Africa Mining – Page 155 – Republic of Mining

Platinum future: Provide dignity, prevent strikes – by Greg Nicolson (Daily Maverick South Africa – July 30, 2014)

July 30, 2014

http://www.dailymaverick.co.za/

The platinum strikes may seem a distant memory to those not working in the industry. While the companies figure out how they’re going to cover the losses and the high increases, work is underway to address some of the underlying causes of the unrest, such as housing. Little has been done, but this could be the year that changes it all.

Thumeka Maswanoqana stood to tell her story of Wonderkop, Marikana.

“There are no proper structures or buildings. There is no water, no electricity,” the Sikala Sonke Women’s Organisation member told the Marikana Commission. “People use pit toilets. It is very difficult. When it’s raining – as we’re in shacks – when it’s raining the workers will stand on top of their beds … These workers work under difficult circumstances, but they are staying in very unbearable places.

“Their lives was supposed to be easy [but] even the people who died during the strike asking for more pay don’t have houses,” said Maswanoqana, speaking in April at Wits University. “We are living under difficult circumstances. Right now during this strike the poverty in Marikana is very bad.”

After this year’s five-month strike at Anglo American Platinum (Amplats), Lonmin, and Impala Platinum (Implats), it was clear discontent among mineworkers went beyond just wage issues.

UPDATE 3-Rio Tinto pulls plug on ill-fated Mozambique coal venture – by Silvia Antonioli and Jim Regan (Reuters India – July 30, 2014)

July 30, 2014

http://in.reuters.com/

LONDON, July 30 (Reuters) – Rio Tinto has agreed to sell coal assets it bought through a $4 billion acquisition of Riversdale in 2011 for just $50 million to an Indian joint venture, ending its ill-fated venture in Mozambique’s coal sector.

The sale of Rio Tinto Coal Mozambique to International Coal Ventures Private Limited (ICVL), includes the Benga coal mine and other projects in Tete province, assets that had a value of $71 million as of March 31 in Rio’s books.

In 2013, Rio Tinto sacked its chief executive and other executives directly involved in the acquisition of Riversdale and wrote off about $3.5 billion of the purchase price, partly owing to a failure to secure a permit to move coal by barge down Mozambique’s Zambezi River.

Rio Tinto is only retaining one of the assets it got from the Riversdale acquisition: the Zululand Anthracite Colliery, a small coal mine in South Africa.

“It has clearly been a horrible experience for Rio Tinto,” said Liberum analyst Richard Knights, saying that the sale price was lower than he expected and implied a further writedown.

“The assets clearly weren’t as good as they thought but in order for them to be written down that aggressively they must have seen very little scope in the foreseeable future for the profitable export of coal from Mozambique.”

Insight – Gold, diamonds feed C. African religious violence – by Daniel Flynn (Reuters India – July 29, 2014)

July 29, 2014

http://in.reuters.com/

NDASSIMA Central African Republic – (Reuters) – Three young rebels, their AK47s propped against wooden stools in the afternoon heat, guard the entrance to the giant Ndassima goldmine carved deep into a forested hilltop in Central African Republic.

Sat in a thatched shack at the edge of a muddy shantytown, the gunmen keep the peace – for a price – among hundreds of illegal miners who swarm over the steep sides of the glittering open pit, scratching out a living.

The mine, owned by Canada’s Axmin (AXM.V), was overrun by the mainly Muslim Seleka rebels more than year ago. It now forms part of an illicit economy driving sectarian conflict in one of Africa’s most unstable countries, despite the presence of thousands of French and African peacekeepers.

Seleka fighters – many from neighbouring Chad and Sudan – swept south to topple President Francois Bozize in March last year. Months of killing and looting provoked vicious reprisals by Christian militia, known as “anti-balaka”, that pushed the rebels back, splitting the landlocked country of 4.5 million people into a Muslim north and the Christian south.

“We control the mine. If there is a problem there, we intervene,” said Seleka’s local commander Colonel Oumar Garba, sipping tea outside a villa in Axmin’s abandoned compound. “People don’t want the French peacekeepers here because they know they’ll chase them away from the mine.”

Obama Seeks Closer Africa Ties as China Is First Choice – by Mike Cohen and David J. Lynch (Bloomberg News – July 29, 2014)

July 29, 2014

http://www.bloomberg.com/

When Uganda sought bids last month for an $8 billion contract to expand the East African nation’s rail network, it only invited Chinese companies to apply.

That condition, agreed to by the Ugandan and Chinese governments, illustrates the hurdles President Barack Obama must overcome as the U.S. tries to challenge China’s status as Africa’s No. 1 investor and trading partner. China’s trade with the continent exceeded $200 billion last year, more than double that of the U.S, which it overtook five years ago.

Obama will step up his efforts to forge closer ties with Africa when he hosts more than 40 of the continent’s leaders at a summit in Washington next week. While the World Bank projects African growth of 4.7 percent this year, the U.S. is looking beyond securing deals and access to a consumer market of 1 billion people to promoting democratic principles and countering Islamist-inspired security threats from Nigeria to Kenya.

“China has got a massive head start,” Daniel Silke, director of Cape Town-based Political Futures Consultancy, said in a July 23 phone interview. “From both a diplomatic and economic point of view, China has made all the running over the last few years so there is quite a catch-up for the U.S.”

China has held five conferences with ministers and leaders across Africa since 2000 as it fosters ties with a continent that provides both resources and a market for manufactured goods.

INTERVIEW-Mozambique still counting on coal, despite price doldrums – by Pascal Fletcher (Reuters India – July 28, 2014)

July 28, 2014

http://in.reuters.com/

MAPUTO, July 28 (Reuters) – Mozambique is still counting on increasing coal exports to expand its infrastructure and drive economic growth, despite depressed global prices which might delay the timing of some major railway and port projects, the transport minister said.

Gabriel Muthisse told Reuters the government was also keen to attract investors to help build the infrastructure needed to exploit huge offshore natural gas reserves in the north.

The World Bank has forecast that coal and gas may generate up to $9 billion in revenues by 2032 for the southern African state, which is still poor and recovering from a 1975-1992 civil war.

Rio Tinto , Brazil’s Vale and India’s Jindal have invested heavily in developing Mozambique’s coal deposits – the fourth-largest untapped recoverable coal reserves in the world.

But billions of dollars of investment in rail and port expansions are still needed to carry the coal from the inland Tete mines to the seaborne market.

With global prices for coal in the doldrums because of oversupply and sluggish demand, experts and producers say Mozambican coal mining operations face an uphill battle to be competitive in the next few years, especially when so much infrastructure capacity still needs to be built.

‘Nationalisation alone will fix capital’s crime’ – by Chris Barron (Business Day Live – July 27, 2014)

July 28, 2014

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

THE National Union of Mine-workers (NUM) was shocked by Anglo American Platinum’s decision to sell its most labour-intensive South African mines, but Dick Forslund, the economist who advised the Association of Mineworkers and Construction Union (Amcu) during its devastating platinum strike, seems unmoved.

“We say good riddance. This is one of the Anglo American subsidiaries that have caused a lot of damage to the South African economy,” says Forslund, an economist and researcher at the Alternative Information and Development Centre.

The NUM said after the announcement by Amplats CEO Chris Griffith this week that it feared 20 000 jobs would be lost. Analysts believe the Amplats decision is the inevitable consequence of the five-month strike.

Forslund, 60, a hardcore socialist from Sweden, rejects the possibility that his advice may have prolonged the strike and put these jobs on the line.

Anyway, he says, Griffith “was planning this long before the strike”.

This is what Griffith implied when he said the decision to walk away from its deepest and most labour-intensive mines had nothing to do with the strike, even if the results announced this week left no doubt about its hugely damaging impact on Amplats.

African Barrick Gold: Better as she goes! – by Lawrence Williams (Mineweb.com – July 25, 2014)

July 25, 2014

http://www.mineweb.com/

African Barrick has achieved a seventh successive quarterly fall in AISC and has improved its guidance on both gold output and costs after another positive quarter’s financial and operating results.

LONDON (MINEWEB) – The measures being taken to bring African Barrick Gold (ABG) – Barrick Gold’s London quoted African gold mining arm – back towards decent profitability seem to be working and while there are still some hiccups – notably a fall in grades at its flagship Bulyanhulu gold mine – its Q2 production results showed substantial further improvement beating most analysts’ consensus with gold output of 178,000 ounces at all in sustaining costs (AISC) of US$1105 an ounce.

This compares with production of 168,000 ounces in Q1 and 164,000 ounces in Q2 2013 – while AISC have shown the best improvements down from $1404 an ounce a year earlier. Consequently it is upping its production guidance for the year and maintaining its guidance on cash and all in sustaining costs.

CEO Brad Gordon was obviously pleased with the latest figures, commenting “We are pleased to report strong results for H1 2014, with increased production and continued cost discipline enabling the business to return to cash generation.. We have now delivered our seventh successive reduction in quarterly all-in sustaining costs (AISC) as we continue to drive operational improvements through the business”.

Will Cutifani answer call for Anglo change? – by David McKay (Miningmx.com – July 24, 2014)

July 24, 2014

http://www.miningmx.com/

[miningmx.com] – A YEAR ago, at Anglo American’s 2013 interim results presentation, the group’s then relatively new CEO, Mark Cutifani, set out the broadest of blue-prints for winning back investor interest.

Return on Capital Employed (ROCE) needed to be 15%, not the 11% that had been previously achieved; the project pipeline, described by Cutifani as ‘constipated’, had to be – for want of a better word – loosened; and any under-performing assets would be culled from the group.

At the time, a mere 11% of the group’s 90-odd assets had met operational targets to which Cutifani provided the gloss: “We have to get our arses into gear”.

The question at the time was how a change in gear would be achieved, and whether Cutifani would be bold and quick enough? A year on, and the answer is becoming clearer.

As with its peer, BHP Billiton, Anglo is taking the scalpel to some of its South African assets starting with the less profitable platinum mines held in the 80%-controlled Anglo American Platinum (Amplats).

“He has made it absolutely, abundantly clear that the Rustenburg and Union assets in Amplats are not priorities for the group’s capital,” said a Johannesburg-based analyst.

EDITORIAL: Platinum miners at a tipping point (Business Day Live – July 23, 2014)

July 23, 2014

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

THE decision by Anglo American Platinum (Amplats) to put some of its Rustenburg mines on sale is hardly surprising. The market and industrial relations turmoil of the past few years was destined to reach a tipping point, and it looks like it has arrived.

In essence, the world’s largest platinum producer has decided to rid itself of its biggest headaches, and hopes someone has the appetite for the pain. The best mines are usually bought, not sold.

After the longest strike on record, driven by the Association of Mineworkers and Construction Union (Amcu), which often demonstrated a poor long-term game, Amplats must have had enough of managing a relationship in which trust seemed impossible to achieve. As counterintuitive as it may sound, the ability of unions and management to manage their sometimes adversarial partnership is a significant factor in staying invested.

The company’s relationship with Amcu is clearly frayed, and it is entirely possible that a way forward in light of further restructuring became a distant prospect.

With the sale of these assets, Amplats also would no longer have to deal with a historical migrant labour problem that requires a lot of funds to mitigate, including the possibility of building houses for all its employees.

Kinross Says BNP Paribas Helping on Tasiast Mine Funding – by Liezel Hill (Bloomberg News – July 22, 2014)

July 22, 2014

http://www.bloomberg.com/

Kinross Gold Corp. (K), the gold company with the cheapest shares among large producers, is working with BNP Paribas SA to arrange financing this year for a $1.6 billion expansion project in Mauritania.

The third-largest Canadian gold miner has taken more than $5.5 billion of writedowns on its Tasiast operation since its acquisition as part of an C$8.2 billion ($7.7 billion) purchase in 2010 of Red Back Mining Inc. Chief Executive Officer Paul Rollinson, who took over from Tye Burt two years ago, is trying to get funding to justify making Tasiast the company’s biggest mine.

“We think we’ll get pretty good terms,” Rollinson, 52, said last week in an interview at the company’s Toronto headquarters. “It just takes longer to structure when you’re working through government agencies and their systems and approval processes.”

The company expects to finalize the Tasiast financing toward the end of the year, Rollinson said. The lenders may include multilateral credit agencies, such as the World Bank’s International Finance Corp., and the funding may total about $700 million to $750 million, he said.

The company won’t make a final decision on the expansion until early 2015, he said. The project was delayed after Rollinson ordered fresh studies to reassess the design. “My theme there is, take the time to get it right,” he said. “Bigger isn’t always better.”

Tanzania: Red Tape Dogs Tanzania’s Leading Gold Mining Firm – by Henry Lyimo (All Africa.com – July 22, 2014)

July 22, 2014

http://allafrica.com/

African Barrick Gold (ABG) is negotiating with the government to recover a whopping US$ 65 million (about 107.9bn/) as Value Added Tax (VAT) refunds accumulated over years due to overly bureaucratic procedures for refunding.

The firm enjoys special VAT relief as part of various tax incentives and exemptions extended to investors in the mining sector. ABG is Tanzania’s largest gold producer and one of the five largest gold producers in Africa.

It currently operates three producing mines in the country — Bulyanhulu, Buzwagi and North Mara, as well as several exploration projects at various stages of development in Tanzania and Kenya.

The company listed on the London Stock Exchange and Dar es Salaam Stock Exchange (DSE) and is a constituent of the FTSE 250 Index. ABG is a unit of Barrick Gold Corporation, the largest gold mining company in the world, with its headquarters in Toronto, Ontario, Canada.

Tanzania is currently the fourth largest gold producer after South Africa, Ghana and Mali. The ABG Chief Executive Officer, Brad Gordon said they were in negotiations with the government to address the problem that is making procurement of local supplies expensive.

“The amount accumulated is very high and it seems its recovery would take long time.

Mozambique trying to ease coal companies’ pain, but no tax breaks – by Pascal Fletcher (Reuters Africa – July 21, 2014)

July 21, 2014

http://af.reuters.com/

MAPUTO (Reuters) – Mozambique is discussing with its foreign coal mining partners ways to help them ride out depressed markets but will not be offering special tax breaks to ease the pain, its mineral resources minister said on Monday.

Esperanca Bias told Reuters the government understood that companies such as Vale of Brazil and Rio Tinto, which helped Mozambique to start up in 2011 as a coal producer and exporter, were feeling the pain of depressed global prices for coal used in steelmaking and generating power.

The southern African nation, which still bears the scars of a 1975-1992 civil war, has the world’s fourth-largest untapped recoverable coal reserves, estimated at over two billion tonnes.

Vale is investing billions of dollars on rail and port networks to bring greater volumes of coal to the market, up from a current export capacity of five million tonnes per year. It is targeting 22 million tonnes by 2017/2018.

But Vale, which announced an accumulated loss of $44 million for Mozambique operations in the first quarter, says it urgently needs to cut operating costs to remain competitive.

“We’re studying this,” Bias said on the sidelines of the 5th Mozambique Coal Conference in Maputo. “We are working on it to see what can be done from our side.” she added.

Anglo American Platinum Plans to Exit Some South African Mines – by Devon Maylie (Wall Street Journal – July 21, 2014)

July 21, 2014

http://online.wsj.com/home-page

Platinum Producer’s First-Half Profit Plunges, Output Falls After Prolonged Strike

JOHANNESBURG— Anglo American Platinum Ltd. AMS.JO +4.55% said on Monday it plans to sell some South African mines as it grapples with rising costs compounded by a five-month-long strike in the country.

The platinum producer also said its first-half profit plunged and it lost more than a third of annual production due to the strike that ended in late June.

“Both management time and capital are finite,” the world’s biggest platinum producer said on Monday. “The decision has been made to possibly exit certain assets that will be better placed in the hands of a new owner.”

Anglo American AAL.LN +0.59% Platinum said it would exit its Union and Rustenburg mines in South Africa and its Pandora joint venture. The Union and Rustenburg mines account for just over a quarter of Anglo American Platinum’s annual platinum production and more than half of its workforce.

The company said it is still assessing its Bokoni operation. Anglo American Platinum said it plans to retain its smelting and refining operations in both Union and Rustenburg. It will also keep its mine in Zimbabwe and several others in South Africa that have lower costs.

Phosphate: Morocco’s White Gold (Bloomberg News – November 04, 2010)

July 21, 2014

http://www.businessweek.com/

(Please note, this article was published in November 2010.)

In May 2009 a petite brunette from Paris wearing black heels scrambled up a pile of mine tailings on the outskirts of the Moroccan town of Khouribga. From up there, Béatrice Montagnier, a hotel specialist with the hospitality consulting firm Horwath, took in the view: parched plains scoured by bulldozers; an old warehouse baking in the sun; a jumble of two-story concrete block homes with a rectangular minaret beyond them.

She spun around 360 degrees snapping photos with her pink cell phone and imagining the future: a planned 800-acre resort project that would attract visitors from around the world. How many hotel rooms would they need? she wondered. Should it be three stars or four? And where would the museum be going? There was one issue—project funding—about which Montagnier had no questions. The estimated $1 billion needed to build the resort would come from the ground beneath her feet.

Miners have been working in Khouribga for almost a century, but only now is the area poised to become central to the global economy. Back in the 1920s pioneers started tunneling through the earth here, digging through layers of sediment formed under an ancient sea, looking for phosphate-rich rock and occasionally plucking out the tooth of a 30-million-year-old shark. The phosphate extracted from the rock, used in fertilizer, detergent, food additives, and more recently lithium-ion batteries, sold for decades in its raw state for less than $40 per metric ton. Those days are gone. It’s currently trading at about $130.

Congo copper output growth to slow in 2014 -mining chamber- by Peter Jones (Reuters India – July 17, 2014)

July 17, 2014

http://in.reuters.com/

Kinshasa – (Reuters) – Growth in copper production in Democratic Republic of Congo will slow in 2014 from its rapid pace the previous year due to insufficient energy supply and uncertainty over new mining laws, Congo’s mining chamber said.

Copper production leapt to a record 914,631 tonnes last year from 620,000 tonnes in 2012 as new mining projects and expansion plans came online.

In a report on the first quarter of this year, the mining chamber predicted that copper output in 2014 would inch up to 922,000 tonnes, annual growth of just 0.82 percent compared with the 47 percent leap the year before.

“(Congo) still has the potential to produce over a million tonnes in 2014 and even more in following years, if it controls the parameters that influence investment, notably electricity supply and the revision of the mining code,” the report said.

The mining sector helped drive economic growth of 8.5 percent in Congo in 2013, which is forecast to rise further to 8.7 percent this year.

Congo possesses enormous reserves of gold, diamonds, copper, cobalt and tin, but the majority of its 65 million people live in poverty due to corruption, mismanagement and war.