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Africa Mining

BRICS chafe under charge of ‘new imperialists’ in Africa – by Pascal Fletcher (Reuters India – March 26, 2013)

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DURBAN, South Africa – (Reuters) – “BRICS, Don’t Carve Africa” reads a banner in a church hall in downtown Durban where civil society activists have gathered to cast a critical eye at a summit of five global emerging powers.

The slogan evokes the 19th Century conference in Berlin where the predominant European colonial states carved up the African continent in a scramble historians see as epitomising the brash exploitative capitalism of the time.

Decades after Africans threw off the colonial yoke, it is the turn of the blossoming BRICS group of Brazil, Russia, China, India and South Africa to find their motives coming under scrutiny as they proclaim an altruistic-sounding “partnership for development, integration and industrialization” with Africa.

Led by that giant of the emerging powers, China, the BRICS are now Africa’s largest trading partners and its biggest new group of investors. BRICS-Africa trade is seen eclipsing $500 billion by 2015, with China taking the lion’s share of 60 percent of this, according to Standard Bank.

BRICS leaders persist in presenting their group – which represents more than 40 percent of the world’s population and one fifth of global gross domestic product – in the warm and fuzzy framework of benevolent South-South cooperation, an essential counterweight to the ‘old’ West and a better partner for the poor masses of the developing world.

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NDP to introduce federal bill on conflict minerals – by Iain Marlow (Globe and Mail – March 25, 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.

The NDP is about to reintroduce legislation designed to ensure Canadian companies are not using conflict minerals in their supply chain – and that consumers can be certain their smartphones and other electronics are free of minerals fuelling violence in the Democratic Republic of the Congo.

On Tuesday, NDP foreign affairs critic Paul Dewar will again table legislation that aims to have corporations and subsidiaries operating in Canada report annually to the government about their supply chains. This would inject transparency and due diligence into an industry where complicated global supply chains (that stretch into lawless conflict zones) and myriad smelters (often operating with little regulatory oversight) have allowed some multinationals to claim ignorance of ties to one of the world’s worst conflicts, in which an estimated five million have lost their lives.

If Mr. Dewar succeeds in gaining momentum for the bill – after having a previous conflict minerals bill die on the order paper ahead of the 2011 federal election – the use of minerals such as “gold, cassiterite, wolframite and coltan and their derivatives, such as tin, tungsten and tantalum” from countries in the Great Lakes region of Africa could earn corporations the type of consumer scorn previously heaped on purveyors of “blood diamonds” and users of sweatshops.

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BSG Says Guinea Preparing to Strip Rights to Vale Mine Venture – by Jesse Riseborough (Business Week – March 25, 2013)

http://www.businessweek.com/

BSG Resources Ltd., a company controlled by Israeli billionaire Beny Steinmetz, said the government of Guinea is preparing to strip its joint venture with Vale SA (VALE5) of the rights to its mining assets in the country.

A new government agency, Comite Technique de Revue des Titres et Conventions Miniers, or CTRTCM, has “been entrusted with the task of preparing the expropriation of VBG’s assets,” closely held BSG said today in a statement, referring to its venture with Vale, the world’s biggest exporter of iron ore.

The venture is planning a $10 billion iron ore mine in the country at Simandou and the dispute with the government comes amid a review into the agreements signed with mining companies. The company’s president was recently barred from entering the country “on baseless grounds of domestic security,” it said today. “The denial of entry is only the latest of a number of illegal acts by the Government of Guinea,” including the creation of CTRTCM, BSG said.

It’s “the latest example of an illegitimate government resorting to harassment to make it impossible for BSG Resources, and its VBG joint venture, to exercise their contractual rights legitimately awarded in Guinea,” the company said.

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Governor says attack hurts image of Congo mining hub – by Bienvenu Bakumanya and Clara Ferreira-Marques (Reuters India – March 25, 2013)

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KINSHASA/LONDON, March 25 (Reuters) – An attack by some 300 rebels on the Democratic Republic of Congo’s second city, Lubumbashi, has tarnished the image of the country’s mining hub but has not interrupted operations, the region’s governor said on Monday.

Lubumbashi and the wider southern province of Katanga have been seen as among the safest in a country riven by armed conflict. Billions of dollars of investment have poured in to tap its copper, cobalt and tin deposits following years of underinvestment.

But the region also has some of Congo’s poorest pockets, and rebel fighters feeding off local grievances and decades-old secessionist sentiment have run increasingly audacious forays outside their heartland in the region’s northeast.

The government said on Sunday around 300 Mai Mai Kata Katanga separatists attacked the city armed mainly with bows and arrows and machetes. It said troops killed about 15 of them while nearly 250 others surrendered.

A witness to Saturday’s attack said the group had attempted to hoist the flag of Katanga’s short-lived 1960s-era independent republic before members of the army’s elite Republican Guard launched a counter-attack.

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RPT-INSIGHT-“Triangle of death” looms over Congo’s mining heartlands – by Jonny Hogg and Clara Ferreira-Marques (Reuters India – March 25, 2013)

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LIKASI, Democratic Republic of Congo, Feb 19 (Reuters) – T rucks of workers and building materials hurtle through the mining town of Likasi at the heart of Congo’s copper producing south, evidence of the billions being poured into the region after years of war and underinvestment.

But rebel fighters feeding off local grievances and secessionist sentiment are threatening to resurrect the spectre of a southern breakaway, in a fresh challenge to the stability and integrity of the Democratic Republic of Congo.

The rebels, estimated to number anything from a few hundred to a few thousand, armed with bows, arrows and assault rifles, could re-open decades-old political fissures in Katanga, Congo’s economic engine but also its most independent-minded province.

Their forays south, away from their stronghold in the province’s north and towards Katanga’s mining heart, raise the stakes in a region that is also a power base for a government already stretched by a separate insurgency in the east.

Medecins Sans Frontieres (MSF) is one of a handful of aid organisations in Katanga operating in the vast and virtually roadless northern area known to locals as the “Triangle of Death” in reference to atrocities including massacres, rape and cannibalism carried out by the rebels, known as the Mai Mai.

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Anglo American is a South African company, Minerals Minister reminds new CEO – by Martin Creamer (MiningWeekly.com – March 22, 2013)

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

“Mark, this Anglo American plc, it’s ours. It’s a South African company,” Mineral Resources Minister Susan Shabangu reminded incoming Anglo American CEO Mark Cutifani at a Chamber of Mines function in his honour.

“We hope you’ll make sure that it remains South African,” the Minister added. Her comments follow those of African National Congress (ANC) secretary-general Gwede Mantashe, who last month emphasised the South African roots of Anglo American and lamented reference to it as a British company.

Mantashe contended that allowing companies to migrate to global stock exchanges had impacted negatively on South Africa’s own exchange and denied the country part of its economic heritage.

Shabangu also raised the point of regret by some of Anglo American being allowed to domicile in a London listing: “When we speak, sometimes people say that we made a mistake to allow Anglo to list in London. Well, because it has happened, we’re not going to pursue that now, but what we want to see is Anglo continuing to brand itself as a South African company,” she said, adding that, with the appointment of Cutifani, the country was positive that would happen.

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Anglo CEO’s plan to reignite mining – by Rob Rose (South Africa – Business Day – March 17, 2013)

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

MARK Cutifani, who will step into the CEO’s seat at Anglo American in the next few weeks, said that, by confronting seven issues that spook foreign investors, South Africa’s mining industry can “turn the dial” and begin growing again.

Speaking at a dinner in Parktown, Johannesburg, on Thursday night, organised by the Chamber of Mines and attended by Mineral Resources Minister Susan Shabangu, Mr Cutifani said 2013 represents a “starting point for a new future for the mining industry”.

South Africa’s mining industry has flagged in recent years, battling a stream of bad news. This included the Marikana shootings last year and former ANC Youth League leader Julius Malema’s campaign for mines to be nationalised.

It meant that while the JSE’s all-share index climbed 60% from 2008 onwards, South Africa’s mining firms did not grow at all. Mr Cutifani pointed out that “in real terms, when you take into account inflation, that means we’ve destroyed about 30% value”.

Mr Cutifani, an Australian mining engineer, will take charge of Anglo American at its London head office. He has successfully led AngloGold Ashanti for the last six years. During that time, the company was the best-performing miner in terms of share-price growth and return on capital.

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State intervention risking return of 70s-type resource sterilisation – by Martin Creamer (MiningWeekly.com – March 14, 2013)

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

JOHANNESBURG (miningweekly.com) – Current African policies intended to capture a greater share of the resource rent through increased State intervention run the risk of bringing back the resource sterilisation of the 1970s, mining risk analysis company Eunomix warns.

The resource sterilisation risk, says the company, which specialises in de-risking resources and commodities projects in Africa – a destination of ever greater global strategic value – is already becoming evident in many countries facing mining disinvestment.

Headed by MD Claude Baissac, Eunomix has just completed a major study on African economic advancement through resource development.

Based on World Bank data, the study analyses the role of mining and oil and gas in Africa’s economic growth between 1970 and 2010 and tracks the relationship between economic growth, resource rent and commodity prices.

It says that Africa’s post-2000 “boom” was rooted in the private sector-friendly policies implemented in the 1990s and that, as in the era of 1970s sterilisation, the current rent-seeking State intervention is arriving post-super-cycle, and is as likely to produce the opposite of its intended effects.

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Commodities on the Rise – by Dambisa Moyo (Project Syndicate – March 14, 2013)

http://www.project-syndicate.org/

Dambisa Moyo is the author, most recently, of Winner Take All: China’s Race for Resources and What it Means for the World.

SEOUL – The commodity super-cycle – in which commodity prices reach ever-higher highs, and fall only to higher lows – is not over. Despite the euphoria around shale gas – indeed, despite weak global growth – commodity prices have risen by as much as 150% in the aftermath of the financial crisis. In the medium term, this trend will continue to pose an inflation risk and undermine living standards worldwide.

For starters, there is the convergence argument. As China grows, its increasing size, wealth, and urbanization will continue to stoke demand for energy, grains, minerals, and other resources.

For example, the US consumes more than nine times as much oil as China on a per capita basis. As more of China’s population converges to Western standards of consumption, demand for commodities – and thus their prices – will remain on an upward trajectory.

Of course, not all commodities are equal. For example, although the case for copper seems straightforward, given that it is a key input for wiring, electronics, and indoor plumbing, a strong bid for iron is not as obvious, given the Chinese infrastructure boom that already has occurred in the last two decades.

Worst-case estimates have China’s real GDP growing at around 7% per year over the next decade. Meanwhile, the supply of most commodities is forecast to grow by no more than 2% annually in real terms.

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Mechanisation still far off for South Africa’s platinum mines – by Clara Ferreira-Marques and Sherilee Lakmidas (Reuters India – March 14, 2013)

http://in.reuters.com/

LONDON/MARIKANA, South Africa, March 14 (Reuters) – Rising wage costs and strikes have revived the arguments in favour of automating South Africa’s loss-making platinum mines, but weak prices for the metal and tough conditions underground mean mechanisation remains a distant prospect.

The rest of the mining industry, from copper to coal, has been transformed in recent decades by automation, unmanned trucks and remotely controlled equipment.

That is in large part thanks to geology. In the cramped mines where platinum is found, the rock is still drilled, blasted and cleared by men. The platinum seams are damp, sweltering and claustrophobic places to work: men often drill in shafts so constricted that it is like mining under a table.

Mines are evacuated for hours a day so blasting can take place – a major inefficiency for operations with the thinnest of profit margins.

But mechanising platinum would be costly and the mining companies need to be convinced it is worth it. “They would need to believe that any investment in platinum mechanisation would significantly drive them down the cost curve,” said analyst Alison Turner at Panmure Gordon.

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Gold Fields chief Holland isn’t afraid to get out front – by Geoffrey York (Globe and Mail – March 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.

JOHANNESBURG — When the wave of violent strikes erupted across the country, Nick Holland’s security advisers cautioned him to stay away from his gold mines. He went anyway – and soon found himself facing an army of 5 ,000 angry miners marching across the fields, waving machetes and sticks.

“I always like to be at the front,” says Mr. Holland, chief executive officer of Gold Fields Ltd., the world’s fourth-biggest gold producer. “But it gave me a really scary feeling in the pit of my stomach, that we were about to have something blow up.”

Gold Fields survived the wildcat strikes that left dozens dead at other mines in South Africa last year, but now Mr. Holland faces an even greater challenge: How to save his company from a national mining-industry crisis of rising costs, deteriorating production, high political risk, labour pressures and the threat of new taxes.

It’s a daunting moment for South Africa’s gold industry, the biggest in the world for nearly a century but now in steady decline. At a time when innovation is crucial, Mr. Holland has become a pioneer, orchestrating a bold move to divide Johannesburg-based Gold Fields by spinning off its older South African mines into a new company, leaving its most modern and international mines in the hands of Gold Fields itself.

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Anglo American SA silicosis liability could be largest yet – lawyers – by Natalie Greve (MiningWeekly.com – March 7, 2013)

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

JOHANNESBURG (miningweekly.com) – A silicosis class action application launched on Thursday against mining giant Anglo American South Africa (AASA) could result in the largest-ever silicosis liability of any gold mining company.

So asserted the legal collaboration that filed the application in the Johannesburg High Court and which comprised the Legal Resources Centre (LRC), Garratt Mbuyisa Neale attorneys (GMN), London-based lawyers Leigh Day and Legal Aid South Africa.

The application would be served on Thursday on AASA, a company believed to hold assets worth some $15-billion.

The legal team said in a statement that the application was opt-out and, therefore, provided a mechanism through which the interests of the wider class of silicosis sufferers ¬– including those who were unaware that they had the disease – were protected.

The class action application against AASA was a ‘natural progression’ from the President Steyn litigation against AASA, it claimed.

In 2004, 18 claims relating to miners employed at AASA’s President Steyn mine, in the Free State, were filed by the same legal team, alleging that AASA negligently controlled and advised its mines with regard to the prevention of dust exposure and silicosis.

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PDAC-Mining legend Friedland looks to burnish his image – by Euan Rocha and Rod Nickel (Reuters.com – March 6, 2013)

http://www.reuters.com/

TORONTO – (Reuters) – Leave it to the irreverent Robert Friedland to brighten the mood of a mining conference in the throes of a deep, collective depression.

The outspoken financier, known for his talent for picking winners in a risky business, made a rare public appearance on Monday to trumpet his latest venture, Ivanplats Ltd. It was a star turn by a man apparently unburdened by self-doubt or any lack of confidence in the industry’s resilience.

Friedland’s company, one of a handful of initial public offerings in the mining industry last year, owns South Africa’s Platreef, a project rich in platinum, palladium, gold, rhodium, nickel and copper.

Ivanplats owns the “largest mechanizable, ethical precious metal discovery in the world,” Friedland said at the Prospectors and Developers Association of Canada convention in Toronto, promising that the geological nature of the deposit would allow for more humane working conditions than those in rival South African mines.

“We’ve discovered something that is very good,” he said, “We’re quite confident that the nickel and copper values are double what we would need to recover, gold, platinum, rhodium and palladium at a negative cost.”

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Finland ranked as #1 for global mining investment—Fraser Institute Survey – by Dorothy Kosich (Mineweb.com – March 1, 2013)

http://www.mineweb.com/

742 mineral exploration and development companies surveyed by Vancouver’s Fraser Institute say Indonesia is the worst place to do business out of 96 global jurisdictions.

RENO (MINEWEB) – The mining and exploration companies who responded to 2012/2013 Fraser Institute’s Annual Survey of Mining Companies ranked Finland as the best place to do business, while Indonesia was deemed the worst place for mining and exploration companies.

Along with Finland, the top 10-ranked jurisdictions are Sweden, Alberta, New Brunswick, Wyoming, Ireland, Nevada, Yukon, and Norway. All were in the top 10 last year except for Utah and Norway.

The 10 least attractive jurisdictions for investment are (starting with the worst) Indonesia, Vietnam, DRC (Congo), Kyrgyzstan, Zimbabwe, Bolivia, Guatemala, Philippines, and Greece. All of these jurisdictions except DRC Congo, Greece and Zimbabwe were in the bottom 10 last year.

The jurisdiction deemed to have the best current mineral potential assuming current regulations and land use restrictions is Greenland, followed by Finland, Sweden, Nevada and Saskatchewan. The worst is Bolivia.

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SA must instil new confidence in global investors – Motsepe – by Martin Creamer (MiningWeekly.com – February 26, 2013)

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

JOHANNESBURG (miningweekly.com) – South Africa would benefit greatly if it succeeded in instilling new confidence in the global investment community, African Rainbow Minerals (ARM) executive chairperson Patrice Motsepe said on Tuesday.

Answering questions after the JSE-listed ARM presented a 30% fall in headline earnings to R1.41-billion in the six months to December 31, Motsepe said the countries that had created the most jobs, lifted living standards highest, improved literacy most and provided the best health facilities were those that offered global investors the highest degree of confidence.

Elucidating in reply to Mining Weekly Online, Motsepe emphasised – also see accompanying video – the importance of corporates like ARM engaging in ongoing communication with the government.

In such discussions it was important for CEOs to be forthright in also raising the negative aspects of doing business in South Africa. Government, he said, had no choice but to partner with the private sector in order to benefit the people of South Africa.

Governments of developing countries needed jobs for their people and could only provide employment in partnership with the private sector. He said the attention that other developing countries were affording potential investors was impressive.

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