Africa Mining – Page 146 – Republic of Mining

Anglo’s zinc loss now Vedanta’s sweet gain – by Martin Creamer (MiningWeekly.com – February 25, 2015)

February 25, 2015

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

JOHANNESBURG (miningweekly.com) – London-listed diversified mining company Vedanta Resources has found itself in a sweet spot as the owner of the zinc assets that Anglo American saw fit to sell off four years ago, when China seemed in perpetual oversupply mode and small operations abounded.

But China is no longer supplying as it did in the past and there have been anticipatory price improvements over the last eight months on the expectation that zinc supply is leaving the market.
The only other London Metal Exchange commodity that is approaching zinc’s current price firmness is aluminium, also because of market pessimism engulfing it for so long.

Meanwhile, the reserves of Anglo’s former zinc assets have been significantly extended under Vedanta’s management, to a point where the India-rooted company will have full payback of its original investment even before the deal’s key Gamsberg asset comes into play.

Vedanta bought Anglo Zinc for $1 338-million in May 2010 and has been investing in underground and near-pit development since 2012. The additional life it has given to the Black Mountain mine in South Africa’s Northern Cape and the Skorpion operations in Namibia has added significant value.

Nearly 500 miners rescued from South African gold mine (Deutsche Welle – February 23, 2015)

February 23, 2015

http://www.dw.de/

All 486 miners trapped after a fire broke out in a South African gold mine over the weekend have been rescued. Some of the miners were trapped at a depth of nearly 3.5 kilometers.

The miners, who had been trapped by the fire, were rescued Sunday, according to officials from the Harmony Gold Mining Company.

“We are extremely grateful that all of our colleagues have been brought to surface, without injury,” said Harmony Gold spokeswoman Charmane Russell. “Fortunately in this instance, things went according to plan.”
The men were at work in the mine near Carletonville, southwest of Johannesburg, when a fire broke out at around 7:40 a.m. local time (0540 UTC). The miners were told to move to refuge bays within the mine.

“Our employees have been trained for this,” Russell said. Rescue teams were called in to contain the fire and then moved from level to level to locate the trapped miners.

South African President Jacob Zuma told his fellow citizens to keep the trapped miners in their thoughts during the rescue operation. “I urge all South Africans to keep the miners in their thoughts and prayers during this difficult period,” Zuma said.

EDITORIAL: Investors balk at unpredictable law (Business Day Live – February 20, 2015)

February 20, 2015

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

THE government is inclined to dismiss warnings that its policy choices could discourage foreign investment as either exaggerated or without foundation. But that stance is starting to appear decidedly shaky as investors break their silence to object to opaque lawmaking, and international data on foreign direct investment flows point to a loss of interest in SA as an investment destination.

Anglo American CEO Mark Cutifani recently objected to the government’s decision to reopen debate over minerals pricing, saying this reversal had created mistrust and put SA’s credibility at risk internationally. Meanwhile, private equity firms polled by Bloomberg say returns from South African investments have been shrinking for a decade, making West and sub-Saharan Africa more attractive due to their ability to offer a higher internal rate of return.

Yet despite paying lip service to the need for foreign investment and the importance of policy predictability and business confidence, the government continues to promote and promulgate laws that do the opposite. The draft Expropriation Bill that is now before Parliament, for example, is intended to form the foundation for the pending Protection and Promotion of Investment Bill, which replaces bilateral investment treaties, and the Regulation of Land Holdings Bill, which will ban foreigners from buying agricultural land and limit the size of existing farms to 12,000ha.

Yet it is silent on how it will interact with the Property Valuation Act that was promulgated last year, which provides for the establishment of an office of the valuer-general whose job it will be to value property earmarked for expropriation. This law was intended to overcome the land reform logjam, which the government blames on the failure of the “willing buyer, willing seller” principle.

Uganda: Why Can’t Uganda Simply Stamp Out Blood Minerals? – by Jeff Mbanga (All Africa.com – February 18, 2015)

February 18, 2015

http://allafrica.com/

Let’s talk about blood minerals today. About nine years ago, I was assigned to write a story about Uganda’s gold exports.

Back then, as it is today, a number of government reports would list the amount of revenue the country earned from gold exports. However, you could hardly put a name to a company that exported gold, nor tell where this gold was mined, processed, and flown out.

As part of my prep, I looked up a company, which I will not reveal, that dealt in gold. I was lucky to be granted an interview with one of its top directors. We met at a secluded area, somewhere in Kisementi, at the outskirts of the central business district. The man, of Indian origin, made sure few people were at our meeting point.

He first questioned my interest in the story. He then went ahead and complained about the risks in the business, and told me of his fights with a rival company. By the end of our conservation, I knew this was not a trade for the faint-hearted dealers; the mafia were alive and well in this mineral trade.

After all these years, questions still loom large over the trade in gold in Uganda. The characters that prowl around the city, flaunting money as result of their links to the illegal gold trade from the Democratic Republic of Congo, would comfortably fit in a Martin Scorsese movie script.

Mines are development engines for host countries – ICMM – by Martin Creamer (MiningWeekly.com – February 17, 2015)

February 17, 2015

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

JOHANNESBURG (miningweekly.com) – Mines are proven engines of economic development for the host countries, which benefit significantly from the foreign direct investment (FDI) that mines attract as well as the export earnings that they generate, the International Council for Mining & Metals (ICMM) has found in a unique 214-country study, which attests to the need to strengthen the contribution of mining to economic and social wellbeing.

While the focus of host governments was generally on taxes and royalties, the study showed that a strong new focus needed to be placed on the invaluable long-term benefits of FDI and export earnings.

The ICMM report – a world first in terms of scope and scale – also provided evidence of mining making its most profound contribution in the most impoverished regions of the world.

Under the right conditions, the study found that mining could make a contribution that translated to greater citizen wellbeing and ongoing economic momentum even after mines had closed.

Africa Could Mine Its Way to Prosperity if It Addressed Instability – by Frank Holmes (Value Walk.com – February 16, 2015)

February 17, 2015

http://www.valuewalk.com/

This past week I attended the Investing in African Mining Indaba in Cape Town, South Africa, as both a presenter and a student seeking opportunities. One of the highlights of the conference was former Prime Minister Tony Blair’s keynote address, during which he offered some crucial advice to African governments: To attract and foster a robust mining sector, a commitment to fiscal stability must be made.

Since 2009, Blair has run the Africa Governance Initiative, which counsels leaders in countries such as Rwanda, Sierra Leone, Liberia, Guinea and others.

Simply put, without fiscal stability and predictability in taxation, capital will be unwilling to flow into any country—African or otherwise—for exploration and production. If a government changes its tax policy every three years or so, that instability discourages the inflow of financing. This is bad for Africa.

“The mining sector remains absolutely vital for Africa’s future,” Blair said, “and even with the sharp declines in [commodity] prices, there are tremendous opportunities and there will be, no doubt, an adjustment and reshaping of the face of mining within Africa over these next few years.”

I shared the following map last week, but it’s worth showing again, as it supports Blair’s point. Central and Southern Africa, especially, are extremely commodity-rich and maintain a large global share of important metals and minerals such as platinum, diamonds and gold.

Diamond profit helps Anglo American amid commodities downturn – by Neil Hume and James Wilson (Financial Times – February 13, 2015)

November 3, 2015February 13, 2015

http://www.ft.com/intl/companies/mining

Surging profit from diamonds last year brought some relief for Anglo American, which reported a $2.5bn net loss for 2014 after taking a large writedown on its flagship iron ore project.

Anglo on Friday reported a robust performance by De Beers, the diamond miner and marketing group that it bought in 2011, because of strong gem demand in the US and Asia.

By contrast the steep drop in the price of iron ore, used in steelmaking, led Anglo to take a $3.8bn pre-tax impairment in the value of Minas-Rio, a Brazilian project blighted by cost overruns and delays. The mine was the subject of $5bn of impairment charges in 2012.

Benchmark iron ore prices have halved over the past year, affecting Anglo’s anticipated earnings from Minas-Rio. The FTSE 100 group spent $5bn to buy the mine and almost $9bn to develop it, before starting to ship ore in October.

The problems at Minas-Rio contributed to a loss of confidence in Cynthia Carroll, Anglo’s previous chief executive. Anglo also wrote down the value of some coal projects within $4.2bn of impairments outlined at its 2014 results. The miner said underlying group earnings came to $4.9bn last year, down 25 per cent compared with 2013.

Apple Claims Progress on Conflict Minerals – by Daisuke Wakabayashi (Wall Street Journal – February 11, 2015)

February 13, 2015

http://www.wsj.com/news/technology

In an annual report on labor and environmental practices in its supply chain, Apple said it is making progress eliminating so-called conflict minerals.

The report was less definitive on other issues where Apple has been criticized, including working conditions at some suppliers, or suppliers to its suppliers, highlighting the challenge of policing a global supply chain that extends to hundreds of companies in at least 19 countries.

Apple said it had identified 225 smelters in its supply chain that handle gold, tantalum, tin or tungsten. Sales of those four minerals have been used to fund armed conflicts in the Democratic Republic of Congo; in Asia, they are sometimes extracted by children or rogue miners in dangerous conditions.

Apple said 135 of those smelters were audited last year to verify that they do not use materials that fund armed groups; that’s more than double the 57 smelters audited in 2013.

The company said 64 other smelters in its supply chain have agreed to participate or are currently participating in an audit, while 26 new smelters have not agreed to participate yet.

UPDATE 2-Glencore to spin-off Lonmin stake, cut spending to counter price rout – by Silvia Antonioli (Reuters U.S. – February 12, 2015)

February 12, 2015

http://www.reuters.com/

CAPE TOWN, Feb 11 (Reuters) – Miner and commodities trader Glencore will spin-off its stake in troubled platinum producer Lonmin and cut capital spending to help it cope with a plunge in commodity prices, it said on Wednesday.

Like peers, Glencore has been hit by a rout in prices of commodities such as copper, coal and oil in recent months. Its shares have fallen by about 9 percent this year.

“What this feels like to me is that Ivan (Glasenberg, Glencore’s CEO) is trying to get ahead of the story again, to make himself look proactive and everyone else reactive,” said Bernstein analyst Paul Gait, who rates Glencore “outperform”.

“Both of those measures fit the same strategic goal from a Glencore perspective: to show leadership, like they did with the buyback.” Last year Glencore was the first mining firm to deliver on promises to return cash to shareholders.

Responding to what it called a “volatile market backdrop,” Swiss-based Glencore said it would cut “sustaining and expansionary” capital spending for this year to $6.5-$6.8 billion, with reductions across its businesses. In December, it had forecast spending of $7.9 billion this year.

Mining’s alternative summit: Painting a different picture of Africa’s most conflicted industry – by Rebecca Davis (Daily Maverick – February 12, 2015)

February 12, 2015

http://www.dailymaverick.co.za/page/home/#.VN01bvnF8ds

How can you tell the difference between the Mining Indaba and the Alternative Mining Indaba? One trick is to look for people who are actually miners, or who come from mining-affected communities. If there are any around, chances are good that you’re at the Alternative incarnation. Another trick is to ask people if they paid up to R23,000 for a ticket to the event. If the answer is ‘yes’, then they’re at the Mining Indaba. REBECCA DAVIS has been at the other one.

In 2002, a young man called Fortunate Siziba was walking home in Mapanzure, Zimbabwe, at night when he fell into an open, unsecured, un-lit pit previously used for chrome mining. The pit was 17 metres deep. Siziba was left partially blind.

In 2012, nine-year-old Asa Mpofu fell into an open, unsecured, un-lit chrome mining pit in the same area. She drowned.

In neither case was any compensation paid by the chrome mine operators, or even an apology given. The most assistance that Siziba received from the mine operator was to be transported “in the bucket of a front-loader” to a nearby clinic.

Over the course of a few days at the Alternative Mining Indaba, you hear so many of these kinds of stories that it becomes hard to keep track of each individual case. The atmosphere here is a world apart from that in the glitzy exhibition halls of the Cape Town International Convention Centre, just a few kilometres down the road, where the Mining Indaba is taking place.

What investors want to see in SA mining – by Patrick Cairns (Mineweb.com – February 12, 2015)

February 12, 2015

http://www.mineweb.com/

Addressing key issues in a complex industry.

South Africa’s mining industry remains a highly complex and contested space. Aligning competing interests has proved difficult.

To some extent this is what has resulted in the uncertainty that continues to permeate the mining sector. Mining companies, labour and government seem to have very different opinions on how things should be done, and this leads to instability.

Speaking from the side lines of the 2015 Mining Indaba, the director of equity research at Credit Suisse, Justin Froneman, said that international investors are worried about a number of serious issues in South Africa’s mining industry. And they are prepared to take their capital elsewhere as long as this uncertainty persists.

“The thing people most want is active leadership at both corporate and country level,” Froneman said. “There is a perception that not enough is being done. Things are quite unstable at the moment and investors want to see mechanisms put in place to address that. But unfortunately we are not yet seeing anything.”

He pointed out that one of the major talking points of the Mining Indaba had been the South African government’s desire to create a national mining champion.

Kinross Gold Corp puts massive Tasiast project expansion on ice – by Peter Koven (National Post – February 11, 2015)

February 12, 2015

The National Post is Canada’s second largest national paper.

TORONTO – Kinross Gold Corp. confirmed Tuesday it will not proceed with the massive Tasiast expansion project in Mauritania as the gold price remains weak and the company tries to preserve its balance sheet.

Chief executive Paul Rollinson described it as a “prudent” move that is in the best interests of shareholders. In an interview, he noted that the construction period at Tasiast is expected to last 35 months, and there is a chance the gold price could drop significantly during that period and leave the company short of capital to finish the job.

Gold needs to be higher for this project to make good sense. According to a technical report filed by Kinross last year, Tasiast has a net present value of just US$500-million at a gold price of US$1,200 an ounce (very close to the current level). That does not provide a great return on a project that is expected to cost US$1.6-billion.

“This is a major capital expansion and I want to be extremely disciplined as we contemplate embarking on that expansion,” Mr. Rollinson said in an interview. He added that he continues to look at ways to improve the project.

But this news closes the book on Tasiast for the time being. The project has simply been a disaster for Kinross. The Toronto-based miner acquired Tasiast in 2010 when it spent US$7.1-billion to buy Red Back Mining Inc.

Platinum fuel cells to power five-million Japanese homes – Ivanhoe – by Martin Creamer (MiningWeekly.com – February 11, 2015)

February 11, 2015

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

CAPE TOWN (miningweekly.com) – Japan was building platinum-using fuel cells to provide clean electricity and heat to 5.3-million homes, Ivanhoe Mines executive chairperson Robert Friedland told the Mining Indaba on Wednesday.

Japan was also planning to run the Tokyo Olympics on fuel cells to showcase the arrival of the hydrogen economy. It had also become mandatory for all Japanese government cars to be hydrogen fuel cell driven to ensure cleaner air, which was a growing imperative in a world where 66% of people would be living in cities by 2050.

Platinum-group metals (PGMs) were absolutely critical to having cleaner air, Friedland said in outlining the progress being made at Ivanhoe’s rich Platreef PGMs and nickel project on the northern limb of the Bushveld Complex in South Africa’s Limpopo province, where Japanese government agencies are 10% shareholders.

To show the growing use of PGMs in everyday products, he flashed on to a large screen pictures of fuel-cell driven Toyota and Honda cars as well as fuel-cell-powered smartphone chargers, before going on to provide detail on Ivanhoe’s upcoming Platreef project, where a Stage 2 drilling programme has firmed up 78-million ounces of mechanically mineable PGMs and substantial nickel at a depth of 700 m.

Guinea’s Simandou Auction to Test Appetite for Iron Ore – by Scott Patterson (Wall Street Journal – February 11, 2015)

February 11, 2015

http://www.wsj.com/

Bidding for One of the Most Sought-After Deposits Comes Amid Soft Prices

Mining companies struggling with depressed commodity prices are about to have the opportunity to bid for one of the most sought-after iron-ore deposits in the world, testing the industry’s appetite for new iron-ore supply at a time when many experts say the world is awash in the steelmaking component.

The Guinean government plans to auction the northern half of the massive Simandou iron-ore deposit in the next few months, Guinea’s Minister of Mines Kerfalla Yansane told The Wall Street Journal on the sidelines of the Mining Indaba conference in Cape Town, South Africa.

“We’ll put it on the market and call for companies to come and compete,” Mr. Yansane said.

He said Guinea has signed memorandums of understanding with several large industrial companies to build infrastructure to aid the Simandou project, which lies hundreds of miles from the country’s port in Conakry. The project could cost $20 billion to $30 billion, including rail lines, due to its remote location deep in the hills of southeastern Guinea in West Africa, experts estimate.

The iron-ore deposits, which lie in the northern wing of the Simandou mountain range, are at the heart of an international legal dispute.