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Anglo American – Haunted by history – by Rex Gibson (Financial Mail – January 31, 2013)

http://www.fm.co.za/

What’s in Mark Cutifani’s in-tray

What kind of company will Mark Cutifani inherit? Every move Anglo American makes provokes an intense response from its myriad local stakeholders. This despite its moving its primary listing to London 14 years ago . Rex Gibson reflects on the role mining, and in particular Anglo American, has played in the SA economy.

It may be one of the most inept public relations performances ever by a government not renowned for its PR skills. President Jacob Zuma went to the World Economic Forum in Davos intending to reassure the world that SA welcomed investors in mining. But it appears that nobody told some of his top lieutenants.

A few days before, mineral resources minister Susan Shabangu launched a broadside of remarkable ferocity and insensitivity against Anglo American and its subsidiary, Anglo American Platinum (Amplats). The two culprits had had the nerve to announce their business proposals without talking to her.

Though clearly directed at these two, her bullying approach carried a disturbing message for the industry as a whole: “I’ll show you who’s the boss.” The result was that Zuma felt obliged to repudiate Shabangu, insisting that investors were welcome. But that didn’t do much for the confidence and sense of security of those looking to store their money for the long term in a safe place.

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Mining tycoon becomes first African billionaire to pledge half his wealth to charity – by Geoffrey York (Globe and Mail – January 31, 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 — As a boy in an impoverished village in South Africa’s apartheid era, Patrice Motsepe watched his mother giving free food to the poorest customers at their small grocery store.

It was a lesson he never forgot, even when he made history by becoming South Africa’s first black billionaire. Ranked the eighth-richest man on the continent with an estimated fortune of $2.65-billion, the 51-year-old mining tycoon has become the first African billionaire to make a dramatic pledge to give away half the wealth generated by his family’s assets.

It’s a huge coup for U.S. entrepreneurs Warren Buffett and Bill Gates as they try to launch a global wave of philanthropy. They have persuaded nearly 100 billionaires to pledge the bulk of their wealth to charity, but most so far are American, and Mr. Motsepe is believed to be the first in the fast-rising African economy to participate in the program, the Giving Pledge, in which prosperous families are encourage to give away at least half their wealth.

The 51-year-old mining tycoon announced Wednesday that he has joined the Giving Pledge. Members of the campaign have courted him for months. Last August he held talks with Mr. Buffett in Omaha, and last month Mr. Gates flew to Cape Town and met Mr. Motsepe to explain the Giving Pledge. At a press conference on Wednesday, Mr. Gates joined by video link to praise Mr. Motsepe’s decision.

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UPDATE 3-Anglo American’s $4 bln hit clears decks for new CEO – by Sarah Young and Brenda Goh (Reuters.com – January 29, 2013)

http://www.reuters.com/

LONDON, Jan 29 (Reuters) – Anglo American took a $4 billion hit to its Minas Rio project on Tuesday, clearing the decks for new boss Mark Cutifani and indicating that the delayed Brazilian operation will eventually get off the ground.

Minas Rio, which is now costing Anglo more than three times its original estimates, has been seen as Anglo’s most significant failure of recent years and is partly responsible for costing outgoing chief executive Cynthia Carroll her job.

The writedown to the valuation of the huge iron ore project and a jump in the bill for its development to $8.8 billion, alongside a planned overhaul for the company’s troubled platinum business, are as near to a clean slate as new CEO Cutifani is going to get.

Shares in Anglo American gained 2.2 percent to 19.14 pounds ($30.06), topping Britain’s blue-chip leader board in midday trading after the announcement of the impairment charge. “The Minas Rio impairments give the incoming CEO a clean slate, creating a degree of positive sentiment,” Bernstein analyst Paul Gait said.

“The greater detail and clarity on the progress of Minas Rio can only increase the confidence around the executability and delivery of the project.”

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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/

HANS MERENSKY (1871-1952)

Hans Merensky was born in 1871 in Botshabelo in the Transvaal. His father Alexander, a German, was an ethnographer interested in the scientific study of local African culture; he was also resident missionary in the area.

In 1882 the family returned to Germany where Merensky finished his schooling and then went to the State Academy of Mining in Berlin to study mining geology and engineering, and then took a doctorate in geology at the Royal Technical College of Charlottenburg. His course professor in Berlin remarked on Merensky’s sixth sense for ferreting out mineral deposits.

Following that he worked in the coal mines of Silesia before joining the Department of Mines in East Prussia. In 1904 Merensky returned to South Africa on sabbatical from the Department to do some geological field studies and it was here that he made the first of a suite of major mineral discoveries in southern Africa. Working in the Transvaal he discovered tin near Pretoria and then became associated with Premier Diamonds.

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Iamgold to cut back Mali exploration activity – by Pav Jordan (Globe and Mail – January 24, 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.

A move by Iamgold Corp. to reduce exploration activity in Mali marks the latest move by the Toronto-based company to protect itself from political risk in the region.

Iamgold has operations in Canada, South America and Africa, but half its output comes from mines in Mali, and neighbouring Burkina Faso. In Mali it is a 41-per-cent owner in the Sadiola gold mine and a 40-per-cent owner in Yatela, also a gold mine.

“Although it is business as usual at the Sadiola and Yatela mines operated by the company’s joint venture partner and which are approximately 1,300 kilometres by road from the regions of conflict, the company is reducing its exploration activity in the region at this time as a precautionary measure,” Iamgold stated in a news release on Tuesday.

The company said, however, that production at the joint venture operations had not been disrupted by the conflict in Mali, where Islamic militants have taken over a large swath of the territory.

Iamgold, one of the largest mining companies operating in Mali, has been shifting its focus away from the African continent for the past two years, selling stakes in mines in Ghana in early 2011.

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Canadian miners caught up in Mali unrest – by Jessica McDiarmid (Toronto Star – January 23, 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.

Canadian miners in Mali are grappling with security as a French-led assault pushed rebel forces further away from the capital on Tuesday.

Some companies have reduced operations, cancelled exploration or pulled out foreign workers. But mining operations are still carrying on normally in Mali’s gold-rich southwest, where most companies work hundreds of kilometres from the fighting that has gripped the vast West African nation.

Toronto-headquartered IAMGOLD evacuated about six Canadian workers from several areas in early January when rebels began advancing southward toward the capital, Bamako, as a “precautionary measure,” said Bob Tait, vice president of investor relations.

It has cut some exploration activities but its two mines continue to operate normally, he said. IAMGOLD holds equal shares in the Sadiola and Yatela gold mines with AngloGold Ashanti, which operates both mines. Mali is Africa’s third-largest gold miner after Ghana and South Africa. Production — and investment — is rising as its government looks to take advantage of high metal prices worldwide.

As of 2011, Canadian mining assets in the country were nearly $500 million, ranking it ninth in Africa. There are more than 15 Canadian mining and exploration firms working in the country, according to Natural Resources Canada.

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Rio reviews Mozambique as miners retreat from big plans – by Agnieszka Flak and Clara Ferreira-Marques (Reuters.com – January 22, 2013)

http://www.reuters.com/

JOHANNESBURG/LONDON, Jan 22 (Reuters) – Rio Tinto has begun a review of its Mozambique coal mining operations which cost it a $3 billion write-off, reconsidering development plans, partners and its options for getting the coal from pit to port.

Rio’s troubles in Mozambique offer a cautionary tale on big projects in new areas, which have become increasingly unattractive for miners under pressure from shareholders to control spending and improve returns.

A source familiar with the project said the review was underway. “The reality is that Rio has to look at what it has, and at what options there are,” said the source. The focus is not currently on a sale, although a new project partner could help Rio to share the infrastructure and development costs.

Rio sacked chief executive Tom Albanese last week when it wrote off $14 billion on the value of its aluminium arm and the Mozambique coal assets it bought in 2011. Mozambique’s infrastructure had proved more challenging than expected, Rio said, and estimates of recoverable coking coal used in steel production were lower than expected.

Benga mine, in which India’s Tata Steel owns a minority stake, began exporting last year but the amounts remain a small fraction of the eventual estimated capacity of Rio’s total Mozambique coal assets.

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More strife in South Africa’s troubled mines – by Margaret Evans (CBC New.ca – January 21, 2013)

 http://www.cbc.ca/news/

Labour unrest ripping through the country

Picture a site not far from the town of Rustenburg in the broad expanse of South Africa’s North West “platinum province,” along the border with Botswana. To one side stands the industrial hulk of the Lonmin mine, symbol of industry and (until recently) South Africa’s booming resource economy. It’s grey concrete shafts rise up out of the ground to tower over a maze of power lines.

Sprawled at its feet, the muddy shantytown that serves as home to the miners who fuel the industry, and scratch out their meagre living. In the distance you can see the red kopi, the hill where 34 miners met their end, shot dead by police in the midst of a wildcat strike in August. A crooked cluster of white wooden crosses, their memorial.

This is the stage where the most seminal event in South Africa’s recent history was played out, where the raw elements of a fractured society collided with deadly effect.

“They were killed right in front of me,” says miner Teboho Hlakentso. “And some of the people who got killed, they were not just shot, they were stabbed with spears by the police.

“So the people would be shot and they would be laying there wounded and dying and the police would take their spears and the police would finish them off with spears.”

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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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