following a sharp decline caused by five months of strikes in 2014, he said.

Production of platinum and palladium, which are mined from the same deposits and used in automobile catalytic converters, has been lower than demand since at least 2012. Opaque stockpiles held by hedge funds have contributed to price volatility, according to Norilsk.

More than 1 million ounces of potential output were lost during strikes in South Africa that ended in June, according to research by Johnson Matthey Plc. The platinum market had a deficit of almost 1 million ounces last year, which should narrow to 500,000 ounces this year, according to Norilsk’s estimates.

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As beneficiation debate rages, experts insist focus must be on niche sectors, upstream manufacturing – by Jade Davenport (MiningWeekly.com – April 2, 2015)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – The contentious debate surrounding South Africa’s beneficiation strategy and how best it should be undertaken has been placed under the glare of the spotlight again and has served to intensify tensions between government and the mining industry over continuing mineral policy uncertainty.

The debate flared up again in February follow- ing Mineral Resources Minister Ngoako Ramathlhodi’s announcement at the Mining Indaba that government intended to investigate the possibility of imposing developmental pricing on key strategic minerals and compelling producers of precious metals to sell at reduced prices.

Developmental pricing would be lower than the already-agreed-to “mine gate price”, essentially an export parity price less transport, which was a hard-won concession on the part of mining companies during discussions on the drafting of the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill in 2013.

Government intends to use developmental pricing to enforce the beneficiation of the country’s still extensive mineral resource endowment, a mechanism it believes will stimulate the South African economy by diversifying sectors, enhancing the quantity and quality of exports, and creating decent employment.

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[South Africa] Mining charter ‘silent’ on crucial ownership issue – by Liesl Peyper (Miningmx – April 1, 2015)

http://www.miningmx.com/

[miningmx.com] – SOUTH Africa mines minister, Ngoako Ramatlhodi, made the best of a very bad situation when he said yesterday he would allow the High Court to rule on the ‘once-empowered, always-empowered’ principle in the Mining Charter.

“It was a good PR exercise on behalf of the Department of Mineral Resources (DMR),” said Nicola Jackson and Eric van den Bergh, both partners at law firm Fasken Martineau’s global mining group.

“His announcement sends the right message to current (and future) industry stakeholders that the DMR values the participation of the industry players, and that it’s cognisant of the ramifications of the ‘once-empowered, always-empowered’ principle not being applied.”

Jackson and Van den Berg said that despite the practical issues that lie ahead, it was a good call for Ramatlhodi to look to the courts for clarification on the ‘once-empowered, always-empowered’ matter. “Any other route would only exacerbate the trust issues between government and the sector.”

However, whether Ramatlhodi and his legal team would successfully argue against the contentious principle in court remains to be seen. “It’s difficult [to predict the outcome], because the charter is a very nefarious, nebulous document,” said Chris Stevens, a director at Werksmans Attorneys.

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South Africa seeks court decision on mining black ownership rule – by Zandi Shabalala (Reuters U.K. – March 31, 2015)

http://uk.reuters.com/

PRETORIA – (Reuters) – South Africa’s mines ministry and the industry have agreed to ask the courts to help them resolve a dispute over a black ownership target of 26 percent for mining companies, the two sides said on Tuesday.

Mines minister Ngoako Ramatlhodi said there was “no consensus” on the issue as he gave details from an assessment of how the industry has complied with the targets set out for it in a state charter aimed at redressing the imbalances of white apartheid rule which ended two decades ago.

The main sticking point is the industry contention that once a company is 26 percent black-owned, it has effectively complied, even if some of the black shareholders then sell out. The government says companies must retain the 26 percent ratio as an absolute minimum.

Failure to meet the targets can result in mining permits or rights being revoked in an industry which is an increasingly hard sell to foreign investors in the face of often violent labour unrest, depressed prices and soaring wage and power costs.

South Africa’s Chamber of Mines said it had agreed with the ministry to approach the courts on the ownership target issue “in order to break the impasse, and to avert any confusion that may be damaging to investor perceptions”.

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Lusaka paying for its indecision – by Victor Kgomoeswana (Independent Online – March 29 2015)

http://www.iol.co.za/news

While Zambia see-saws over its mining tax regime, the DRC has overtaken it as a copper source, writes Victor Kgomoeswana.

Johannesburg – The African week went by pretty quickly for me, especially with the Monetary Policy Committee (MPC) of the SA Reserve Bank leaving interest rates unchanged. I need to pay off those debts, while the current rates last.

This MPC meeting happened while African finance ministers and a number of central bank governors met in Addis Ababa, continuing on that long road towards the alignment of Africa’s fiscal and monetary policy landscape.

Back in South Africa, Eskom gave us another grim reminder of the power crisis hovering above and leaving most people whispering in the dark, even as unions are calling for the axing of the chairman of the power utility.

Egypt also had to ration its electricity supply due to a fuel shortage. How’s that for Cape to Cairo? Our cricket team bowed out of the semi-finals, setting up their opponents for a final clash with Australia – although I would plead with my fellow South Africans to stop using the C-word this time around.

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