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Africa Mining

AFRICA INVESTMENT-South Africa labour strife creating vicious cycle – by Ed Stoddard (Reuters India – May 29, 2013)

http://in.reuters.com/

JOHANNESBURG – May 29 (Reuters) – Labour unrest in South Africa’s mines, which threatens to spread to bigger sectors like manufacturing, is plunging the economy into a vicious cycle that may spiral into stagflation, disinvestment and more social upheaval.

South Africa’s rand has lost 16 percent against the dollar so far in 2013 and hit new four-year lows this week, with mining worries triggering the latest sell-off – which picked up pace on Tuesday when data showed growth in Africa’s top economy slowed to a snail’s pace as manufacturing output shrank.

All of this is spooking investors and sowing the seeds of more social discontent, as data shows a strong correlation between the rand’s performance against the dollar and inflation, with a time-lag of nine months.

Inflation is currently just under six percent and will accelerate, with the biggest exchange-rate impact likely on food and fuel prices, which will hit working-class households hard.

But the full impact of the rand’s current weakness will only be fully felt nine months hence, after the next round of wage agreements in mining and other sectors have been hammered out.

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Shabangu announces gold, platinum rescue plan – by Idéle Esterhuizen (MiningWeekly.com – May 28, 2013)

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

JOHANNESBURG (miningweekly.com) – Mineral Resources Minister Susan Shabangu on Tuesday announced that her department would develop a rescue plan, aimed at placing South Africa’s wrecked platinum and gold sectors on a recovery path.

Delivering her department’s R1.39-billion Budget Vote in the National Assembly, she said Department of Mineral Resources (DMR) officials had been instructed to “urgently” look at a rescue plan for the gold and platinum sectors, focusing on supply- and demand-side interventions.

“The platinum and gold sectors, which are among the largest sectors of our mining industry in terms of employment, investment and revenue generation, are negatively affected by the persistent global economic environment, which has an adverse bearing on their long-term viability,” the Minister said.

Shabangu stated that South Africa’s recently concluded bilateral agreement with Russia, under which the countries agreed to cooperate on platinum group metals (PGMs) initiatives, would contribute to the creation of a suite of interventions necessary to stabilise the platinum industry.

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Kenya to form a mining corporation, says Balala – by Mwaniki Wahome ([Kenya]Daily Nation – May 26, 2013)

http://www.nation.co.ke/-/1148/1148/-/xvvu7uz/-/index.html

A national mining corporation will be formed to act as the investment arm of the government where joint venture with the private investors is involved. This is one of the recommendations in the envisaged mining Bill that is meant to spur growth in the industry.

This was disclosed as stakeholders got closer to striking a deal on contentious issues related to sharing the income realised from mining activities in the country.

Mining Cabinet Secretary, Mr Najib Balala, said after getting Cabinet approval, the public and other stakeholders’ views will be included before the proposed law is taken to Parliament for debate and adoption.

“The national mining corporation is a strategic vehicle through which the government will invest in the mining industry with the private sector,” said Mr Balala. An earlier recommendation was to form a mining authority, but the idea was shelved after it was found that it would not facilitate the commercial interests of the country in the mining industry.

Experts have faulted the current Mining Act, that was put in place by the British colonial regime for being rigid, hence stifling mineral exploration and, at the same time, failing to spell out how benefits of such wealth are to be shared especially with the communities where the resources are found.

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Africa could still benefit from resources boom – by Geoff Candy (Mineweb.com – May 28, 2013)

http://www.mineweb.com/

According to the African Economic Outlook 2013, while Africa failed to capitalise on the resource boom of the last decade, there still remains hope for growth.

GRONINGEN (MINEWEB) – While Africa failed to capitalise significantly on the resources boom of the last decade, there remains hope that agricultural, mining and energy resources could boost the continent’s economic growth in the future, says the African Economic Outlook 2013.

According to the report, produced annually by the African Development Bank,the OECD Development Centre, the Economic Commission for Africa (ECA) and the UN Development Programme (UNDP). “What has been holding back Africa is not the large share of its primary sector in itself, but the poor performance of this sector.”

That is not to say the continent has not benefitted at all from the boom in resource prices seen over the last ten years, indeed according to the report, Africa’s GDP grew by 64% between 2000 and 2011, of which, 35% was accounted for by natural resources – primarily fuelled by a tripling of prices for metals and fuels.

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Future mines will be technology driven, [South African] Minister tells union – by Martin Creamer (MiningWeekly.com – May 27, 2013)

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

JOHANNESBURG (miningweekly.com) – Technological innovations would drive the mines of the future, which would need to be run by young people with the appropriate skills, Minerals Minister Susan Shabangu told South Africa’s biggest mining union at the weekend.

Urging the central executive committee of the National Union of Mineworkers (NUM) to rise to the new challenge, Shabangu denigrated the current migrant labour system of recruitment as unsustainable, against the changed background of large numbers of unemployed young people now living on the doorsteps of many mines.

“The mines of the future will have to be modelled differently to those that have characterised this industry for the past 136 years. These mines will inevitably have to accommodate young people who will need to operate them, armed with the appropriate skills, technological knowledge and training.

“There’s no doubt that the mining industry of the future will be driven by technological innovations and research and development, and I’m sure NUM will rise to this challenge,” Shabangu said.

The headwinds from a fragile world economy had conspired to make the mining sector a difficult economic terrain, not just for workers and business, but also for government as regulator and policy maker.

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Well intentioned ‘blood mineral’ provision backfires – by Lauren Cook (Medill News Service/UPI.com – May 24, 2013)

http://www.upi.com/

A U.S. law that imposed an embargo on mineral trade used to finance Congolese armed groups has backfired, affecting the region’s poorest artisanal miners.

WASHINGTON, May 24 — A provision in the Dodd-Frank financial reform law aimed at reducing money to militia groups in the Democratic Republic of the Congo by imposing rules on buying minerals from the region has backfired, exacerbating and depriving at least 1 million subsistence miners of their livelihood, several experts told a congressional committee Tuesday.

“Dodd-Frank 1502, the conflict minerals provision … is a case study in how good intentions can go awry,” said David Aronson, panel member and editor of CongoResources.org. “The law imposed a de facto embargo on mineral production that impoverished the region’s million or so artisanal miners; it also drove the trade into the hands of militia and predatory Congolese army units.”

The original intent of the conflict mineral provision, or Section 1502, was to reduce financing opportunities for the militia groups in the Congo’s mineral market by establishing disclosure requirements for companies that use minerals like gold, wolframite, casserite, columbite-tantalite and their derivative metals (tin, tungsten and tantalum) to make their products.

The companies are required to report the particular mineral’s origin. If the material is determined to be from the DRC — or if its source is unknown — they must notify the Securities and Exchange Commission.

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Child Miners Speak: Key Findings on Children and Artisanal Mining in Kambove DRC – (World Vision – May 2013)

World Vision is a Christian relief, development and advocacy organisation dedicated to working with children, families and communities to overcome poverty and injustice. http://voices.worldvision.ca/home/

Executive Summary

Child labour is a highly complex problem interlinked with poverty, a lack of social services and alternative employment, education and health impacts, and exploitation. The challenge we have is to understand the specific circumstances and needs of working children and their families, in particular settings. From there, we can develop appropriate and effective solutions that address these circumstances and needs, and sustainably move children out of the worst forms of labour. Simplified calls to eradicate all child labour often ignore the complexity of the problem, the persistence of poverty, and the difficult choices children face.

Child miners in one community in the DRC’s southern Katanga province speak to this reality throughout this report. A key objective for the research was the direct participation by children. They themselves described the circumstances, impacts and drivers of their work as miners, as well as possible solutions to the challenges they face. This was then compared to, and supplemented by, parents, other community members, and mining stakeholders.

By listening carefully, we heard that:

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Children as young as 8 working in Congo copper mines in Democratic Republic of Congo – by Tanya Talaga (Toronto Star – May 24, 2013)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

World Vision has documented the voices of children kept out of school to work in a copper and cobalt artisanal mine in the southern Democratic Republic of Congo and has found that “this type of hard labour is robbing children of their childhood.”

Child labour in developing world garment factories is a tragic, known occurrence but a new report on children as young as eight toiling away in African mines sheds light on a forgotten group. World Vision, a Christian relief organization, documented the voices of children kept out of school in order to work in a copper and cobalt artisanal mine in the southern Democratic Republic of Congo.

The key goal of this project, entitled “Child Miners Speak,” was to build trust and talk specifically to children to ask them how they feel about working in the harsh conditions of the mines, said Harry Kits, World Vision’s senior policy adviser for economic justice.

“This type of hard labour is robbing children of their childhood,” Kits said in an interview Thursday.

After speaking with 50 children in Kambove, aged eight to 17, World Vision documented children ill with various infections from working in polluted water or being exposed to mercury or uranium.

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Conflict Minerals Law Is Heavy Burden On Business, House Republicans Argue – by Christina Wilkie (Huffington Post – May 22, 2013)


 

http://www.huffingtonpost.com/politics/

WASHINGTON — Republicans at a House subcommittee hearing this week objected to a 2010 law that targets conflict minerals from Central Africa, saying it places too many regulations on U.S. businesses and hasn’t accomplished enough since it went into effect.

“Some of us may pat ourselves on the back and say, ‘Well, we’re making sure we’re not using their minerals,’ but we’re only hurting the people of the Congo,” said Rep. Marlin Stutzman (R-Ind.), who called the law “a massive paperwork burden on U.S. companies.”

Profits from mining of lucrative minerals in the Democratic Republic of the Congo (DRC) have helped fund a brutal conflict between rebel militias and government troops that has claimed more than 5 million lives since 1998. For those who live in the conflict areas of eastern Congo, the threat of rape and mutilation is constant; both are used as weapons of war. In the isolated mining camps of the region, men and boys often work in debt bondage or outright slavery. Above ground, women and girls are even more vulnerable to the violence, and desperation forces many of them into the commercial sex trade.

The conflict minerals law originated with then-Sen. Sam Brownback, now the Republican governor of Kansas, who argued in 2008 that “with 1,500 people dying a day [in the Congo’s civil war], there is no room for turning a blind eye on this matter.” Bolstered by the support of United Nations experts and human rights groups, Brownback’s plan became law two years later, as Section 1502 of the Dodd-Frank financial reform legislation.

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Vale’s vale of tears in Mozambique (MSN Money Canada – May 22, 2013)

http://ca.msn.com/?rd=1&ucc=CA&dcc=CA&opt=0

Labor disruptions, flooding and infrastructure problems will mean a substantial reduction in coal exports.

Vale has announced a 30% reduction in its 2013 target for coal exports out of its Moatize mine in Mozambique. The target has been reduced from 4.9 million tonnes planned earlier to 3.4 million tonnes. The revision follows incidents of labor disruptions and heavy flooding, which rendered its railway line temporarily unusable. Infrastructural limitations in Mozambique continue to pose a challenge to Vale, hampering its ability to get the coal produced from pit to port.

The reduction in export volumes, combined with falling coking coal prices in the international market, will impact revenues negatively. However, since the coal division constitutes just 2% to 2.5% of the company’s total gross operating revenues, the overall impact is expected to be muted. On the other hand, the news exposes the fragility of Vale’s Mozambican business and the significant challenges it faces to diversify away from its iron ore business.

Infrastructure bottlenecks are the topmost concern of coal miners operating in Mozambique. Both the government and the private sector have been executing various projects to expand and build new railway lines and ports, but infrastructure will take time to reach satisfactory levels. In 2012, Vale had to cut down its initial export targets by half due to infrastructure issues.

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NUM seeks up to 60% wage hike from SA gold producers – by Idéle Esterhuizen (MiningWeekly.com – May 20, 2013)

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

JOHANNESBURG (miningweekly.com) – South Africa’s Chamber of Mines (CoM) on Monday confirmed the reciept of proposals by the the National Union of Mineworkers (NUM) regarding the revision of wages and conditions of employment of gold mining companies represented by the Chamber.

Newswire Reuters reported that NUM indicated that it would seek an entry-level minimum monthly wage of R7 000 for surface workers and R8 000 for underground workers in the gold mining industry.

The demand equates to a 49% increase for surface workers, who currently earn an entry-level wage of R4 700 and a 60% hike on the R5 000 underground worker wage.

CoM spokesperson Charmane Russell told Mining Weekly Online that the current minimums was for basic salaries, excluding benefits and allowances. Reuters also reported that NUM would seek a 15% wage hike for “all other wage categories”.

The CoM is representing AngloGold Ashanti, Gold Fields, Harmony, Sibanye Gold, Village Main Reef, Pan African Resources and Rand Uranium in the gold mining industry wage negotiations, which Russell said would get under way in early to mid-June.

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Ghana hopes to shield economy from African oil curse – by Matthew Mpoke Bigg and Kwasi Kpodo (Reuters India – Mary 21, 2013)

http://in.reuters.com/

ACCRA, May 21 (Reuters) – Oil brought riches to Nigeria but also ravaged its economy and fuelled corruption and conflict. Now nearby Ghana has begun production and wants to take the wealth but dodge the oil curse.

Ghana is used to resource riches: it is already the world’s number two cocoa producer and Africa’s second-largest gold miner. But there are signs it is struggling to manage the new oil money and some people are disappointed.

A budget deficit last year which soared to 12 percent of gross domestic product (GDP), nearly twice the targeted level, raised fears among economists of fiscal laxity, a classic symptom of the resource curse that often feeds corruption.

Investors are also watching the strengthening cedi currency . An inflation-adjusted rise due to an influx of petro-dollars can signal “Dutch disease”, where the competitiveness of farming and manufacturing is eroded, as in Holland in the 1960s.

“The government seems to be very much wary of the dangers of Dutch Disease,” central bank governor Henry Kofi Wampah said. “Oil will continue to attract attention but not at the expense of cocoa or gold.”

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Sherritt facing demands from activist as chairman Ian Delaney retires – by Peter Koven (National Post – May 8, 2013)

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

A turbulent period could be looming for Sherritt International Corp., as an activist investor is challenging the company just as its long-time chairman and figurehead retires.

Scott Leckie of Takota Asset Management is calling on Toronto-based Sherritt to buy back more stock and study a potential lawsuit against SNC-Lavalin Inc., which he believes is responsible for cost overruns and delays at the company’s Ambatovy nickel project. He said he took his complaints public after Sherritt ignored three private letters.

“[Sherritt CEO] David Pathe has said they’re in a position to respond to opportunities. To me that means they have excess capital above and beyond anything they’re going to need for the last bits and pieces of Ambatovy,” Mr. Leckie said in an interview.

Sherritt also quietly revealed in a filing that chairman Ian Delaney, 69, is retiring from the company and is not standing for re-election at the annual meeting later this month.

He has been Sherritt’s dominant personality since he seized control of it in a proxy fight in 1990, and his departure leaves a major gap. But it does not come as a shock; in late 2011, he passed the CEO job on to Mr. Pathe and said he was content with the state of the company.

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Lonmin South Africa workers strike, raising fears of unrest – by Joshua Nhlapo (Reuters U.S. – May 14, 2013)

http://www.reuters.com/

(Reuters) – South African workers at the world’s No. 3 platinum producer Lonmin (LONJ.J) (LMI.L) launched a wildcat strike on Tuesday, halting all mine operations and sparking fears of a return to the violence that rocked the industry last year.

As dusk fell, a strike leader told thousands of workers gathered at a stadium near Lonmin’s Marikana mine to return home and continue the strike on Wednesday. Workers told a Reuters reporter no one would show up for the night shift.

Activists also said they would go to shafts the next day to threaten those who showed up for work, using the Zulu word for “rat” to describe them. This follows a pattern of intimidation that has accompanied illegal strikes in South Africa.

The platinum belt towns of Rustenburg and Marikana, which saw violent strikes at Lonmin and other producers last year, are a flashpoint of labor strife, with tensions running high over looming job cuts and wage talks.

Aggravating the situation is a turf war between the Association of Mineworkers and Construction Union (AMCU) and the National Union of Mineworkers (NUM) – an ally of the ruling ANC that has lost many of its members to the more militant AMCU.

An NUM spokesman said Tuesday’s strike appeared to stem from anger over the killing of an AMCU member. A police statement said a 46-year-old man “alleged to be the regional organizer of AMCU” had been shot dead in a Rustenburg tavern on Saturday.

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Anglo American Platinum Announces Revised Proposals to Create a Sustainable, Competitive and Profitable Platinum Business – (All Africa.com – May 14, 2013)

http://allafrica.com/

Johannesburg — In January 2013, Anglo American Platinum Limited (“Anglo American Platinum” or “the Company”) announced its proposals to create a sustainable, competitive and profitable platinum business for the long term benefit of all its stakeholders.

Following the announcement of its proposals, Anglo American Platinum and its recognised unions agreed to suspend the section 189 consultations to allow for engagement to take place with the Department of Mineral Resources (DMR) and the unions.

At the request of the DMR, such engagement became a bilateral engagement between Anglo American Platinum and the DMR. The bilateral engagements with the DMR have now been completed. Anglo American Platinum has formulated revised proposals which remain focused on improving the profitability and sustainability of its business, while taking cognisance of the local and national socio economic challenges.

The Company’s review of the business was in response to its revised expectations for platinum demand growth and a number of structural challenges that have eroded profitability in recent years, including capital intensity, mine depths, lower ore grades, higher than inflation unit cost increases, jewellery demand elasticity and increasing secondary supply of platinum.

Anglo American Platinum’s revised proposals continue to address the objective of aligning the business with its expectations of long term demand and are an extension of the steps taken to reposition the business in recent years.

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