South African gold miners ease some wage demands as strike slams troubled industry – by Geoffrey York (Globe and Mail – September 4, 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 — The vast majority of South Africa’s biggest gold mines have been severely affected by a national strike that began on Tuesday night by nearly 80,000 mine workers.

Of the 23 gold mines targeted by the strike, 17 have been forced to halt operations or have less than half of their workers on duty, according to reports on Wednesday as the strike entered its second day.

There was a glimmer of hope on Wednesday as the leading mine worker union reportedly offered to compromise by cutting its wage demands below its original call for a 60 per cent wage increase, although the details of its new demand were unclear. The seven gold mining companies – including AngloGold Ashanti and Harmony Gold – have insisted that they cannot offer anything more than a 6.5-per-cent wage increase.

The strike, expected to cost the South African economy about $60-million a day, has dealt another blow to a beleaguered industry that already suffers from rising costs and shrinking production. Some analysts predict that it could become the costliest strike in the country’s history. With the two sides far apart, a lockout is also possible.

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Anglo American Platinum to Eliminate Thousands of Jobs in South Africa – by Abayomi Azikiwe (Global Research – September 02, 2013)

http://www.globalresearch.ca/

Downsizing comes amid rising strikes by workers

South African workers are continuing their struggle against the bosses with strike actions spreading from the mines, automobile plants, air transport technology stations to construction sites. On September 3, thousands of members of the National Union of Metalworkers Union (NUMSA) were scheduled to march through Pretoria to the headquarters of the National Association of Automobile Manufacturers of South Africa to deliver a memorandum demanding that the trade group pressure car production firms to settle a strike that was in its third week.

In the most significant industry, platinum mining, the largest owner Anglo American Platinum (Amplats), has announced that up to 7,000 jobs could be eliminated in a restructuring program. The company had earlier threatened to fire twice as many workers but revised its plan to wipe out only 50 percent in the initial proposal.

These developments are taking place throughout the mining industry inside the country. Anglo American, which is also involved in other extractive markets such as gold, has reported a 10 percent decline in value since the beginning of 2013. Amplats produces 40 percent of the platinum sales internationally. The most profitable region for the firm is located in Rustenberg where during 2012 police shot dead 34 miners at the Lonmin corporation facility at Marikana on August 16.

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Tearful Cutifani in appeal to end ‘tide of destruction’ in mining – by Allan Seccombe (South Africa Business Day – August 30, 2013)

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

A DEEPLY emotional Mark Cutifani, the CEO of Anglo American and president of the Chamber of Mines, has urged the government not to add to the risks besetting the mining sector by creating regulatory uncertainty.

“Our most important industry is in crisis and we have not yet found the answer to stemming the tide of destruction,” he said.

Mr Cutifani broke down in tears at the start of a speech at a dinner on Thursday marking the end of the three-day Mining Lekgotla in Sandton, where stakeholders gathered to discuss the sector’s competitiveness and transformation.

He said “cowards, thugs and murderers” and “loud-mouthed opportunists” should not be allowed to intimidate and bully others and to define the dialogue South Africa was having.

Mr Cutifani, the former CEO of AngloGold Ashanti, praised the achievements of South Africa, which had undergone one of the world’s largest social reconstructions since the demise of apartheid in 1994. However, despite the JSE outperforming the New York bourse since 2007, posting a 60% growth, the mining index was flat and had destroyed 30% of absolute value in the same time, he said.

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UPDATE 3-South Africa’s waning gold industry braces for more strikes – by Ed Stoddard (Reuters India – August 30, 2013)

http://in.reuters.com/

JOHANNESBURG, Aug 30 (Reuters) – South African gold miners plan to strike for higher pay from Tuesday, inflicting more damage on an industry that has produced a third of the bullion ever pulled from the earth but is now in rapid decline.

The National Union of Mineworkers (NUM), which represents almost two thirds of the country’s 120,000 goldmine workers, served the mining firms notice of the strike starting from Tuesday’s night shift, the companies said.

Negotiations broke down last week, with the unions and companies still poles apart over pay. The Chamber of Mines, which negotiates on behalf of the companies, said it made a final offer to increase basic wages by 6 to 6.5 percent. The NUM is seeking 60 percent and rival union AMCU wants as much as 150 percent. The companies say those demands are unrealistic, given rising costs and falling bullion prices.

In a sign of the industry’s frustration over the deepening crisis, Chamber of Mines president Mark Cutifani choked back tears on Thursday as he made an emotional appeal for an end to the violence and rounded on “thugs and murderers” he accused of stoking the unrest.

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Congo, beyond the conflict: Six reasons why it matters – by Vava Tampa (CNN.com – August 28, 2013)

http://www.cnn.com/

Editor’s note: Vava Tampa, a native of Congo, is the founder of Save the Congo, a London-based campaign to tackle “the impunity, insecurity, institutional failure and the international trade of minerals funding the wars in Democratic Republic of the Congo.”

(CNN) — Mention DR Congo, Sub-Saharan Africa’s largest country, and what comes to mind? Probably conflict minerals, proxy wars, the rape capital of the world, or the trigger for the 19th century “Scramble for Africa.”

But beyond the despair, there is another country; a country not like any other country in the world — a country with rich ancient traditions, a colorful cultural energy and creativity, amazing potential and much, much more.

Ask historians or archaeologists — one of the earliest known mathematical objects, the Ishango bone, was not made in Ancient Greece, Mesopotamia or Renaissance Europe but around Congo’s Lake Edward around 18,000 BC.

It is certainly difficult to picture this today: thirty-two years of dictatorship followed by wars, invasions and bad governance reduced Congo from being a potential economic powerhouse to one of the world’s poorest countries.

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South African gold producers gear up for strikes from Sunday – by Ed Stoddard and Sherilee Lakmidas (Reuters Canada – August 28, 2013)

http://ca.reuters.com/

JOHANNESBURG (Reuters) – South African gold producers are preparing for bruising strikes that could start as early as Sunday, with some companies planning for stoppages of up to three months in a high-stakes fight between capital and labor in Africa’s biggest economy.

The National Union of Mineworkers (NUM) will give gold producers on Friday 48-hours’ notice of its members’ intention to strike over deadlocked wage talks, a source with direct knowledge of the matter said on Wednesday.

“The decision to issue a strike notice on Friday has now been taken,” the source, who asked not to be identified, told Reuters. Workers could then begin stoppages from the Sunday night or Monday morning shifts in the country’s gold mines.

A complete shutdown of the gold sector could cost South Africa more than $35 million a day in lost output, according to calculations based on the spot price.

This will pile pressure on a struggling economy already weighed down by a slew of ongoing strikes in auto manufacturing, construction and aviation services, and facing threatened stoppages by textile workers and petrol station employees.

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Mining industry needs to look in the mirror, says Cutifani – by Allan Seccombe (South Africa Business Day – August 27, 2013)

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

THE entire South African mining industry needs to “look in a mirror” and take accountability for the sector, Anglo American CEO Mark Cutifani said at the Mining Lekgotla on Monday.

Mr Cutifani, who is also president of the Chamber of Mines, said the mining sector had faced a “tumultuous” year in 2012 and it remained the industry’s intention to “face with brutal honesty” what needed to be done to improve situations that had led to the unsettled sector.

“The Marikana tragedy was a stark reminder that we as an industry need to do more,” Mr Cutifani said at the second Mining Lekgotla, which draws together participants from labour, the government and the mining sector, as well as community and youth representatives.

The mining companies had looked in the mirror and taken full accountability for the state of the industry, Mr Cutifani said. “We ask our partners to also look in the mirror,” he said. “It remains our absolute intention to address the issues we have faced with brutal honesty and as a sector confronted with myriad challenges, we need to chart a path towards future growth and prosperity.

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The Great Potash Power Play – by Gabe Collins (The Diplomat – August 23, 2013)

http://thediplomat.com/

Potash is perhaps the world’s most strategic fertilizer. Mineable deposits are concentrated in a handful of countries, it cannot be synthesized, and crop yields suffer badly without it.

Russia-based Uralkali, the world’s largest potash producer, turned the global potash market on its head when it announced in late July 2013 it would market potash independently and stop selling through the Belarus Potash Company (“BPC”) marketing structure it previously used to coordinate exports and production.

Prior to Uralkali’s move, two major global marketers—BPC and Canada’s Canpotex—controlled around 70% of potash volume traded worldwide, which helped constrain supply and keep prices high.

Uralkali aims to boost its market share in China, where it is estimated that each 10 kilos of pork consumed requires 1 kilo of potash to produce, since Chinese pigs are increasingly fed with potash-hungry corn and soybeans. Similarly, every 44kg of rice eaten in China is thought to require 1 kg of potash to grow, with application intensity likely to rise in the year to come as China runs short of arable land and seeks to produce more grain from a static land area. Uralkali exported approximately 2 million tons of potash to China in 2012—primarily by rail—and now wants to increase this to 2.5 million tons per year, approximately 22% of China’s forecast 2013 potash demand.

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Resource Nationalism Speech – by Gold Fields CEO Nick Holland (Johannesburg – August 15, 2013)

http://www.goldfields.co.za/

This speech was give by Gold Fields CEO Nick Holland at the Gordon Institute of Business Science in Johannesburg on
15 August 2013.

Thank you and good evening, it is certainly good to be here and I’m glad that we’ve mentioned the fact that it’s the eve of the anniversary of the Marikana tragedy. I guess some of the things I’m going to talk about tonight are probably going to be appropriate in the context of that terrible tragedy of over a year ago.

A lot of debate has been raised on resource nationalism. It has been rated the number one risk in various surveys. I guess what is interesting is maybe that risk has been somewhat overshadowed of late by the decline in metal prices across the mining industry, which in of itself I think presents another challenge.So the reason that we’ve decided to look at this topic is to spark some debate. And I think there are going to be a lot of different views on resource  nationalism. What is it really? Is it good? Is it bad? And the other thing I just want to highlight is this is not a South Africa centric presentation.

Many of the problems that we’re currently experiencing in the South African mining industry are not unique to South Africa. The same issues present themselves around the world.

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Resource nationalism can mean growth and prosperity – by Nick Holland (South Africa Business Day – August 16, 2013)

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

Nick Holland is the CEO or Gold Fields.

AT A time when the global mining industry is besieged by falling commodity prices, soaring input costs and investor apathy, resource nationalism strikes fear into the hearts of many mining executives and investors. At Gold Fields we have a different view.

We are strongly in favour of a more equitable distribution of the benefits of the mining economy, provided that we — governments and the mining industry — are aligned on which economic pie it is we are sharing. Is it the ever-shrinking mining earnings pie that has become the norm in most countries, or is it the growing mining economy pie so elusive to most countries?

A debate of this sensitivity requires well-defined parameters. We view resource nationalism as “government actions to extract the maximum developmental impact and value from a country’s natural resources for its people”. We believe this is the right, if not the duty, of every government.

Most developing countries with a natural resource endowment, including South Africa, have a legacy of poverty and inequality. To address this, and to see more sustainable growth, we need to maximise the socioeconomic benefits from the extraction of natural resources without shrinking the mining pie.

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South Africa all but off BHP Billiton’s radar screen – by Martin Creamer (MiningWeekly.com – August 21, 2013)

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

JOHANNESBURG (miningweekly.com) – South Africa has all but fallen off the radar screen of BHP Billiton, the world’s biggest mining company, which on Tuesday reported an 8.7% fall in revenue to $65.9-billion for the year ended June.

The name of the country did not cross the lips of new CEO Andrew Mackenzie and one got the impression that this region’s aluminium, thermal coal and manganese interests are hanging on by a thin thread in a company dominated by iron-ore, oil, copper and coking coal.

When BHP and Gencor/Billiton of South Africa merged at the start of the new millennium, the South African assets helped to lift the chin of a then downcast BHP.

The performance of then standalone BHP, which in merged form has paid out more in dividends than the rest of the mining world put together, was so mediocre that the Economist of London scoffed that the letters BHP really stood for Broken Hearted People, and not Broken Hill Proprietary.

But the powers that be are clearly in no mood to return the favour; instead they are directing any tender, loving care they still have towards potash risk at Jansen in Canada, which is still a cost centre.

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FEATURE-North Nigeria’s poor beat path to nascent mining boom – by Tim Cocks (Reuters India – August 22, 2013)

http://in.reuters.com/

BAGEGA, Nigeria, Aug 22 (Reuters) – Like almost everything else in Nigeria’s economy, mining of metals and other solid minerals fell by the wayside when the West African nation discovered oil.

In the two decades to 1954, foreign companies produced around 360,000 ounces of gold in total, according to government statistics – tiny by today’s standards, but not insignificant for a country approaching independence with high hopes.

By 1964 – post-independence and less than a decade after oil was found in the creeks of the southern Niger Delta – gold production had largely ground to a halt.

Now much of the digging up of Nigeria’s minerals is done by artisanal miners in the largely Muslim north, bereft of the high-tech machinery that makes it safe and brings economies of scale.

“The sector was left in the hands … of untrained and ill-equipped artisans … making negligible contributions to GDP,” was how a government policy brief summed it up last year.

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An African gold rush slows to a crawl – by Iain Marlow (Globe and Mail – August 21, 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.

ACCRA, GHANA – On a shaded patio off a large pink and yellow building in central Accra, Kweku Boohene, a Ghanaian goldsmith with a stubbly grey beard, is watching the glowing coals of his makeshift smelter turn to white ash.

A colleague has just melted down a bit of gold, poured it into an ingot mould and returned inside to a cluttered workshop where five of them usually shape the precious metal into rings and chains with hammers and rolling mills. But for now, there is only one person working. As Mr. Boohene stands there in sandals and a loose-fitting green shirt, two others lounge in patio chairs.

“I used to make 10 rings a day, but now it’s not even one,” said Mr. Boohene, a 35-year veteran in the jewellery business.

In Ghana, Africa’s second-largest gold producer, the yellow metal is big business: Gold currently accounts for about 40 per cent of export earnings. As global gold prices have plummeted – 26 per cent in the first half of 2013 alone – the small-scale miners who supply this workshop have stopped coming by to sell the gold dust and tiny nuggets dug out of Ghana’s red earth.

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Another gold CEO bites the dust – this time at African Barrick – by Lawrence Williams (Mineweb.com – August 21, 2013)

http://www.mineweb.com/

African Barrick Gold’s CEO Greg Hawkins has resigned and has been replaced by Bradley Gordon, formerly with Intrepid Mines, to try and improve the fortunes of the African gold miner.

LONDON (MINEWEB) – African Barrick Gold (ABG), which has seldom seemed able to meet its operating objectives since its spin-off from parent Barrick Gold and listing on the London Stock Exchange three years ago, has announced the resignation of its Chief Executive Officer, Greg Hawkins ‘to pursue other opportunities’, and his replacement by Australian Bradley Gordon who takes over with immediate effect. Gordon resigned from his previous position as CEO of Intrepid Mines last month – presumably with the ABG appointment already settled.

Thus, Hawkins is the latest gold mining company CEO to be ousted, in this case to see if new blood can revitalise the ailing African gold miner. African Barrick stock has lost 73% of its value since its launch in 2010 and, although part of this fall is attributable to the plunging gold price and so outside management control, Hawkins is seemingly carrying the can for the company’s continual underperformance.

ABG operates three mines in Tanzania and is that country’s largest gold miner. The flagship mine is the Bulyanhulu underground operation and the others are Buzwagi (open pit) and North Mara, also an open pit operation. A fourth mine, Tulawaka, was closed down earlier this year as it was uneconomic.

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Amplats to cut 7,000 South African jobs, union ‘shocked’ – by Sherilee Lakmidas and Ed Stoddard (Reuters U.S. – August 19, 2013)

http://www.reuters.com/ 

JOHANNESBURG – (Reuters) – Anglo American Platinum (Amplats) said it planned almost 7,000 job cuts at its South African operations including thousands of compulsory lay-offs, drawing an angry response from a labor union and raising the risk of renewed unrest at its mines.

Amplats (AMSJ.J), the world’s top platinum producer and a unit of Anglo American (AAL.L), had aimed for 14,000 job cuts after posting its first loss last year, but lowered the target after a backlash from the government and the unions, which organized a series of strikes.

After months of consultations with government officials and worker representatives, the company said 6,000 mining jobs would go and that “approximately 900 corporate and overhead employees will also be affected”.

The addition of white-collar job cuts might alleviate some criticism of the lay-off plan, since not only blue-collar workers would be affected. But at least one union saw the decision by Amplats as a betrayal, saying the company had committed only last week to avoiding forced lay-offs.

“We are shocked. Our agreement with Amplats was to cut 3,000 jobs and those jobs would not be forced retrenchments but voluntary severance packages.

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