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Africa Mining

Friedland does it again with huge DRC copper project – Lawrence Williams (Mineweb.com – January 18, 2013)

http://www.mineweb.com/

Robert Friedland’s Ivanplats has just released new resource data on its Kamoa project in the DRC, placing it firmly among the world’s largest known undeveloped copper deposits.

LONDON (MINEWEB) – Canadian mining entrepreneur extraordinaire, Robert Friedland, appears to have done it again. Not merely content with his companies finding the Voisey’s Bay nickel mega-deposit in Canada and the giant Oyu Tolgoi copper/gold project in Mongolia, his recently floated Ivanplats company has unearthed what it claims is Africa’s and the world’s largest undeveloped high-grade copper discovery. The deposit is at Kamoa in the Democratic Republic of Congo (DRC), the location for most of Africa’s major high grade copper deposits.

According to the latest release from Ivanplats, Kamoa’s Indicated Mineral Resource has expanded to 739 million tonnes grading 2.67% copper, an increase of 115% since the company’s IPO in October last year. The new resource estimate has stemmed from a new, independent review of drilling results by AMEC E&C Services of Reno, Nevada.

The release goes on to note that the new estimate increases Kamoa’s Indicated Mineral Resources to a total of 739 million tonnes of material grading 2.67% copper, containing 43.5 billion pounds (19.7 million tonnes) of copper – more than doubling the previous September 2011 estimate of 348 million tonnes, containing 20.2 billion pounds of copper. Both estimates used a 1% copper cut-off grade and a minimum vertical mining thickness of three metres.

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Striking Amplats miners agree to return to work – by Ed Stoddard (Globe and Mail – January 17, 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 — Reuters – Anglo American Platinum Ltd. (Amplats) miners will end an illegal walkout from Wednesday night and want talks to prevent further action against the world’s largest producer of the precious metal, a labour leader said.

Workers at three of Amplats’ South African mines went on a wildcat walkout from Tuesday’s overnight shift, hours after the company, a unit of London-listed Anglo American, announced plans to mothball shafts and cut 14,000 jobs.

“The strike was only for last night,” Amplats labour leader Evans Ramokga told Reuters. He added workers would press management to find a way to head off job cuts, which were equal to about 3 per cent of South Africa’s overall work force in the mining sector. Amplats officials were not immediately available to comment.

Amplats earlier said an unspecified number of employees at its Khomanani, Thembelani and Tumela mines, in the heart of South Africa’s platinum belt, had refused to go underground.

Only Khomanani was among the mines slated for indefinite closure or sale by the company, so the wildcat action indicates militant labour activists had persuaded miners in other shafts to join sympathy strikes.

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HUMAN RIGHTS WATCH NEWS RELEASE: Eritrea: Mining Investors Risk Use of Forced Labor

Canadian Firm Failed to Adequately Address Issue

JANUARY 15, 2013

Click Here For: Hear No Evil: Forced Labor and Corporate Responsibility in Eritrea’s Mining Sector

(Toronto) – International mining firms rushing to invest in Eritrea’s burgeoning minerals sector risk involvement in serious abuses unless they take strong preventive measures. The failure of the Vancouver-based company Nevsun Resources to ensure that forced labor would not be used during construction of its Eritrea mine, and its limited ability to deal with forced labor allegations when they arose, highlight the risk.

The 29-page report, “Hear No Evil: Forced Labor and Corporate Responsibility in Eritrea’s Mining Sector,” describes how mining companies working in Eritrea risk involvement with the government’s widespread exploitation of forced labor. It also documents how Nevsun – the first company to develop an operational mine in Eritrea – initially failed to take those risks seriously, and then struggled to address allegations of abuse connected to its operations. Although the company has subsequently improved its policies, it still seems unable to investigate allegations of forced labor concerning a state-owned contractor it uses.

“If mining companies are going to work in Eritrea, they need to make absolutely sure that their operations don’t rely on forced labor,” said Chris Albin-Lackey, business and human rights senior researcher at Human Rights Watch. “If they can’t prevent this, they shouldn’t move forward at all.”

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Canada-Eritrea Mine, Bisha, Used Forced Labour, According To Human Rights Report – by Mike Blanchfield (The Canadian Press/Huffington Post – January 15, 2013)

http://www.huffingtonpost.ca/

OTTAWA – A highly critical human rights report released Tuesday is shedding new light on the darker implications of the Conservative government’s ambitions for Canadian mining companies in Africa.

The report by Human Rights Watch says Vancouver-based Nevsun Resources Ltd. (TSX: NSU) failed to ensure that forced labour was not used in the construction of its mine in Eritrea, the hermit-like pariah state on the Horn of Africa.

Though the company was concerned when the problems first came to light and tried to investigate, it was blocked by its state-owned partner, says the report by the New York-based agency. Nevsun said it has since instituted rigorous screening practices at its Bisha mine project and taken steps to ensure that forced labour is no longer used.

“When Nevsun began building its Bisha mine in Eritrea in 2008, it failed to conduct human rights due diligence activity and had only limited human rights safeguards in place,” Human Rights Watch said.

The Eritrean government insisted that Segen Construction Company, a local Eritrean contractor, carry out construction of the mine in 2008. Segen — owned by the ruling People’s Front for Democracy and Justice — routinely exploits conscript workers that the government assigns to it, the report alleges.

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Amplats offers new non-mining job for every mining job lost – by Martin Creamer (MiningWeekly.com – January 15, 2013)

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

JOHANNESBURG (miningweekly.com) – Anglo American Platinum (Amplats), which is setting out to create at least one new non-mining job for every mining job lost in its proposed downsizing, saw its own share price and the global platinum price rise after announcing the most far-reaching restructuring of its 58-year history, which proposes that two mines close, four shafts be mothballed, a mine be put up for sale and the 14 000 mining jobs earmarked for shedding be matched by the creation of at least an equal number of new non-mining jobs.

In addition to redeploying one-third of 14 000 people back into the rest Anglo American group and the mining industry as a whole, Amplats is offering a new non-mining job opportunity, on top of a retrenchment package, to each of the employees who cannot be placed in another mining job and are forced to enter the non-mining space.

The aim in reducing the employee complement to 45 000 is to be job neutral. “We’ll seek to ensure that we compensate for any necessary labour restructuring through the creation of an equivalent number of non-mining jobs,” Amplats CEO Chris Griffith said.

This saw its share price rise 1.28% on the JSE to R497.30 before 10 am and the platinum price rise to $1 691/oz, overtaking a gold price of $1 653/oz. South Africa’s Chamber of Mines CEO Bheki Sibiya applauded Amplats for setting out to create new non-mining jobs in housing, infrastructure and small business development in Rustenburg and labour-sending areas to make amends for the mining jobs lost.

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S. Africa’s Amplats to shed mines, 14,000 jobs – by Ed Stoddard (Globe and Mail – January 15, 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 — Reuters – Anglo American Platinum, the world’s top platinum producer, said it will mothball two South African mines, sell another and cut 14,000 jobs, risking a repeat of last year’s strikes when about 50 people died.

In a review announced on Tuesday that is seen as crucial to reviving the fortunes of Anglo American, which owns about 80 per cent of Amplats, the platinum producer said it aimed to cut output by around a fifth or 400,000 ounces.

But analysts have cautioned the cut could be overstated, as it is based on production capacity that Rustenburg mines have not matched for several years. Against forecast production, the cuts may amount to closer to 300,000 ounces.

Amplats has said it probably fell to a full-year loss because of the 2012 strikes, which were centred on Rustenburg where most of the job cuts will fall. The price of platinum rose over 2 per cent to 3-month highs, leaping past gold for the first since March last year, on concerns over supply.

Reaction was swift, with an Amplats labour leader threatening a strike across its South African operations if the indefinite closures, when they would be put on “care and maintenance”, go ahead.

“If they put any shaft on care and maintenance, all of the operations will go on strike. Nothing like this will be allowed,” said Evans Ramogka, labour leader in Rustenburg.

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Nevsun accused of turning blind eye to forced labour – by Geoffrey York (Globe and Mail – January 15, 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 — For the conscripts who were ordered to work at a Canadian gold mine in Eritrea, the conditions were nearly unbearable: 12-hour shifts, six days a week, with poor food and no toilets, for a salary of less than $15 a month.

When one conscript left the mine without permission to attend a grandparent’s funeral, he was captured and imprisoned for four months, and then forced back into his unit.

These are among the allegations in a hard-hitting report by Human Rights Watch, to be released Tuesday, which criticizes the Canadian mining company for failing to prevent the use of forced labour at its mine. The report is based on interviews with former workers at the mine, who later fled the country.

The Vancouver-based company, Nevsun Resources Ltd., responded to questions from The Globe and Mail by saying that it expresses “regret” for any forced labour at its mine in Eritrea. It said it doesn’t permit conscripted labour at its mine today, but doesn’t know whether its subcontractor used conscripts in the past.

The allegations highlight the ethical and moral challenges for Canadian mining companies when they operate in countries with long histories of human rights abuses. And it raises the question of whether Canadian companies can develop mines in countries such as Eritrea without becoming complicit in those abuses.

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UPDATE: 14,000 jobs affected as Amplats restructures Rustenburg – by Geoff Candy (Mineweb.com – January 15, 2013)

http://www.mineweb.com/

The platinum miner hopes to extract R3.8bn in cost savings and create 14,000 new jobs through the plan.

GRONINGEN (MINEWEB) – Anglo American Platinum said Tuesday it will, among other things, reconfigure its Rustenburg operations into three mines, sell its Union mine and deliver R3.8bn in cost savings by 2015.

These plans are all the result of a review of its operations undertaken by its parent Anglo American in a bid to return the company to long-term profitability and are expected to affect as many as 14,000 jobs, 13,000 of which will be in the Rustenburg area.

According to a release out on Tuesday morning, the group said, it would restructure its Rustenburg operations into a sustainable 320-350,000oz platinum producer across three operating mines.

As a result, “Four unsustainable, high-cost shafts, namely Khuseleka 1 and 2 and Khomanani 1 and 2, will be put on long-term care and maintenance.” This it says will see the production profile reduced by approximately 400,000oz per annum with a baseline production target of 2.1 – 2.3 million oz per annum.

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Anglo American: The house that Oppenheimers built, now led by Mark Cutifani – by J Brooks Spector (The Daily Maverick – January 10, 2013)

http://dailymaverick.co.za/

Late last year, the Daily Maverick described the giant company’s travails in its story, “Anglo American: A giant corporation between a big rock and a very hard place”, and this week Anglo’s board took its decision to end the uncertainty about its new leadership.

For decades, Anglo was South Africa’s pre-eminent industrial and mining enterprise. At one point more than half the value of listed shares on the JSE were Anglo American-controlled enterprises. After the end of Apartheid’s isolation, Anglo began to spin off many of its enterprises that were not part of its core focus on mining. In 1999, Anglo changed its primary listing from the JSE to London. More recently still, Anglo American spun its gold mining interests into a separate corporation that merged with Ghanaian mining interests into AngloGold Ashanti – the same company Cutifani now heads.

Overall, reaction to Cutifani’s selection, so far at least, is generally optimistic. Many analysts are saying plainly Cutifani is probably the best person around for this job, based both on his broad international mining experience and his knowledge of South Africa’s specific social-political-economic circumstances. There are doubters, of course. The National Union of Mineworkers (NUM) was publicly disappointed that Anglo’s board couldn’t find a single black or female South African to head the multinational.

A deeper, and so-far unanswered, question is why, given the government’s obvious interest in, and the company’s frequently expressed support for, South Africa’s economic transformation, there seems to have been no visible, organised process for grooming a local, black successor generation for Anglo’s top management spots.

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Barrick, China walk away from Africa deal – by Pav Jordan (Globe and Mail – January 9, 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.

Barrick Gold Corp. has ended months of efforts to sell its African unit to state-owned China National Gold Group (CNGC), unwilling to settle for fire-sale prices even as it struggles to cover massive cost overruns elsewhere.

The assets had been up for sale as part of a revitalization strategy that was launched by the world’s largest gold miner last summer amid a falling stock price and shareholder discontent.

The move leaves Barrick with a high-cost producer in African Barrick Gold PLC at a time when mining on the African continent is losing its shine for shareholders, who are wary of resource nationalism amid months of labour strife in African mines.

The end to the talks also underscores the fiscal discipline of Chinese state-owned mining companies, showing they are careful not to overpay for assets even as the country seeks ownership of mineral resources to feed booming economic growth.

Barrick chief executive officer Jamie Sokalsky, who took the helm of the Toronto-based miner in June after the ouster of predecessor Aaron Regent, engaged the Chinese as one of a series of bold moves to address investor backlash against Barrick, which like others in the sector pursued aggressive growth for years but failed to spark good returns for shareholders.

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New Anglo American CEO aims to create world’s best mining company – by Martin Creamer (MiningWeekly.com – January 8, 2013)

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

JOHANNESBURG (miningweekly.com) – Creating the world’s best mining company is the aim of Mark Cutifani, who takes over the reins of Anglo American as CEO from April 3.

Speaking from London in an international conference call that South African journalists could only enter late as a result of a technical glitch, Cutifani said that the iconic London- and Johannesburg-listed company, which turns 100 in four years, had “the assets, the people and the will” to be the world’s number-one diversified miner, a position BHP Billiton currently holds.

“I’m looking forward to starting with the team in just over two months,” said Cutifani, who has been appointed at a time when Anglo American is seen by some to be poised for potential ascendancy, following its significant streamlining by outgoing CEO Cynthia Carroll, who leaves at the end of April after a six-year stint.

Liberum Capital analyst Ben Davis questioned the amount of traction a turnaround story in Anglo American would gain, however, given the recent company guidance that put 2013 earnings 22% below consensus.

Davis added that the challenges arising from the “structurally defunct” Anglo American Platinum (Amplats) and continuing capital cost increases at the Minas Rio iron-ore project in Brazil had no easy solutions.

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African Barrick Gold/China National Gold deal dead in the water – by Lawrence Williams (Mineweb.com – January 8, 2013)

http://www.mineweb.com/

The long running negotiations between Barrick Gold and China National Gold over the former’s African Barrick Gold (ABG) subsidiary have fallen through and ABG’s share price has dived as a result.

LONDON (MINEWEB) – Discussions on the sale of African Barrick Gold (ABG) to China National Gold Group Corporation (CNG) appear to have come to nothing after a rigorous examination of ABG’s operations by the Chinese state-owned gold mining company. London-quoted African Barrick’s share price initially dropped sharply on receipt of a statement from ABG confirming its 73.9% owner, Canada’s Barrick Gold, has now ended its discussions with CNG which means that ABG is ‘no longer in an offer period under the Takeover Code’.

The Barrick announcement went on to say “Given the direct nature of the discussions between Barrick and CNG, this has meant an extended period of uncertainty for ABG as well as significant extra work. Throughout this period, our focus has been on ensuring the ongoing integrity and stability of our operations, and our employees have made an important contribution towards achieving this. At the same time, Barrick has made it clear that it sees considerable long-term value in the ABG asset base. Barrick remains committed to supporting ABG in fully realising the potential of the business.”

This has not been a great day for Barrick with the news also coming through that its plans to develop the huge Reko Diq copper/gold project in Pakistan’s Balochistan province have been declared invalid by the Pakistani high court, although given the company’s recent rethinking on its major project programme, coupled with the location of Reko Diq close in a far from stable part of the world, this may actually be perceived as a positive in some eyes!

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Cutifani Said to Be Leading Candidate for Anglo CEO Post – by Matthew Campbell & Firat Kayakiran (Bloomberg.com – January 5, 2013)

http://www.bloomberg.com/

AngloGold Ashanti Ltd. (ANG) Chief Executive Officer Mark Cutifani is the leading contender to replace Cynthia Carroll at the helm of mining company Anglo American Plc (AAL), according to people familiar with the situation.

Cutifani has emerged at the top of a list of candidates that has included former BHP Billiton Ltd. (BHP) CEO Chip Goodyear and Chris Griffith, the head of Anglo American’s platinum unit, said the people, who asked not to identified because the matter is private. The decision isn’t yet final on a replacement for Carroll, who said in October she would resign as CEO of the London-based miner after a $14 billion drop in market value.

Carroll’s successor may be announced within two weeks, the people said. The new CEO will face the challenge of increasing growth at Anglo American, which has struggled with cost overruns at projects, including the Minas-Rio iron ore mine in Brazil, and sparred with Chilean state mining company Codelco.

“Mark is a pretty energetic guy,” said Caesar Bryan, a portfolio manager at Gabelli & Co. in Rye, New York, which owns Anglo American and AngloGold shares. “He’s someone that’s very focused on return on invested capital and he seems to have an open mind to doing things differently.”

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Excerpt from “The History of Mining: The events, technology and people involved in the industry that forged the modern world” – by Michael Coulson

To order a copy of The History of Mining please click here:http://www.harriman-house.com/products/books/23161/business/Michael-Coulson/The-History-of-Mining/

CECIL RHODES (1853-1902)

Once one of the British Empire’s most revered but also widely hated figures, Cecil John Rhodes enjoyed a burst of popularity after his death when his legacy, the Rhodes Scholar awards to Oriel College, Oxford, in particular marked him as a great philanthropist and visionary. Since then his reputation seems to have been in almost permanent decline as first his admiration for the Anglo Saxon ‘race’ and then his vision of a worldwide British Empire poisoned his public esteem and earned the contempt, particularly, of modern historians.

Rhodes was born in Bishops Stortford 30 miles north of London, the son of a clergyman. Whilst his brothers attended England’s great public schools and went up to Oxford, Rhodes was sickly and was educated locally. His health meant that he did not initially go to university but left school at 16. After being diagnosed with TB he went to South Africa to join his brother Herbert on his cotton farm in Natal. After a couple of years building up the farm Herbert, who had earlier spent a short time in the diamond fields near Kimberley in Griqualand West, returned to Kimberley and Rhodes followed. Herbert earlier had some success with his claims, but under Cecil’s direction things took on a more organised and businesslike tone.

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2012: A year for calling leaders to account – by Geoff Candy (Mineweb.com – January 2, 2013)

http://www.mineweb.com/

Tragedy, firings and calls for leadership were at the heart of the mining sector’s big stories of 2012.

GRONINGEN (MINEWEB) – 2012 was a big year for leadership. A host of countries, including France and China elected new leaders, others, like the US, chose more of the same. But, all around the world, leaders were being forced to work a little harder to win votes – unsurprising really, when one considers the parlous state of the global economy.

But, it was not just in the political sphere that leadership was being questioned. Mining leaders, at both a government and a company level were put on the spot. Indeed, one could argue that leadership (or a lack thereof) was at the heart of many of the sector’s largest stories in 2012.

The biggest and most tragic story of the year was the unrest on South Africa’s gold and platinum mines – unrest that led to the massacre at Marikana and a wave of strikes almost unprecedented in the industry.

While the full extent of the changes wrought in that crucible are yet to be seen, it is certain that the sector has undergone profound change and will have to see much more before it can begin to recover.

The judicial commission of inquiry into the massacre being Chaired by former judge Ian Farlam, has yet to reach a verdict but it has already raised a number of questions about leadership on all sides of the issue.

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