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Africa Mining

Turkey imposes restriction on its biggest ferrochrome producer – by Charlotte Mathews (Business Day – December 20, 2013)

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

TURKEY has imposed power restrictions on the country’s biggest ferrochrome producer, Eti Krom, which some analysts hope will help to support prices for one of South Africa’s biggest industries. In 2012, South Africa was the world’s second-largest ferrochrome producer, having lost first place to China largely because of rising Eskom electricity tariffs and power shortages.

South Africa’s biggest ferrochrome producers are Glencore Xstrata in a joint venture with Merafe Resources; International Ferro Metals, which is listed in London; Samancor Chrome; Hernic Ferrochrome; ASA Metals; and Mogale Alloys, owned by Afarak Group (formerly Ruukki Group).

Turkey ranks among the world’s top 10 producers. Ferrochrome is mostly used in stainless steel, whose production is forecast to rise about 5.5% a year for the next few years, as it is closely correlated with global gross domestic product growth. However, ferrochrome prices have been weak recently because of a slowdown in the Chinese economy coupled with growing Chinese production.

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African Barrick to compensate assault victims – by Geoffrey York (Globe and Mail – December 20, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

JOHANNESBURG — A Canadian-owned gold company says it is giving cash payments and other compensation to 14 women who were sexually assaulted by police and security guards at its controversial North Mara gold mine in Tanzania.

African Barrick Gold, a subsidiary of Toronto-based Barrick Gold Corp., says it spent two years questioning more than 200 people in an independent investigation of the sexual-assault allegations, which were first disclosed by Barrick in 2011. “Fourteen women are presently receiving remediation packages,” the company said in a statement to The Globe and Mail on Thursday.

“Although the exact components of each package depends on the individual claimant, they have included cash compensation, sponsored employment to provide job training, financial and entrepreneurial training, education expenses for claimants’ children, relocation expenses, home improvements, health insurance for claimants and their families, and counselling services.”

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Numsa will now recruit from mining sector, says Jim [South Africa mining unions conflict] – by Matuma Letsoalo (Mail and Guardian – December 18, 2013)

http://mg.co.za/ [Johannesburg, South Africa]

Numsa general secretary Irvin Jim has declared war on the National Union of Mineworkers, saying it will recruit openly in the mining industry.

National Union of Metalworkers of South Africa (Numsa) general secretary Irvin Jim has declared war on its sister union – the National Union of Mineworkers (NUM) – saying his union would now recruit openly in the mining industry and welcome NUM members who wanted to join Numsa.

In a move that is intended to appeal to the mining community, Numsa on Wednesday asked its members to donate anything from R100 towards the Marikana Trust, to support families of the 34 miners who were killed by police in August last year.

The NUM, which has been accused by workers of having close ties with mining companies, has lost thousands of workers to rival union Association of Mineworkers and Construction Union (Amcu). As a results of this, the union lost its prime status as Cosatu’s largest union to Numsa.

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Decline Shutters [South African] Mines – by Paul Burkhardt (Bloomberg News – December 17, 2013)

http://www.bloomberg.com/

A half-dozen unemployed workers from the Blyvooruitzicht gold mine southwest of Johannesburg finish off the last scraps of a slaughtered cow in the searing October heat. Since losing their jobs in August, meals have become much less predictable.

The men stand near a small wood fire as the sun shines off a hill of extracted earth, in sight of a housing block that was supposed to be vacated. One holds a jaw bone over the flame, nibbles the meat off, and tosses the rest into a rusty barrel. What’s left of the carcass with its entrails spilling out is starting to dry at their feet.

The scene, resembling something from an apocalypse film out of Hollywood, is an extreme example of the impact gold’s 25 percent drop this year may have on towns around the world that are dependent on the precious metal. Mining companies have announced plans to shutter mines or reduce operations from Nevada and Peru to Papua New Guinea in the Pacific Ocean, as gold heads toward its first annual loss in 13 years.

Blyvooruitzicht’s name means “happy prospect” in Afrikaans. These days that’s not such a sure thing. The mine’s most recent operator, Johannesburg-based Village Main Reef Ltd., cut funding and closed it last summer, letting go the remaining 1,700 workers. Plunging prices made it difficult to profitably extract gold, especially with electricity prices soaring and workers demanding higher wages.

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Zimbabwe: Mugabe Uses Zanu-PF Conference to Rage and Threaten [miners] – by Alex Bell (All Africa.com – December 16, 2013)

http://allafrica.com/

ZANU PF’s ageing leader used the party’s conference this weekend to rage against the West, his old partners in government, the country’s economic position, the mining sector and more.

The 89 year old also moved to threaten some players in the country’s platinum and gold sectors, repeating calls to ban raw mineral exports. “We should not continue to send our minerals out in their raw form,” Mugabe told delegates at the party’s annual conference in Chinoyi.

He singled out Zimplats, a subsidiary of platinum-mining multinational Implats, for “externalising” raw platinum ore. “Zimplats has been exporting platinum but we have very little by way of earnings. We don’t know where the money is going. We must have our money back.”

Mugabe also said the government was considering slashing the number of diamond miners operating in the country. “We should be looking at the possibility of rationalising the mining of diamonds,” he said. “We have six companies mining diamonds, but of these six only three are really worth talking about. We would also want greater transparency.”

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Only legislation will stop minerals being traded at the expense of human rights – by Zobel Behalal (The Guardian – December 16, 2013)

http://www.theguardian.com/uk

Conflict minerals found in cars, electronics and other products will only be eradicated with new laws and business buy-in

One of the key drivers underpinning some of the world’s worst ongoing violent conflicts over the past few years is the extraction and trade of natural resources.

Recently in the Central African Republic (CAR), the Séléka rebels, who have carried out acts of violence against their people, have taken advantage of the diamonds trade to consolidate their power. This has led to the exclusion of the CAR from the Kimberley process aimed at tackling conflict diamonds.

Meanwhile in the Democratic Republic of Congo the extraction of cassiterite, gold, tungsten and coltan has financed warring factions for the past two decades, in a conflict that has already resulted in millions of victims.

But Africa does not have a monopoly on this kind of problem. In Burma the mining industry was militarised for several decades, with the national army controlling mining sites, business operations and exportation. While in Colombia tantalum, wolframite and gold mines as well as their respective business concerns are controlled and taxed by armed groups.

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Chinese investors warned about African mining risks – by Toh Han Shih (South China Post – December 16, 2013)

http://www.scmp.com/business/commodities

Resource-rich continent attractive to China, but potential investors are told to proceed cautiously

Chinese companies are keen to pour money into mining projects in Africa, but investors have received a fresh warning about the risks in the continent’s mining sector. Speakers at the recent Global Resource Investment Conference in Shenzhen told of some of the problems that can beset projects in resource-rich Africa.

“There are many potential Chinese clients who are interested in investing in mines in Africa, but there are lots of challenges,” said Cindy Pan, a lawyer at international law firm Dentons.

Pan cited poor infrastructure, political instability, corruption, cultural differences, as well as other political and legal risks. She cited the case of a Chinese company that invested in a mine in the Democratic Republic of Congo, where officials made repeated demands for bribes.

One Chinese company bought a mine in Mozambique, where the acquisition contract included a clause that allowed the government to buy 15 per cent of the mine, Pan said.

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Think You’re Not Part of the Congo Conflict? Check Your Pocket – by Paul Dewar (Huffington Post – December 13, 2013)

http://www.huffingtonpost.ca/

Paul Dewar is the NDP MP for Ottawa Centre; Official Opposition Foreign Affairs Critic

As we prepare for the holiday season, many of us are thinking about how we can be responsible consumers. The choices we make about where we shop and what we buy have an important impact on the environment and on the people who make the products we enjoy.

Four and a half years ago, I visited the Democratic Republic of the Congo — a place of beauty and heartbreak, mountain gorillas and mass atrocities. For a decade and a half, government forces, rebel groups, and private militias have been competing for control of territory and natural resources.

I spoke with Congolese government officials to see what was being done to enable a future of peace and sustainable development. The most striking response was not an answer but a question — my question, turned back on me: “What are you doing?”

And it was a fair question, because the truth is that the tragedy of the Congo is not merely a Congolese or an African problem. It is our problem — and the reason is probably in your pocket.

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Cutifani vows to restore Anglo American’s iconic status – by Martin Creamer (MiningWeekly.com – December 12, 2013)

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

JOHANNESBURG (miningweekly.com) – Anglo American CEO Mark Cutifani, who this week charted the company’s progress and pathway forward, has vowed to restore its iconic status.

“Anglo American in my 37 years in this industry has been an icon. We intend to put it right back up there,” he said in a media conference call from London.

On Thursday, the the day of the company’s major investor update, Anglo American opened at a higher £13.08 a share on the London Stock Exchange, after investment banker Canadian Imperial Bank of Commerce set a “sector outperform” rating on the shares the day before and investment management company Sanford C Bernstein reiterated the “outperform” rating the next day, American Banking & Market News reported.

Analysts at Deutsche Bank last week reiterated a “buy” rating on the stock in a research note to investors, Analyst RN reported. Hosting a presentation to update investors on the London- and Johannesburg-listed company’s strategy, Cutifani said he knew of no other mining major that was in the process of doubling its earnings before interest and taxation (Ebit).

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Africa’s local banks offer mining lifeline where others fear to tread – by Stephen Eisenhammer (Reuters India – December 12, 2013)

http://in.reuters.com/

LONDON, Dec 12 (Reuters) – African banks are playing an increasingly significant role in the continent’s new generation of mines, providing cash for projects considered too risky or expensive for rattled markets and cautious international lenders.

Central and West Africa is home to some of the world’s largest untapped deposits of gold, iron ore and other minerals, but the promising mine projects often require billions of dollars to be spent on bridges, roads, railways and ports.

That level of investment, combined with the perceived risks of corruption and political uncertainty in Africa, is proving too much for under-pressure equity and debt markets and twitchy overseas banks undergoing enforced belt-tightening since the financial crisis.

A solution, however, appears to be on the mining companies’ own doorsteps, with recent deals suggesting that local banks could provide a lifeline for the region’s junior miners.

In West Africa, banks such as Togo-based Ecobank and Ivory Coast’s Banque Atlantique are moving in on mining projects, emboldened by the expert local knowledge gained from their extensive branch networks.

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Editorial: The two lions of Southern Africa – by Northern Miner (December 11, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

The mining community in Canada probably has more connections to South Africa than any other group in the country, and so the death of Nelson Mandela on Dec. 5 provided many miners here with time to reflect on the man’s leadership, as well as the tortuous history and unsettled future of South Africa, with a natural focus on the fate of the country’s tremendous mineral endowment.

For readers of a certain age, two of the biggest lifetime geopolitical surprises have been the rapid fall of the Soviet Union and the transition of South Africa from an apartheid state to a relatively well-functioning democratic free market — without having passed through a payback-fuelled civil war in between. As has been discussed at length around the world, the latter is largely due to Mandela’s moderate policies and conciliatory leadership once he assumed the South African presidency in 1994.

In order to maintain social peace and keep foreign investment flowing, once they were voted into power, Mandela and the African National Congress did not nationalize South Africa’s mines, and that decision had a profound effect on the careers and life choices of so many in the mining community, both inside and outside South Africa.

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Miners warned about Indonesia, Brazil, India and South Africa investments – by Cecilia Jamasmie (Mining.com – December 12, 2013)

http://www.mining.com/

A significant increase in conflict, terrorism and regime instability in the Middle East and North Africa, along with deepened global political violence and resource nationalism, are the main risks mining investors will face in 2014, according to a report published Thursday by UK-based risk consultancy Maplecroft.

In its sixth annual Political Risk Atlas (PRA) the analysts tell investors to pay special attention to possible populist moves in Indonesia, Brazil, India and South Africa as national elections in these countries will likely boost resource nationalist rhetoric and policies.

According to Maplecroft close to 10% of the countries studied have shown a significant increase in their risks levels, with foreign investors facing more political violence, resource nationalism and expropriations.

In the last year alone, says the report, the risk of resource nationalism has increased 15% as a consequence of governments attempts to offset the risk of societal unrest through tax increases, tougher regulations or outright expropriation.

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Companies Need to Step Up to Meet New Conflict-Minerals Reporting Rule – by Robert Bowman (Forbes Magazine – December 10, 2013)

http://www.forbes.com/

Time is running out for manufacturers to begin reporting on the presence of conflict minerals from the Democratic Republic of the Congo in their supply chains.

Beginning May 31, 2014, publicly traded companies will be required to declare to the U.S. Securities & Exchange Commission whether or not their products or components contain tin, tungsten, tantalum or gold — dubbed “3TG” materials — from mines in the DRC that are engaged in human rights abuses.

The requirement was included in the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama in July of 2010. It has taken nearly four years, however, for the SEC to gather public comments and clarify the rule. And the May 31 deadline is just the beginning of a two-year phase-in.

Nevertheless, many businesses have been dragging their feet on preparations for complying. According to a survey conducted by PricewaterhouseCoopers LLC in the spring of 2013, at least a third of executives were still unsure as to whether it applied to their operations.

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Friedland’s fireside remarks potentially inflammatory to SA platinum mining – by Henry Lazenby (MiningWeekly.com – December 6, 2013)

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

TORONTO (miningweekly.com) – Legendary mining entrepreneur and self-made billionaire Robert Friedland ran the risk of inflaming tension in South Africa at a very sensitive time for platinum miners with his recent “fireside” remarks that underground platinum miners in the country were underpaid, market analysts at SP Angel, in London, said on Friday.

Political leaders and mining companies had worked hard to restore peace and jobs to the platinum sector after the Marikana incident, which was whipped up by competition between competing mining unions the Association of Mineworkers and Construction Union (AMCU) and National Union of Mineworkers (NUM). The Marikana miners’ strike or Lonmin strike was a wildcat strike at a mine owned by Lonmin in the Marikana area, close to Rustenburg, South Africa, on August 16, 2012.

The event garnered international attention following a series of violent incidents between the South African Police Service, Lonmin security, the leadership of AMCU and NUM and strikers themselves, which had resulted in the deaths of 44 people, the majority of whom were striking mineworkers. At least 78 workers were also injured.

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African Governments Fight Mining Layoffs – by Decon Maylie and Nicholas Bariyo (Wall Street Journal – December 4, 2013)

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

High Unemployment Spurs Countries to Intervene With Some of Their Biggest Investors

Johannesburg and Kampala, Uganda – When Vedanta Resources Ltd. VED.LN +0.24% tried to lay off 1,500 workers at its Zambia copper mine last month, the company’s top manager in the country was the one whose job came under fire.

Vedanta had planned to cut 7% of the workforce at its Konkola Copper Mines operation, Zambia’s second-biggest copper project, due to weaker prices. But the proposal so incensed the government that Zambian President Michael Sata threatened to cancel the company’s mining license if a single job was lost.

Shrugging off the threat as “mere rhetoric,” Konkola Copper Chief Executive Kishore Kumar fired 76 workers anyway.

The government responded by revoking Mr. Kumar’s work permit and accusing him of fleeing the country, after he missed a meeting with the interior minister. “He should consider himself not wanted in Zambia anymore,” Interior Minister Edgar Lungu said at the time.

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