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Africa Mining

Platinum market records 375 000 oz deficit in 2012 – by Idéle Esterhuizen (MiningWeekly.com – May 13, 2013)

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

JOHANNESBURG (miningweekly.com) – The global platinum market experienced a deficit of 375 000 oz in 2012, owing to a steep decline in output from South Africa, platinum group metals authority Johnson Matthey’s ‘Platinum 2013’ report has revealed.

Published on Monday, the report found that primary platinum supply fell by 13% to 5.64-million ounces, its lowest level in twelve years. Total platinum demand for the year was down by 0.6% to 8.05-million ounces, while recycled platinum came to 2.03-million ounces, marginally less than in 2011.

Platinum recycling from end-of-life autocatalysts fell in Europe and North America, while the price of platinum averaged $1 552/oz in 2012, $169 lower than in 2011, prompting collectors to hoard stock, while awaiting better price opportunities.

However, the decline in recovery from this source was partly offset by greater recycling of platinum jewellery scrap in China. Platinum shipments by South African producers slumped by 16% to 4.1-million ounces during the year under review, with at least 750 000 oz of production lost to strikes, safety stoppages and the closure of some marginal mining operations.

Meanwhile, gross demand for platinum in autocatalysts rose by 1.7% to 3.24-million ounces.

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A fair [resource] deal for Africans – by Peter Eigen (National Post – May 13, 2013)

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

Peter Eigen is founder and chair of the Advisory Council, Transparency International, founding chairman of the Extractive Industries Transparency Initiative, and a member of the Africa Progress Panel.

Across Africa, an extraordinary natural resources boom is underway. Energy and mineral extraction is driving economic growth on the continent. New exploration, new discoveries and no let-up in global demand mean Africa has a unique opportunity to deliver prosperity and opportunity for its citizens.

As you would expect from a country at the centre of the world’s mining industry, Canada is playing a major role. Eight of the countries where Canadian mining assets exceed $1-billion are in Africa. But this also places a special responsibility on Canada to ensure Africa benefits as well.

For while Africa’s economic growth at an average 5% per year for the past decade has been impressive, this success has not been translated into improvements in the lives of its citizens. African countries are not getting a fair share of the revenues from the mining activities within their borders. Weak African governance can mean the money which is paid is not used effectively to improve public services or create employment.

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Amplats to slash platinum production, 6,000 jobs, in South Africa – by Geoffrey York (Globe and Mail – May 11, 2013)

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 world’s biggest platinum producer, Anglo American Platinum, has announced plans to cut 6,000 jobs from its South African mines, triggering fears of a major battle with trade unions as the platinum sector struggles with mounting losses.

The announcement was immediately greeted by furious criticism from South Africa’s powerful unions, raising the spectre of another season of violent clashes in a country where dozens of workers were killed last year.

But the company, known as Amplats, insisted that it had to reduce production in its platinum mines after suffering heavy losses last year. One study estimated that 70 per cent of all South African platinum mines were operating at a loss last year because of rising costs, oversupply and falling prices.

Amplats had originally intended to cut 14,000 jobs from a work force of about 56,000 employees. But when its plan was first mentioned in January, the South African government was outraged, accusing the company of behaving like “a child.”

The company agreed to suspend the plan while it discussed the issue with the government, but on Friday it announced that it would still go ahead with deep cuts to its production and job levels.

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African states should own half of new mining ventures, says Mohohlo – by Paul Vecchiatto (South Africa Business Day Live – May 10, 2013)

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

AFRICAN governments should own at least a 50% stake in any new mining venture in order to ensure the country receives more of the revenue that flows from a project than the mining company receives.

This is a recommendation of Linah Mohohlo, governor of Botswana’s central bank and a member of the Africa Progress Panel.

Speaking at Friday’s launch of the panel’s Africa Progress Report 2013, Ms Mohohlo pushed the point that only if there were transparency in monetary flows could there be real transparency on how mining companies operate on the continent.

However, Ms Mohohlo stressed that her recommendation was not a call for nationalisation in any way.

“What it is, it is a recommendation. As a former central banker I believe that only central banks can and should handle the revenue flows that stem from mining.

“The country, or the government, must receive more of the revenue flows out of a project than the company does,” she said. Ms Mohohlo said governments had to use the minimum shareholding of 50%, plus a sound tax regime that included clear guidelines on collection and definite dates for the end of the tax holidays often granted for a project to start.

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Tensions high as Amplats to unveil South Africa job cuts plan – by Ed Stoddart (Reuters U.S. – May 9, 2013)

http://www.reuters.com/

(Reuters) – Anglo American’s (AAL.L) platinum arm, under pressure from South Africa’s government, could announce a restructuring plan on Thursday or Friday that will sharply scale back job losses as it tries to balance out cost cuts and the threat of labor unrest.

Anglo American Platinum (AMSJ.J) had planned to slash 14,000 jobs and mothball two mines to return to profit but industry sources have told Reuters that the final plan would be pared back, with as few as 5,000 jobs cut.

Militant workers have signaled they will launch protest strikes even if the job cuts fall far short of the initial target. Social tensions are running high after violence rooted in a labor turf war killed more than 50 people last year and sparked illegal strikes that hit production.

For Amplats, reining in costs and cutting production to such an extent that it lifts the price of platinum, used for emissions-capping catalytic converters in automobiles, is absolutely crucial after it fell into a loss last year.

“From the point of view of Amplats itself, both numbers will be critical, how many ounces will you produce, but also how many people, because that impacts on the cost base,” said Alison Turner, an analyst at Panmure Gordon.

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Darfur gold mine collapse kills 100, traps rescuers (Japan Times – May 4, 2013)

http://www.japantimes.co.jp/

KHARTOUM – Around 100 miners are estimated to have died inside a collapsed gold mine in Sudan’s Darfur region, and nine of the rescuers trying to free them have become trapped as well, a miner said Friday.

“Nine of the rescue team disappeared when the land collapsed around them” on Thursday said the miner, who had visited the scene.

The unlicensed desert gold mine in the Jebel Amir district, more than 200 km northwest of El-Fasher, the capital of North Darfur state, began to cave in Monday.

The stench of death is now seeping out of the baked earth, the miner said. “Yesterday (Thursday) eight bodies have been found and still they are looking for the others,” he said. “According to a count by people working in the mine, the number of people inside is more than 100.”

On Thursday, the Jebel Amir district chief, Haroun al-Hassan, said “the number of people who died is more than 60,” but added it was unclear whether anyone might still be alive.

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Cobalt firms on DRC ore uncertainty, tight supply – by Harpreet Bhal (Reuters U.S. – May 3, 2013)

http://www.reuters.com/

LONDON, May 3 (Reuters) – Uncertainty about the availability of cobalt concentrates from the Democratic Republic of Congo (DRC), the world’s largest ore producer, is pushing up prices for the metal at a time the market is already tight due to low supplies, traders said.

The price of high grade cobalt has risen steadily since the beginning of the year after hitting a 9-year low of $10 a pound in November and now stands at around $13.50/lb, up 30 percent from the lows and higher than $12/lb in March. .

Traders said the market was already tight, as producers were running low on stocks, when it emerged that the DRC planned to ban the export of raw materials of the metal used in batteries and in alloys for jet engines and gas turbines.

The African country in mid April banned exports of copper and cobalt concentrates to encourage miners to process and refine the red metal within its borders, according to an order from the Mines Ministry.

The order, seen by Reuters and dated April 5, provides companies 90 days to clear stocks before the ban is enforced, but a day later the governor of Katanga, Congo’s sole copper and cobalt mining province, said he would not enforce a new ban.

“Prices are nudging up due to the uncertainty and we’re seeing a bit of buying ahead of the ban coming into force in a market that is already tight,” said one physical trader.

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Sick miners ask Anglo for details of defence – by Ernest Mabuza (Business Day Live [South Africa] – April 29, 2013)

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

THE long-awaited hearing in which 10 former Anglo miners with silicosis and silico-tuberculosis are seeking compensation began on Friday with an application to compel Anglo American to provide more details of its defence.

The Legal Resources Centre, Legal Aid SA and London-based Leigh Day have been involved in the groundbreaking class action suit since 2004. The two sides agreed last year to go to arbitration.

President Steyn, at which the 10 miners worked, was Anglo’s largest mine in the Free State in the 50-year period up to 1998. Four of the claims are brought by the next of kin of miners who have passed away since the litigation began.

The 10 plaintiffs are part of a group of 18 from the Free State, Eastern Cape and Lesotho who are claiming compensation for silicosis and silico-tuberculosis they argue were contracted when they worked at mines owned by Anglo.

Their claim is that Anglo American SA, the head office company of the Anglo group, was negligently controlled and wrongly advised the mines about dust control measures and silicosis. The former miners are seeking compensation for pain and suffering and for lost earnings and medical expenses.

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Kinross Gold sees US$2.7-billion initial capital cost for Tasiast mine – by Peter Koven (National Post – April 30, 2013)

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

TORONTO – After two and a half years of work at its troubled Tasiast project, Kinross Gold Corp. still has a lot to prove.

On Monday, Kinross released a long-awaited pre-feasibility study on the proposed expansion of Mauritania-based Tasiast. The company called the results “encouraging” and elected to move ahead with a full feasibility study. But analysts and investors were far from thrilled.

Put simply, the study results did not confirm that the project would generate a strong return on investment. Instead, they confirmed a lot of work still needs to be done.

The initial cost to get Tasiast up and running would be US$2.7-billion, according to the study. While the proposed mine would produce roughly 830,000 ounces of gold a year at low costs, the estimated net present value is only US$1.1-billion at a gold price of US$1,500 an ounce, while the internal rate of return (IRR) is a meagre 11%.

That is a low IRR for such a large and high-risk project, especially given that the assumed gold price is higher than the current one. At lower gold prices, analysts estimated that the numbers get significantly weaker.

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Mugabe threatens expropriation of foreign mining assets – by Geoffrey York ((Globe and Mail – April 25, 2013)

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 — Just when Zimbabwe’s battered economy seemed to be turning a corner, President Robert Mugabe has fired a new salvo at foreign investors, threatening to expropriate the assets of Canadian gold miners and other companies.

With its gold and platinum mines and vast diamond fields, Zimbabwe has the potential to be one of Africa’s fastest-growing economies. But it has been severely damaged by a decade of political turmoil, including the seizure of white-owned farms and a controversial “indigenization” campaign to compel foreign companies to sell majority stakes to Zimbabweans.

Now, the government is reported to be drafting a new amendment, allowing it to take controlling stakes in foreign mining assets without paying any compensation.

The amendment, if approved, could affect companies such as Toronto-based Caledonia Mining Corp., which operates the Blanket gold mine, one of the more successful mines in the country. It could jeopardize the recent strong recovery in Zimbabwe’s gold sector, which increased its revenue by 19 per cent last year.

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Vale’s former iron man sets sights on Africa – by Silvia Antonioli and Clara Ferreira-Marques (Reuters U.K. – April 23, 2013)

http://uk.reuters.com/

LONDON (Reuters) – At the helm of Brazil’s Vale for a decade, Roger Agnelli turned the conservative iron ore producer into a global heavyweight. Now, he is back in the game.

The 53-year-old, ousted from Vale two years ago, is betting on the world’s hunger for resources, Africa’s potential and his team’s ability to operate where others fear to tread.

“You have a lot of financial guys looking to invest, looking for opportunities,” said the former banker, sitting back in the library of a smart central London hotel. “But guys who go into the middle of the forest, into the middle of the desert to implement a project, those are still scarce.”

Agnelli set up AGN Participacoes, a holding company, shortly after leaving Vale, to invest in biofuel. Last July, he teamed up with billionaire Andre Esteves’ investment bank BTG Pactual to set up B&A Mineracao, a mining group focused on fertiliser, iron ore and copper, in Latin America and Africa.

That $520 million venture – one of a handful of investment ventures set up by an outgoing generation of mining executives – has already put its cash to use, investing $160 million in fertiliser projects and copper.

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China’s President Xi Jinping, a corrupt autocrat’s best friend – by Robert I. Rotberg (National Post – April 22, 2013)

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

African autocrats absolutely adore China’s President Xi Jinping. At a meeting last month with 13 prominent African leaders in Durban, South Africa, Equatorial Guinea’s hard-fisted President Teodoro Obiang Nguema Mbasogo led the others in lavishing praise on China. The front page of the weekend China Daily for March 29 trumpeted their obsequieousness and China-Africa friendship.

None of Africa’s despots dare bite the hand that has fed so well, and so consistently. While Chinese support keeps rolling in, these leaders enrich themselves and their inner circles while their people go without.

China directly supports the leaders and enables their continued internal tyrannies by refusing to “interfere” in local politics, by willfully ignoring well-documented trails of human rights violations, by turning a blind eye to egregious corrupt practices, and by protecting presidents such as Zimbabwae’s Robert Mugabe and Sudan’s Omar al-Bashir when the UN or other regional organizations threaten to investigate their regimes.

China has also helped to shield Bashir from the consequences of his indictment for war crimes by the International Criminal Court.

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Mining sector needs new inspiration – Cutifani – by Geoff Candy (Mineweb.com – April 22, 2013)

http://www.mineweb.com/

In his first speech as CEO of Anglo American, Mark Cutifani lays out a number of the challenges facing his new charge and the rest of the mining sector.

GRONINGEN (MINEWEB) – New Anglo American CEO, Mark Cutifani, is not known for pulling his punches. And, his first speech as Anglo American CEO was no different.

Speaking at the group’s Annual General Meeting, Cutifani told Anglo American shareholders that with the group’s share price languishing compared to its peers, business as usual was no longer acceptable.

“As a major diversified company, we need a more focused articulation of the value proposition that will guide our strategic positioning,” Cutifani said, before adding that Anglo American (and the rest of the sector) need to look beyond the mining industry for inspiration.

“To be brutally frank, our industry lags the petroleum, manufacturing and aviation sectors and other more progressive and innovative heavy industry players in terms of operating practices – there is no reason why our industry should not use the best from all of these ‘restless innovators’.”

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Students mining change – by Matt Prepost (Winnipeg Free Press – April 22, 2013)

http://www.winnipegfreepress.com/

GIVING up her computer would be difficult, but Anna MacDonald would quickly toss her cellphone if it meant an end to years of war in Africa over the mineral that helps keep her plugged into the 21st century.

MacDonald will be one of hundreds of Winnipeg high school students taking part in a noon-hour rally at the legislature today, protesting the practices of Canadian mining companies in the Democratic Republic of Congo and calling on the province to pressure Ottawa into legislating change.

“The issue isn’t that we have to get rid of our phones and everything will be fine, this issue is about holding these companies accountable,” said MacDonald, a Grade 12 student in the Met School Justice League at Garden City Collegiate, which is organizing the rally.

“I could probably give up my cellphone, but we can fight this without giving up ourselves. We can use phones and computers to fight this conflict and use them as weapons of change.” In the last decade, Congo has found itself at the epicentre of the trade in the ore coltan, as mining companies around the world sweep in to capitalize on the country’s vast reserves — estimated to be around 64 per cent of the world’s supply. Coltan is mined and stripped down into tantalum, which is needed for everyday electronics, from cellphones to computers to video-game consoles.

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Amplats, Minas Rio expected to be Cutifani’s biggest headaches at Anglo – by Leandi Kolver (April 19, 2013)

http://www.miningweekly.com/

Analysts in the South African mining industry believe that new Anglo American CEO Mark Cutifani’s biggest challenge might be platinum mining company Anglo American Platinum (Amplats), based on the recent volatility of the sector, plagued by violent strikes and uncertainty.

The significantly overbudget Minas Rio iron-ore project, in Brazil, is a close second. Cutifani replaced former Anglo American CEO Cynthia Carrol on April 3. Mining Weekly reported in January that Liberium Capital analyst Ben Davis had said that the challenges arising from the “structurally defunct” Amplats and the continuing capital cost increases at the Minas Rio project had no easy solutions.

South Africa’s Public Investment Corporation said that Anglo American’s “main issues” centred on capital allocation, project management and operational challenges, which, taking Cutifani’s experience into consideration, could be dealt with.

Amplats posted its first loss last year, with the loss partly stemming from flat metal prices and cost increases of more than 15% a year and from illegal strikes rooted in a turf war between members of the Association of Mineworkers and Construction Union and the National Union of Mineworkers.

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