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Africa Mining

Africa’s rise pays out dividends for democracy – by Pascal Fletcher (Reuters India – April 5, 2013)

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JOHANNESBURG – (Reuters) – Africa is rising not only on the growth charts of economists. The continent that was a byword for poverty, chaos and bloodshed only a few decades ago, providing a media feast of famines and wars, is slowly but steadily notching up gains on the democracy scorecard too.

Last month’s generally peaceful Kenyan presidential election – and the Supreme Court process that confirmed Uhuru Kenyatta’s narrow win – confounded pundits’ predictions that East Africa’s biggest economy would tumble back into the same inter-tribal violence which bloodied a 2007 vote.

The Kenyan ballot, following a line of hotly-contested but broadly smooth elections last year in Senegal, Sierra Leone and Ghana, has bolstered what many see as a spreading embrace of multi-party democracy in Africa.

Combined with better economic management by many governments and a fast-growing population of young workers and consumers, this improving political maturity will underpin expected GDP growth for Sub-Saharan Africa of five percent or more this year.

“If you peel back ‘Africa Rising’, it is not just growth rates,” said John Stremlau, Vice President for Peace Programs at the Atlanta-based Carter Center and a veteran observer of African elections, including the most recent Kenyan one.

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Minerals beneficiation a key ‘pillar’ of SA’s reindustrialisation push – by Terence Creamer (MiningWeekly.com – April 4, 2013)

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

Trade and Industry Minister Dr Rob Davies has described minerals beneficiation as the “first pillar” on which South Africa’s reindustrialisation should be built and has reported that his department is working with the Department of Mineral Resources (DMR) and others to integrate beneficiation-supporting regulatory instruments into the amended Mineral and Petroleum Resources Development Act (MPRDA).

Speaking at the launch of the fifth iteration of South Africa’s Industrial Policy Action Plan (Ipap), Davies said the aim was to ensure that more value was added to domestic mineral products ahead of export, so as to extract greater economic value and employment from the country’s remaining mineral resources, estimated to be worth $2.5-trillion.

But he also saw the potential to create access to industrial minerals as South Africa’s “new long-term competitive advantage” for a domestic manufacturing sector that no longer benefited from access to the world’s cheapest electricity.

“By access to industrial minerals, we don’t mean that you can buy it at the London Metal Exchange price, or at an import-parity price. We mean that it must be available in the form that is required for downstream manufacturing and also at a price which is competitive,” he explained.

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Cutifani says to initially focus on [Anglo American] value creation – by Idéle Esterhuizen (MiningWeekly.com – April 3, 2013)

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JOHANNESBURG (miningweekly.com) – Diversified miner Anglo American’s new CEO Mark Cutifani has indicated that his initial focus would be to find ways to improve value creation within the company.

“I will look to start with the value proposition for being a major diversified [company]. I will look at the portfolio, the commodities we are in – do they make sense? Are they the right commodities for the future? The assets – are they competitive?…Should we be doing things differently to realise value?” he said during a video interview on his first day as CEO of the mining group.

Cutifani, who has mined on six continents in 25 countries and in 20 commodities and who succeeded Cynthia Carroll, indicated that he would be scrutinising the company’s balance sheet to determine whether it had the capacity to realise value and whether it was adequately operationally flexible.

A process of determining whether the right people were in the right positions to do the required work would also be undertaken.
Further, Cutifani said he would be looking into the company’s structures and systems, as the mining sector was lagging behind others in this regard.

“I would like to put those pieces together in that first three or four months…getting the major themes out there and understanding what we have to attack to really create value in the long term.

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Banro Leading Miners in Worst Drop Since 1990 – by Eric Lam & Christopher Donville (Bloomberg.com – April 2, 2013)

http://www.bloomberg.com/

Canada’s raw-materials stocks are forecast to extend their longest losing streak in more than 20 years, as companies such as Banro Corp. (BAA) and Teck Resources Ltd. (TCK/B) struggle with falling metals prices and concern China’s growth will slow.

The Standard & Poor’s/TSX Materials Index of 60 stocks posted its fifth monthly drop in March, the longest string of declines since April 1990. The index has plunged 18 percent over that period, led by a 62 percent slump in gold miner Banro. Teck, the country’s largest diversified miner, has tumbled 22 percent this year.

Producers of raw materials from copper to coal and gold have slid amid concerns China is settling into a slower growth path, mining companies face escalating costs and gold’s status as a safe haven is diminishing as the U.S. economy gains momentum.

“China’s economy is growing, just not fast enough, and it’s hard to see a lot of upside for mining and materials companies,” John Stephenson, a fund manager with First Asset Management, said April 1 by phone from Toronto. Stephenson helps manage C$2.8 billion ($2.8 billion), including Teck shares.

Growth in China, Canada’s second-biggest trading partner, grew at an average quarterly pace of 8.5 percent from 2011 to 2012, down from 9.4 percent in the previous eight quarters. Growth fell to a three-year low of 7.4 percent in September, before rebounding to 7.9 percent in the fourth quarter of 2012.

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RPT-BHP freezes its mining projects in Gabon -sources (Reuters India – April 2, 2013)

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(Reuters) – Top global miner BHP Billiton is freezing all its projects in Gabon, mining ministry sources said on Friday, dashing government hopes for sizeable investments in manganese and iron ore production.

A spokesman for BHP could not immediately be reached for comment.

The company holds licences in the Central African country for the mining of manganese at Mounana, 650 km east of the capital Libreville, and at Okondja, 150 km further to the north.

Government officials had also said BHP signed a contract a year ago for the Belinga iron ore mine, in northeast Gabon, edging out China’s Comibel. BHP has declined to comment on this.

“We respect the decision by BHP to freeze its activities in Gabon,” said a senior official at the mining ministry who asked not to be identified. “At the same time this is a blow to the country, which hoped to become the world’s largest exporter of manganese.”

Gabon is the world’s second-largest producer of the mineral, an ingredient in making steel, after South Africa. France’s Eramet has been mining manganese at Moanda in southeast Gabon for some 50 years through its Comilog subsidiary.

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Africa’s ‘Pilbara’ needs champion – Investec – by Marin Creamer (MiningWeekly.com – March 27, 2013)

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

JOHANNESBURG (miningweekly.com) – The Cameroon-Congo-Gabon region, often likened to Australia’s iron-ore-rich Pilbara, needs a champion in the mould of Fortescue founder Andrew Forrest to assemble companies, governments, financiers and end-users in a region that could give the iron-ore top-three a run for their money.

Investec Securities analysts Hunter Hillcoat and Marc Elliott speculate whether the possible increased involvement of Glencore could be the start, given the significant expanse of iron-ore mineralisation, including the potential for meaningful direct shipping ore (DSO) volumes.

It offers one of the few opportunities globally for a substantial iron-ore production base outside of that controlled by the top three – Vale, BHP Billiton and Rio Tinto – yet it remains a long way from production.

Last year, Equatorial Resources CEO John Welborn urged junior iron-ore producers in Gabon, Cameroon and the Republic of Congo (ROC) to work together to ensure that export markets could access the region’s minerals, with the Metal Bulletin’s ‘Steel First’ reporting his view that iron-ore exploration companies Sundance Resources, Core Mining and the government of Gabon needed to consolidate to maximise the potential of the rich craton.

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Russia, South Africa Seek to Create OPEC-Style Platinum Bloc – by Ilya Arkhipov & Franz Wild (Bloomberg.com – March 27, 2013)

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Russia and South Africa, countries that hold about 80 percent of platinum group metal reserves, plan to set up an OPEC-type trading bloc to coordinate exports.

“It can be called an OPEC,” Russian Natural Resources Minister Sergey Donskoy said late yesterday in an interview in Durban. “Our goal is to coordinate our actions accordingly to expand the markets. The price depends on the structure of the market, and we will form the structure of the market.”

South Africa mines about 70 percent of the world’s platinum and Russia 40 percent of its palladium, a metal from the same group used to cut car pollution, Johnson Matthey Plc (JMAT) said in a 2012 report. Other nations would be able to join the group. The U.S., Zimbabwe and Canada are among producers of the metals. The Organization of Petroleum Exporting Countries is an oil cartel.

Platinum and palladium prices rose following yesterday’s comments by Donskoy. South Africa and Russia signed only a “framework” accord, he said, with details yet to be decided.

“We are now forming working groups to work out joint actions on this market,” Donskoy said. “There will be a meeting in the summer to discuss mechanisms in detail.”

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Congo Reassures Copper Miners Rattled by Attack in Katanga – by Michael J. Kavanagh (Bloomberg.com – March 27, 2013)

http://www.bloomberg.com/

Democratic Republic of Congo’s mines minister reassured investors after separatists attacked the capital of mineral-rich Katanga province, raising concern among analysts that the region faces increased conflict.

At least 35 people died when 250 Kata Katanga militants battled soldiers and police in Lubumbashi on March 23 before surrendering to the United Nations. The government introduced a curfew and some businesses and schools closed early on March 25 in the city, home to the offices of some of the biggest mining companies operating in Congo.

“I’m personally reassuring miners that these events are temporary and will be completely put to a halt,” Mines Minister Martin Kabwelulu said by mobile-phone message on March 25. “A psychosis will reign for several days, but that will pass as well.”

After years of conflict and instability, Congo’s mining industry has flourished since 2009, with copper production doubling to about 600,000 metric tons last year, most of it coming from Katanga in the southeast. The Central African country was the eighth-largest producer of the metal in 2012, accounting for 3.4 percent of world output, according to the U.S. Geological Survey. It also produces half of the world’s cobalt, used in rechargeable batteries.

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

http://in.reuters.com/

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)

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“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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