Africa Mining – Page 176 – Republic of Mining

AFRICA INVESTMENT-South African platinum fund tempts mine investors – by Jan Harvey (Reuters India – July 25, 2013)

July 26, 2013

http://in.reuters.com/

LONDON, July 25 (Reuters) – South Africa’s platinum sector, already under pressure from rising costs, labour unrest and falling metal prices, is now facing a rival for investment flows — a major new physical platinum fund with unprecedented levels of demand.

The New Gold Platinum exchange-traded fund (NewPlat) has pulled in more than half a million ounces of metal since its launch three months ago, worth 7.6 billion rand ($780 million) at today’s prices. The fund’s holdings currently total more than 543,000 ounces, a level it took the world’s largest platinum-backed ETF, New York-based ETFS Physical Platinum — which holds 611,847 ounces of metal — more than two years to achieve.

A great deal of investment in NewPlat, analysts say, has come from funds in South Africa choosing to seek exposure to platinum prices directly through the physical metal, effectively delivering a vote of no-confidence in South Africa’s beleaguered mining companies.

While shares in South African platinum producers are felt to be unattractive given the industry’s problems, investors have taken account of threats to supply from the mines, and detected tentative first signs of better times ahead for the European motor industry, which uses a lot of platinum in exhaust systems.

Anglo American silicosis claimants turn to South African courts – by Sherilee Lakmidas (Reuters U.K. – July 25, 2013)

July 26, 2013

http://uk.reuters.com/

JOHANNESBURG – (Reuters) – A British court has thrown out a lawsuit against Anglo American South Africa brought by miners who contracted the deadly lung disease silicosis when they worked in South Africa, saying it did not have jurisdiction to hear the matter.

A lawyer for the 2,336 miners said on Wednesday many of them planned to file papers in the next few days in South Africa seeking damages against the South African unit of the global mining giant.

“Anglo American South Africa believes that the court correctly found that the English court does not have jurisdiction to hear this claim,” said Anglo American spokesman Pranill Ramchander.

Anglo American (AAL.L), which switched its headquarters from Johannesburg to London in 1999, no longer has gold mines in South Africa but the lawyers said its Johannesburg-based unit still had assets of around $15 billion (9 billion pounds).

“Today’s ruling was a pyrrhic victory for Anglo American, which as the largest gold mining company over the past 50 years still has to face compelling claims by thousands of miners affected by dust-related lung diseases,” said Richard Meeran of Leigh Day, which is representing the miners.

Congo Raises Tax on Copper, Cobalt Concentrates by Two-Thirds – by By Michael J. KavanaghJuly (Boomberg News – July 25, 2013)

July 25, 2013

http://www.businessweek.com/

The Democratic Republic of Congo’s Katanga province raised its tax on copper and cobalt concentrates to $100 per metric ton from $60 as the country prepares to ban their export at the end of this year.

“We needed a way to discourage companies from continuing to export concentrates, so we raised the tax,” Valery Mukasa, chief of staff for Mines Minster Martin Kabwelulu, said yesterday in an interview in Kinshasa, the capital.

The Central African nation is trying force mining companies to increase the value of their exports by fully processing minerals within the country’s borders, Mukasa said.

Congo was the world’s eighth-largest producer of copper and the biggest producer of cobalt last year, according to the U.S. Geological Survey. At least 13 companies exported concentrates of copper, cobalt, or a copper-cobalt concentrate last year, according to Katangan provincial Mines Ministry statistics.

No quick fix as Anglo’s new boss prepares to woo investors – by Clara Ferreira-Marques (Reuters U.K. – July 24, 2013)

July 25, 2013

http://uk.reuters.com/

LONDON, July 24 (Reuters) – Anglo American’s new boss will lay out his stall on Friday after four months in the job and while investors are not counting on a quick fix, they are betting his plans will include cost cuts, more disciplined spending and potential asset sales.

Anglo, the smallest of the major diversified miners, has underperformed its peers, most recently battling labour unrest in South Africa, where it generates half its earnings, and multi-billion dollar cost overruns in Brazil.

Investors piling into BHP Billiton, Rio Tinto and Anglo in 2006 would have made more than one and a half times their money at BHP and seen returns of 65 percent at Rio. But they would have lost money at Anglo – a negative total return of around 16 percent, according to Reuters data.

Anglo posted its first loss in a decade in 2012, a year of hefty writedowns and CEO departures across the industry. According to Citi, last year Anglo’s return on equity, a measure of profitability, hit its lowest level since the 1930s.

So while the market may not be preparing for what some analysts called a “big bang” menu of asset splits or a radical and frequently debated platinum spin-off – all are demanding change from boss Mark Cutifani, an Australian former miner and engineer who joined from bullion producer AngloGold.

Japan has vision for California-style ‘platinum valley’ in SA – by Helmo Preuss (Business Day Live – July 23, 2013)

July 24, 2013

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

JAPAN plans to encourage a “platinum valley” in South Africa similar to the US’s Silicon Valley, minister in the Japanese embassy in Pretoria Ken Okinawa told BDlive in an exclusive interview last week.

“What we want to do is encourage South Africa to establish a kind of platinum valley here similar to Silicon Valley in California. This facility would aim to find new uses for platinum, while also addressing issues such as job creation and beneficiation,” he said.

To promote this, a senior Japanese expert in fuel cells would shortly come to South Africa, he said.

Government-led projects have supported the commercialisation of fuel cells for many years in Asia, Europe and North America, and this has led to cost reduction, technological advancements and customer acceptance.

Yoshinori Tanaka of the national policy unit in Japan said in 2012 that the need for platinum group metals was likely to increase as more fuel cells that used platinum as a catalyst were installed in cars and homes.

Mark Cutifani to set out his vision for Anglo American – by James Wilson and Andrew England (Financial Post – July 22, 2013)

July 24, 2013

http://www.ft.com/home/us

Metals prices are under pressure. Costs remain sky-high. And disgruntled shareholders want more money back. Yet still there is a consolation for most mining chief executives: their problems are not as bad as Mark Cutifani’s.

At Anglo American, the diversified miner he has led since April, Mr Cutifani does not merely have to pep up the company’s financial performance. In South Africa, where Anglo’s roots date back nearly 100 years, he has to show political savvy to negotiate a sometimes violent environment of labour unrest and government anger. In Brazil, Anglo’s flagship iron ore project is wildly over schedule and budget.

This week Mr Cutifani, one of a cohort of recently anointed chief executives at the world’s largest mining groups, has promised his first public explanation of how he intends to improve Anglo, which underperformed its peers during the mining boom. Since 2008 Anglo’s total shareholder return has halved compared with a fall of 24 per cent for Rio Tinto and a 44 per cent increase for BHP Billiton.

“The company has not been delivering on shareholder expectations,” he acknowledges. “We need a much more commercial, value-focused mindset.” Rivals including BHP and Rio have promoted insiders to their top jobs, arguably giving them a head start in addressing a markedly more pessimistic environment for the sector.

SA mining and the almost ‘unwinnable’ labour situation – by Jeff Candy (Mineweb.com – July 23, 2013)

July 23, 2013

http://www.mineweb.com/

Norton Rose Fulbright’s Joe Mothibi discusses the lay of the South African mining labour landscape and looks at the best and worst case outcomes for the current gold wage negotiations

GRONINGEN (MINEWEB) – GEOFF CANDY: Hello and welcome to this edition of Mineweb.com Newsmaker podcast. Joining me on the line is Joe Mothibi – he is a partner with Norton Rose Fulbright. Joe we saw over the course of last week, significant movement on the wage negotiation space within the South African gold sector. We saw the gold companies represented by the Chamber of Mines, putting out their first offer of 4% increases across the board for basic wages and for housing allowances, and on the other end of the spectrum we saw demands from the likes of AMCU of up to 130%, we saw demands from NUM of 61%. Clearly these are very far apart numbers, is this as far apart as you’ve seen it in the South African labour sector?

JOE MOTHIBI: Without a doubt, certainly in recent memory. What concerns me most is this probably is an indication or symptom of the instability which is actually occurring within the federation of COSATU and the weakness that is perceived by unions such as AMCU who then see a weakness and try and go in there and get a piece of the cake in terms of membership. Yes, but certainly it’s been quite stark indeed, the gap between what they each put on the table.

GEOFF CANDY: Now we’ve heard fairly strong words from the likes of AMCU and from NUM, Lesiba Seshoka telling Mineweb earlier last week that these demands or the offer by the companies was an insult, was a cause for provocation, Joseph Mathunjwa telling Mineweb that he probably wasn’t going to take it back to his members because it wasn’t very good.

Conflict mineral policy hurt miners – by Jonathan Cooper (Vancouver Sun – July 22, 2013)

July 22, 2013

http://www.vancouversun.com/index.html

‘Cure-all’ legislation that was meant to improve things, cost millions of jobs

Jonathan Cooper is vice-president of Macdonald Realty Group and has written this commentary as a concerned private citizen.

On July 1, 2010, the U.S. Congress passed the Dodd-Frank bill, a massive and complex piece of legislation which was designed to avoid a repeat of the 2008 housing bubble collapse and subsequent financial crisis. Buried in the bill’s 2,000-plus pages was Article 1502, the objective of which was considerably removed from the minutiae of credit-default swaps and mortgage finance.

Dodd-Frank Article 1502 (DF 1502) intended to prevent U.S. companies from being involved in the trade of “conflict minerals” in the Democratic Republic of Congo (DRC). As a result of strident lobbying by Hollywood celebrities and non-government agencies (NGO) like The Enough Project, Congress believed that eastern DRC’s immense mineral wealth was fuelling the civil war in that region, a war which has caused as many as five million deaths since its inception in 1998.

In the three years since its passage, DF 1502 has encouraged increased due diligence on the part of both multinationals and the DRC government. However, it has also become an object lesson in the unforeseen consequences of legislative intervention.

AngloGold poised to write down value of assets by up to $2.6bn – by James Wilson and Andrew England (Financial Times – July 15, 2013)

July 17, 2013

http://www.ft.com/home/us

London/Johannesburg – AngloGold Ashanti joined other goldminers in responding to the sharp fall in the price of the precious metal by writing down the value of assets by up to $2.6bn and curbing production plans.

The South African miner will take a writedown charge of $2.2bn-$2.6bn in its most recent quarter, which included the steepest one-day drop in the gold price in more than three decades.

Goldminers around the world have cut the value of their assets by billions of dollars in recent weeks. AngloGold, the third-largest producer by volume, joins rivals including Barrick and Newcrest in acknowledging the deterioration in prospects for the sector.

AngloGold would “tighten up on costs, overheads and capital”, said Srinivasan Venkatakrishnan, chief executive, after a $220 drop in the average quarterly gold price. Output this year would now be 4m-4.1m oz, AngloGold said, cutting previous guidance of 4.1m-4.4m oz.

The fall in the gold price has squeezed margins for miners, with South Africa’s Chamber of Mines on Monday warning that about 60 per cent of the nation’s gold mining operations are lossmaking at current prices as the sector enters critical wage talks.

South African health minister: Canada should join us to fight TB in mines – by Aaron Motoaledi (Globe and Mail – July 11, 2013)

July 12, 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.

As South Africa’s Minister for Health, it may be surprising that many of the meetings I will have during my visit to Canada this week are not with health officials or medical personnel, but with representatives from mining companies.

Our mining industry has recently been the subject of intense international and national media scrutiny due to industrial unrest. As government, we have placed a high premium on returning stability to the industry and our deputy president has been tasked with managing this process. It is important that we succeed because mining is one of the driving forces of the South African economy, contributing around 20 per cent of the country’s gross domestic product and being a major employer.

What is less well known, and so far has not been subject to the same degree of media attention, is the devastation caused to miners and their families by tuberculosis (TB). The disease, which was the number one killer of Canadians in the early 20th century, remains the leading cause of death in South Africa today. It is an airborne disease, spreading through the air when people who have it cough or sneeze, and is often fatal if left untreated.

South African gold output continues to fall – how much further? – by Lawrence Williams (Mineweb.com – July 12, 2013)

July 12, 2013

http://www.mineweb.com/

South Africa’s vitally important minerals sector saw further production falls in May with the once dominant gold sector declining by a further 14.6% year on year.

LONDON (MINEWEB) – How the mighty have fallen! Not so long ago South Africa dominated global gold output with the rest coming nowhere in comparison, but the country’s gold output has been on the decline since the 1970s.

It fell to fifth largest gold producer in 2012 when it was overtaken by Russia and on the latest output figures the country has drifted downwards towards being now only the world’s sixth largest gold producer, having been overtaken by Peru as well – however that is on production so far this year.

In yesterday’s publication of minerals output and revenues, Statistics South Africa noted that the country’s gold output fell again in May commenting that its ‘overall mining production decreased by 0.7% year-on-year in May.The largest negative growth rates were recorded for ‘other’ metallic minerals (-32.3%), diamonds (-19.7%) and gold (-14,6%). The main contributor to the 0.7% decrease was gold (contributing -2.4 percentage points). Manganese ore (contributing 1.5 percentage points) was a significant positive contributor.’

Companies Moving Slow on Conflict Minerals Rule – by Ben DiPietro (Wall Street Journal – July 11, 2013)

July 11, 2013

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

Two-thirds of respondents to a new survey say their companies are in the early stages or have not yet started compiling information needed to meet the requirements of the Securities and Exchange Commission’s conflict minerals reporting law that takes effect in May 2014.

One-third of the nearly 900 executives surveyed said they still are trying to figure out if the reporting requirement applies to their businesses, according to the survey released Wednesday by PwC. Less than 5% said their companies have gathered most of the required information from their suppliers and have begun assessing it.

The SEC law mandates companies disclose whether any of their products–including materials provided to them by suppliers–contain tantalum, tin, gold or tungsten that comes from the Republic of Congo region in Africa. The mining of these minerals is believed to be funding armed groups in the region allegedly responsible for labor and human rights abuses.

“I dont think we expected to see this level of companies saying they haven’t really done much yet,” Bobby Kipp, partner in PwC’s risk assurance practice, said. “But I think companies are beginning to realize they can’t wait forever.”

SA gold production plunges, total mining output down 0.7% – by Natasha Odendaal (MiningWeekly.com – July 11, 2013)

July 11, 2013

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

JOHANNESBURG (miningweekly.com) – Statistics South Africa (Stats SA) on Thursday said that mining output during May decreased 0.7%, after a 0.7% revised year-on-year improvement in April.

Gold production emerged as the highest contributor, at -2.4 percentage points, to the decline, while manganese ore, contributing 1.5 percentage points, was a significant positive contributor.

Investment bank Investec’s Kamilla Kaplan commented: “There was a continuation of the trend in gold production that has been in place for much of the last decade. Specifically, that production remained in contractionary territory”.

Gold output, which has been falling since May 2011, plunged 14.6% year-on-year during the month under review, compared with a 3% year-on-year decline reported in April. The gold sector remained a key mineral export, accounting for 8.8% of total export revenues in the first five months of this year.

“At the prevailing gold price, gold miners are already under pressure to sustain operations and will struggle to grant double-digit wage increases sought by the unions [in this year’s wage negotiations],” Kaplan pointed out.

Anglo American chief warns on S Africa mining talks – by Andrew England (Financial Times – July 10, 2013)

July 11, 2013

http://www.ft.com/home/us

Mark Cutifani, chief executive of Anglo American, warned on Wednesday that the wage negotiations beginning in South Africa’s mining sector will determine not only the future of the industry, but also the future of the continent’s largest economy.

Speaking to the Financial Times a day before gold miners open salary talks, Mr Cutifani said: “[I am] worried for South Africa, I’m worried for the industry and I’m worried for the people. We have got to get the balance right”.

The mining industry in South Africa is entering two-yearly wage negotiations as many companies are still recovering from a weeks of wildcat strikes last year. That unrest is estimated to have cost the industry more than R15bn ($1.5bn) in lost revenue, while some 50 people were killed in strike-related violence.

How the wage talks proceed is seen as a major test for the country’s fragile labour relations, with concerns that any further unrest could have a contagion effect on other sectors.

“The period we are in now is the most important period I’ve seen in my time here in the [South African] industry – it is so critical for the future of the industry and the future of the country,” said Mr Cutifani, who is also president of the South African Chamber of Mines.

AFRICA INVESTMENT-South African miners demand leap to “living wage” – by Ed Stoddard and Benon Oluka (Reuters India – July 10, 2013)

July 10, 2013

http://in.reuters.com/

JOHANNESBURG, July 10 (Reuters) – “A living wage” is the battle cry of South Africa’s Association of Mineworkers and Construction Union (AMCU) as it and rival unions plunge into pay talks this month with mining houses.

But what is a living wage for a South African miner? Finding a definition, no easy task, has become the goal of an increasingly militant labour force demanding pay increases ranging from 15 to 150 percent, which mining companies can ill afford as precious metals prices tumble and costs surge.

Wage negotiations in the gold sector kick off on Thursday. The issue is complicated by many variables and by the difficulty of defining fair pay for work that may often require only low levels of skill but is very tough and dangerous.

“It’s difficult to put a number on a living wage,” said Boitumelo Sethlatswe, a researcher at the South African Institute of Race Relations.

“It depends how many people are in your household, and are there people in your household with access to social grants such as for old age pensions and child support,” she said.