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Africa Mining

Ghana’s Crackdown on Chinese Gold Miners Hits One Rural Area Hard – by Dan Levin (New York Times – June 29, 2013)

http://www.nytimes.com/

MINGLIANG, China — To the people of Shanglin County, gold is a curse. For nearly a decade, thousands of peasants from this rural speck in southern China’s Guangxi Autonomous Region borrowed heavily before boarding flights for Ghana, Africa’s second-largest gold producer, with glinting ambitions and no backup plan.

The Chinese found their gold, though trouble soon found them, in the form of crooked police officers and armed bandits who prowled the mining camps. Then, this month, the Ghanaian authorities declared the mines illegal and arrested more than 200 Chinese miners, accusing them of polluting the land and abusing local workers. Countless others fled as local residents armed with guns and machetes attacked the camps, robbing miners of their possessions and killing some who fought back.

After the crackdown, images of violent deaths and vandalized mining camps blazed across Chinese social media, fueling national anger and soul searching. But here in Shanglin, a mountainous county of 470,000 in one of China’s poorest regions, it is despair over financial ruin that is most pronounced.

“My son might be killed in Ghana, but if he comes back he’s dead anyway,” said Shen Aiquan, 65, whose family borrowed 3 million renminbi, or $489,000, to build a mining operation, though from whom exactly she did not know. All she could do was wait for her son, and the debt collectors who would surely follow.

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South Africa now only world’s sixth biggest gold producer – by (Mineweb.com/Reuters -July 8, 2013)

http://www.mineweb.com/

Thomson Reuters GFMS ranked South Africa sixth in global production in 2012, when it fell behind Peru and produced 177.8 tonnes of gold.

KROMDRAAI/JOHANNESBURG (REUTERS) – A hand drill lying in the hillside tunnel of a 19th-century South African gold mine testifies to the back-breaking labour by black miners that built what was once the world’s biggest bullion industry.

But even with basic tools and cheap labour, costs overran returns at the Kromdraai gold mine north of Johannesburg, which listed in London in 1893 and closed in 1914.

A century later, South African’s remaining gold mines, which still employ a mostly black and lowly paid workforce, look set to follow the same fate, as the sun sets on an industry that has produced a third of the bullion extracted from the planet.

Gold’s sliding price and surging costs are hitting an industry that laid the foundations for Africa’s largest economy but has been slowly dying for decades as ore grades decline and shafts reach depths of 4 kms, the world’s deepest.

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The huge potential of Congo potash – by Lawrence Williams (Mineweb.com – July 5, 2013)

http://www.mineweb.com/

The Republic of Congo (ROC), not to be confused with the neighbouring DRC, has the potential to develop into one of the world’s biggest potash miners over the next decade.

For those who are unaware there are two Congos. The former Belgian colony of the Democratic Republic of Congo – the DRC – is the one which is mostly in the news, with its huge and rich base and other industrial metals, gold and diamond resources. However, lying immediately to the west of much of the DRC on the northern side of the Congo river is the former French colony of the Republic of Congo (ROC – also known as Congo Brazzaville to more easily differentiate itself from its neighbour to the south.)

The ROC, like many African nations has had its own share of difficulties since it cast off its colonial yoke in 1960, but these have not been quite as violent as the problems which have continually beset the DRC over the years and there has been a relatively stable government in place under President Denis Sassou Nguessa since a bloody civil war in 1997. While certainly not exactly a model modern democracy, the ROC has been relatively stable for the past decade and President Sassou has won succeeding Presidential elections, although with suspiciously high percentage majorities!

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Chinese demand to drive African iron-ore projects – by Natalie Greve (MiningWeekly.com – July 4, 2013)

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

An increasing dependency on iron-ore imports by China would present substantial opportunity for the intensified development of African iron-ore projects, the MSA Group geology operations manager Brendan Clarke said at the Geological Society of South Africa’s GeoForum conference on Thursday.

China’s iron-ore import ratio was set to rise from 70% of total consumption to 85%, as local grades declined and the costs associated with the mining and beneficiation of lower-grade ores increased.

While the Chinese government was a significant producer, Clarke believed that domestic producers offered an expensive, yet low-quality product. As a result, the country was the world’s largest importer of iron-ore, bringing in 58% of total production in 2012.

The bulk of these imports were from the Pilbara region of Australia, accounting for 45% of imports. South Africa accounted for 6% of the iron-ore China sourced from outside the country in 2012. “Aside from projects in South Africa, there is very little production elsewhere on the continent, as the mega-projects, such as Tonkolili, in Sierra Leone, Simandou, in Guinea, and Mbalam, in Cameroon, struggle to get over the line,” Clarke commented.

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Mining’s who’s-who leave AMCU out to dry as accord is signed – by Martin Creamer (MiningWeekly.com – July 3, 2013)

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

PRETORIA (miningweekly.com) – The who’s who of the South African mining sector on Tuesday went ahead and signed the framework agreement for sustainable mining without waiting any longer for the emerging Association of Mineworkers and Construction Union (AMCU) to do so, providing a formidable potential bulwark against any errant behaviour during the upcoming wage talks.

Deputy President Kgalema Motlanthe, himself a former mineworker and union leader, led a top table of government, labour and business ratification of the document that AMCU helped to draft 19 days ago, and urged the absent AMCU to do the same as soon as it had consulted fully with its members.

Motlanthe told a media conference that at the Presidential Guest House in Pretoria that there was overwhelming agreement that the framework captured the correct approach to addressing the South African mining industry’s niggling problems.

“It also provides a roadmap,” he said of the framework’s stipulation of issues that had to be tackled forthwith and those that would be tacked in the medium and long term, with inputs from AMCU, the National Union of Mineworkers, Solidarity, UASA, the Chamber of Mines, the South African Mining Development Association and government.

The declaration at the foot of the document signed lays down swift action, no abrogation of responsibilities and immediate meetings to deal with problems.

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World Bank says mining can make double digit contribution to Nigeria’s GDP – by Luke Ajulo (World Stage Group – July 3, 2013)

http://www.worldstagegroup.com/worldstagenew/index.php

WorldStage Newsonline—From the current 0.5 per cent contribution of mining to Nigeria’s Gross Domestic Product (GDP), the World Bank believed that a duble digit figure can be achieved through proper planning.

Speaking at Stakeholders Workshop on the Australian and Canadian Externally Financed Output (EFO) Programme for Mining Sector Development in Nigeria, the World Bank Country Director, Marie Franciose Marie-Nell, said that in partnership with the Canada International Development Agency (CIDA) and the Australian Agency for International Development (Aid), the World Bank was launching a two-year mining sector intervention Programme as a continuation of the Sustainable Management of Mineral Resources Programme which ended last year.

Represented by Mr.Mr. Michael Wong, he said that “it is a stepping stone for a further programme and a wider engagement in the mining sector. As we know, the contribution from the sector is 0.5% GDP, and it can be increased to double digit if possible and we hope that contribution are needed and the Australian government will assist the ministry in developing the roadmap towards the development of the sector.”

He said the Programme is financing timely integrated infrastructural development, adding that the Programme fits into the country’s new system framework for development partners such as DFID, the African Development Bank and others.

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Barrick may wipe out retained earnings with huge Pascua-Lama writedown – by Peter Koven (National Post – July 3, 2013)

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

Barrick Gold Corp. is poised to wipe out all of its retained earnings for the second time in less than four years.

An anticipated writedown of US$4.5-billion to US$5.5-billion on the bungled Pascua-Lama project would eliminate the US$3.9-billion in retained profits that the gold giant reported at the end of the first quarter. Back in 2010, Barrick wiped out more than US$2.2-billion of retained earnings when it took a US$5.2-billion charge to close out its hedge book.

It is highly unusual for a company of Barrick’s size and profitability to be in this position twice in such a short time. And while these are non-cash charges, experts said they point to a troubling trend of poor decision-making and oversight at the world’s largest gold producer.

“The writedowns impact them in perception,” said George Topping, an analyst at Stifel Nicolaus.

The red ink could be a lot bigger when the company reports second quarter earnings in four weeks. Barrick warned of other possible impairments last Friday, and analyst Greg Barnes of TD Securities estimated they could total close to US$10-billion.

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Judge questions court’s role in SEC’s ‘conflict minerals’ rule – by Sarah N. Lynch (Reuters U.S. – July 1, 2013)

http://www.reuters.com/

WASHINGTON – (Reuters) – A federal judge on Monday questioned whether U.S. courts should intervene regarding a rule that forces public companies to disclose if their products contain minerals extracted in the Democratic Republic of Congo, which has been castigated for committing human rights abuses.

Three business trade groups are challenging the “conflict minerals” rule from the U.S. Securities and Exchange Commission, saying it is nearly impossible to track minuscule amounts of such minerals in their supply chains. They also say the rule violates companies’ free speech rights because it makes them engage in “politically charged” speech.

The rule is championed by human rights groups, which say disclosing this kind of information will help socially conscious investors. Opponents say the rule is a compliance nightmare that will cost billions and unfairly tarnish companies’ reputations by forcing them to make political statements about their products.

During roughly three hours of oral arguments, Judge Robert Wilkins of the U.S. District Court for the District of Columbia suggested to an attorney for the trade groups that federal courts should consider deferring to Congress on the matter. “This is a circumstance where a court should really defer to Congress and the executive in an area of foreign policy where the court has no expertise,” he said.

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Mining’s damaging ‘blame game’ destroying South Africa – Xstrata Alloys – by Martin Creamer (MiningWeekly.com – June 26, 2013)

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

JOHANNESBURG (miningweekly.com) – The South African economy could no longer afford the damaging “blame game” under way in the crucial mining sector, which needed to take urgent steps to prepare for the inevitable next commodities boom, Xstrata Alloys executive director Mike Rossouw said on Wednesday.

Speaking during a national radio debate on SAfm’s AMLive, hosted by Dhashen Moodley, Rossouw described South Africa as being “100% dependent” on mining to grow and transform its economy in that the country’s secondary and tertiary sectors were totally mining dependent in some cases and largely dependent in all cases.

The current mining decline was worsening South Africa’s already negative balance of payments at a time when the country needed money to grow and transform.

“We really need to understand mining’s role as a dynamo of the South African economy,” Rossouw added, to support from former Anglo American South Africa head Kuseni Dlamini, who called for recognition to be given to the mining industry’s advances on virtually every single front.

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After Labor Strikes, What’s Next for Platinum? – Interview by Brian Sylvester (The Metals Report – June 25, 2013)

http://www.streetwisereports.com/

Violent South African mining labor strikes shocked the globe in 2012, but the resulting negotiations underway could create more stable supply flows in the long term—that’s how CPM Commodity Analyst Erica Rannestad sees it. In this interview with The Metals Report, Rannestad discusses the key developments that could signal a price rise and which producers could clean up big on high-priced PGMs.

The Metals Report: Erica, the platinum group metals (PGM) sector created a lot of buzz at the beginning of this year. What can investors expect in the coming 12 months?

Erica Rannestad: There’s going to be a lot of development in labor and wage negotiation structures in South Africa. It could potentially improve labor conditions in the platinum mining sector, which would provide more certainty about supply flows.

The PGM markets are highly concentrated, meaning that both supply and demand are heavily reliant on only a few sources. On the supply side, about 75% of platinum mine supply comes from South Africa.

These metals are primarily industrial commodities and their prices move in tandem with industrial activity, mostly in the auto sector. At present, there is weakness in platinum prices because demand from the European auto sector is weak and contracting. During the next 12–18 months, growth could improve in the European auto market, which would be positive for platinum prices.

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Insurgency threat may dim Mozambique’s shine for investors – by Marina Lopes and Pascal Fletcher (Reuters U.S. – June 20, 2013)

http://www.reuters.com/

MAPUTO/JOHANNESBURG – (Reuters) – An economic take-off in Mozambique driven by bumper coal and gas discoveries two decades after the end of a civil war is facing disruption from disgruntled former guerrillas who feel they have not benefited from the post-conflict dividend.

A public threat by the ex-rebel Renamo opposition party to paralyze central rail and road links has put the Frelimo government on alert and alarmed diplomats and investors.

A slide back into the kind of all-out war that crippled the former Portuguese southern African colony between 1975 and 1992 looks unlikely. Nevertheless, Mozambique’s rebirth as an attractive tourism and investment destination could lose some of its momentum after armed attacks in the last two months blamed on Renamo.

The raids in central Sofala province killed at least 11 soldiers and police and three civilians and came after Renamo leader Afonso Dhlakama returned with his civil war comrades to the Gorongosa jungle base where they operated in the 1980s.

“It does bring back all those fears of the war,” said Joseph Hanlon, a senior lecturer at Britain’s Open University and an expert on Mozambique.

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South Africans worried Nelson Mandela’s health more dire than officials saying – by Matthew Fisher (National Post – June 25, 2013)

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

PRETORIA — With virtually no fresh information about the precarious state of Nelson Mandela’s health for four days, South Africans Tuesday feared his condition could be even worse than officially acknowledged.

“There are just so many rumours and nobody will tell us anything,” said Kgopotso Nkoe, a law student at Pretoria University. “We know nothing and it is frustrating. We want to know because we love him as a man who chose peace over revenge and because he did so much for our people.”

Ms. Nkoe and her friend, Faith Sithole, had come to the Mediclinic Heart Hospital to learn more than what the country had been told in three terse bulletins since Saturday, when Mr. Mandela was rushed to hospital in the wee hours.

As of late Tuesday, all that had been officially announced was South Africa’s revered first black president, the man who vanquished apartheid, was in intensive care in “serious, but stable condition.”

Despite the dearth of official news or perhaps because of it, the frail 94-year-old statesman’s anxious countrymen had been speculating — often wildly — about his health since he was hospitalized for the fourth time in seven months for urgent treatment for a recurring lung infection.

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Abe Offers $32 Billion to Africa as Japan Seeks Resources – by Isabel Reynolds & Takashi Hirokawa (Bloomberg News – June 1, 2013)

http://www.bloomberg.com/

Japanese Prime Minister Shinzo Abe pledged 3.2 trillion yen ($32 billion) to Africa as his government seeks to catch up with China in pursuing resources, markets and influence on the continent.

Abe announced the five-year commitment of public and private support in a speech today at theTokyo International Conference on African Development. Officials from about 50 nations are attending the meeting, held every five years, which is the biggest African development event outside the continent since it began in 1993.

Africa’s economic growth is luring Japanese exporters, while the government wants to tap the natural gas and oil there after the 2011 Fukushima disaster led to the closing of Japan’s nuclear plants. Chinese firms helped fuel $138.6 billion in China-Africa trade in 2011, almost five timesJapan’s commerce with the continent, according to the Foreign Ministry, citing International Monetary Fund data.

“China has become a far greater presence than Japan in Africa — it’s overwhelming,” said Kazuyoshi Aoki, a professor at Nihon University in Tokyo who specializes in African matters. “The difference lies in the level of determination. There’s a different perception of Africa’s importance.”

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CORRECTED-UPDATE 2-Two dead in suspected Renamo attacks in Mozambique – by Marina Lopes (Reuters India – June 21, 2013)

http://in.reuters.com/

MAPUTO, June 21 (Reuters) – Gunmen killed two people in ambushes on vehicles in Mozambique on Friday, two days after the opposition Renamo party threatened to sabotage transport routes in the mineral-rich southern African country.

Just before the attacks, police arrested Renamo information chief Jeronimo Malagueta, who on Wednesday had announced that the ex-guerrilla group would halt traffic on main roads and the Sena railway linking the northwest coal-fields to the sea.

Persistent tension between Renamo and the ruling Frelimo party, who fought each other in a 1975-92 civil war, has alarmed citizens and investors just as the former Portuguese colony enjoys a boom driven by bumper coal and gas discoveries.

“We urge all Mozambicans to stay vigilant to premeditated and spontaneous attacks and threats to public safety,” Interior ministry spokesman Pedro Cossa told a news conference in Maputo.

Cossa said a truck driver and his passenger were killed and five others wounded in Friday’s attacks. He denied reports that a bridge was damaged in the central province of Sofala, a Renamo stronghold.

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[Mining] Anti-slavery campaign targets Nintendo for protest day – by Colin Campbell (Polygon.com – June 19, 2013)

http://www.polygon.com/

http://www.walkfree.org/

A new campaign has been launched by anti-slavery organization Walk Free that aims to persuade Nintendo to tighten up its supply chain and avoid the use of ‘conflict minerals’ mined by slave labor.

Walk Free has launched a video lampooning Nintendo characters Mario and Luigi, which states that Nintendo has yet to respond to a forceful campaign to join an electronics industry audit program for conflict-free mineral supplies. The video points out that minerals sourced from some suppliers come from slavery operations in conflict regions, including the Democratic Republic of Congo, where miners are often forced to work at gunpoint.

Walk Free’s website states that the campaign aims to tell Nintendo that “slavery is not a game.” It adds, “We’ve sent 430,558 emails calling on Nintendo to take concrete steps to ensure slave-mined conflict minerals are not in its gaming consoles, and we have heard nothing back.”

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