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Africa Mining

Mining in Zimbabwe: Where to from here? – by Arthur Mutambara (New Zimbabew – May 23, 2013)

http://www.newzimbabwe.com/index.aspx

Deputy Prime Minister Prof. Arthur G.O. Mutambara’s address to the chamber of Mines AGM at Nyamga on Developing and Managing the Mineral Wealth of Zimbabwe for Tomorrow

May 17, 2013

THE mining sector in Africa constitutes one of the largest industries in the world. Africa is the second biggest continent, with 30 million km² of land, which implies large quantities of resources.

For many African countries, mineral exploration and production constitute significant parts of their economies and remain keys to economic growth. The continent is richly endowed with mineral reserves and ranks first or second in quantity of world reserves of bauxite, cobalt, industrial diamond, phosphate rock, platinum-group metals (PGM), vermiculite, and zirconium. Gold extraction is the key driver of Africa’s mining activities.

However, in spite of this rich mineralization, African countries are still walloping in poverty. The primary problem has been the racist and colonial natural resource laws in Africa which empower the investor at the expense of the citizenry who are the bona fide owners of the resource. Based on this flawed framework, most of the mining deals and activities on the continent have been opaque and detrimental to Africans.

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Glencore fires 1,000 workers over wildcat strikes in S.Africa – by by Agnieszka Flak (Reuters U.K. – June 3, 2013)

http://uk.reuters.com/

JOHANNESBURG – (Reuters) – Glencore Xstrata Plc sacked 1,000 workers across three of its chrome mines in South Africa for going on illegal strike last week, bringing those operations to a standstill, the company said on Monday.

The dispute at the mines near Steelpoort, northeast of Johannesburg in Limpopo province, added to long-running friction in the mining industry that has caused production to slow, raised concerns about Africa’s largest economy and sent the rand to fresh four-year lows.

Chromium is a raw material used to produce ferrochrome, a key ingredient to make stainless steel. “About 1,000 of the employees who have participated in the unprotected (illegal) strike have been dismissed,” said Christopher Tsatsawane, a spokesman for the company’s chrome operations.

The strike, which started last Tuesday, was continuing, but supplies to customers were not yet affected, he added. The workers have until Tuesday to appeal the dismissals.

South Africa has well-defined processes for launching strikes and those who fail to get formal approval can be sacked.

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President Zuma draws the line on wildcat strikes – by Martin Creamer (MiningWeekly.com – May 30, 2013)

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

PRETORIA (miningweekly.com) – President Jacob Zuma on Thursday drew the line on wildcat strikes, implicitly declaring unequivocal zero tolerance on future industrial action that is outside of the law.

Announcing a new programme of action for the troubled South African mining sector, President Zuma said that Deputy President Kgalema Motlanthe and three Cabinet Ministers had been tasked with restoring stability and certainty to the mining sector, which he described as an essential “cornerstone of the South African economy”.

He was emphatic that all future strikes needed to be undertaken within what he described as South Africa’s “excellent” legal framework and the Constitution (see also attached video).

“You cannot allow the unions to engage in wildcat strikes,” he said in response to global news agency Reuters’ question on dealing with what was described as “the turf war” between the emerging Association of Mineworkers and Construction Union (AMCU) and the long-standing National Union of Mineworkers.

Leeway had recently been given to AMCU on the grounds of its inexperience.

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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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Business in the Democratic Republic of Congo: Murky minerals (The Economist – May 18, 2013)

http://www.economist.com/

How bad is it?

CAPE TOWN AND KINSHASA – THE business climate in Congo “is disgusting”, says an adviser to the government in Kinshasa. Any casual visitor has probably noticed. Traffic police stop cars for no reason, force their way in and refuse to leave until paid off. Tax agents arrive at company offices with seven- and eight-figure demands that—of course—can be negotiated down.

Small wonder this central African nation’s biggest business—digging in the dirt to extract precious minerals—is so dirty. An expert panel led by Kofi Annan, a former UN secretary-general, looked at five deals struck between 2010 and 2012, and compared the sums for which government-owned mines were sold with independent assessments of their value.

It found a gap of $1.36 billion, double the state’s annual budget for health and education. And these deals are just a small subset of all the bargains struck, says the report, which Mr Annan presented in Cape Town, South Africa, on May 10th.

The report highlights some puzzling details. For instance ENRC, a London-listed Kazakh mining firm, waived its rights to buy out a stake in a mining enterprise owned by Gécamines, Congo’s state miner, only to acquire it for $75m from a company owned by Dan Gertler, an Israeli businessman, which had paid $15m for it just months earlier.

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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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