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Africa Mining

As Coal Boosts Mozambique, the Rural Poor Are Left Behind – by Lydia Polgreen (New York Times – November 10, 2012)

http://www.nytimes.com/

CATEME, Mozambique — When Augusto Conselho Chachoka and his neighbors heard that the world’s biggest coal mine was to be built on their land, a tantalizing new future floated before them. Instead of scraping by as subsistence farmers, they would earn wages as miners, they thought. The mining company would build them sturdy new houses, it seemed. Finally, a slice of the wealth that has propelled Mozambique from its war-addled past to its newfound status as one of the world’s fastest-growing economies would be theirs.

Instead, they ended up being moved 25 miles away from the mine, living in crumbling, leaky houses, farming barren plots of land, far from any kind of jobs that the mine might create and farther than ever from Mozambique’s growth miracle.

“Development is coming, but the development is going to certain areas and certain people,” Mr. Chachoka said, taking a break from trying to coax enough food from his scraggly field to feed his six children.

Mozambique is one of the poorest nations in the world, broken by a brutal colonial legacy, a 16-year civil war and failed experiments with Marxist economic policy. But it is also one of the so-called African Lions: countries that are growing at well above 6 percent annually, even amid the global downturn.

Mozambique is poised for a long economic boom, driven by its vast deposits of coal and natural gas. Vale, the Brazilian mining company, is planning to invest $6 billion in its coal operation near here, and other coal giants like Rio Tinto will soon begin producing coal in the Tete region of northern Mozambique.

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Moving South Africa’s mining sector into the 21st century – Mamphela Ramphele -by Geoff Candy (Mineweb.com – November 17, 2012)

http://www.mineweb.com/

A crisis should never be wasted

GEOFF CANDY: Hello and welcome to this mineweb.com newsmaker podcast my name is Geoff Candy and joining me on the line is Dr. Mamphela Ramphele. She’s an author, academic, activist and self-described change agent. She’s been at the height of many of the issues South Africa has faced during its transition from apartheid to democracy. She’s helped found the black consciousness movement in the country and has had transformation very much in the site since the 1970s. She’s the founder of Letsema circle and more recently the Citizens Movement.

She served as the vice Chancellor of the University of Cape Town as well as the managing director of the World Bank. She’s also the chairwoman of Goldfields. Dr. Ramphele thank you for joining me. Now the last in the wave of strikes have affected the country’s mining sector since the tragic events at Marikan, ended yesterday but we’ve seen strikes flaring up in other sectors. One gets the sense that while the strikes have to an end for the moment this was only the opening salvo in a much bigger transformation. Would you agree with that?

DR. MAMPHELA RAMPHELE: I would absolutely agree that we are paying the price of having neglected to pay attention to the urgent need for restructuring or the transformation of our socio economic reality because we inherited in 1994 an economic system and a social system that persists to date.

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Correction: Given platinum’s problems, can Xstrata really justify a Lonmin takeover? – by Lawrence Williams (Mineweb.com – November 12, 2012)

http://www.mineweb.com/

Speculation that Xstrata will make another attempt to oust the Lonmin Board and take the company over remains rife in London, despite Lonmin’s rebuff of the Xstrata overtures. (Correction on Lonmin rights issue status)

LONDON (MINEWEB) – Despite an official rebuff by the Lonmin Board, Xstrata looks as though it may well be about to make a serious play to take over Lonmin and its South African platinum mines – although the timing could be better for the diversified miner with the Glencore merger vote coming up in just over a week’s time – just a day after Lonmin’s own proposed fundraising plan is due to be voted on.

Xstrata is a logical saviour for Lonmin, although the latter doesn’t seem to think so. It owns 24.6% of Lonmin already, has platinum, chrome and ferrochrome operations in the Bushveld Complex area – where 90% of the world’s platinum reserves are thought to lie and which accounts for 70% of annual global production – but is not a major platinum miner and could view picking up the remainder of Lonmin at a relatively cheap price as an attractive long term play.

It is sitting on a huge loss on its existing holding, but nevertheless probably sees Lonmin’s platinum reserves, resources and operations as a great long term asset, particularly at Lonmin’s current hugely depressed share price. But, perhaps importantly if it doesn’t take up its rights, a large proportion of the the Lonmin fundraising could remain with the underwriters – even though the rights issue price has been set at a substantial discount to make it more attractive to existing shareholders.

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Vale’s former boss Agnelli eyes Guinea potential again – by Clara Ferreira-Marques (UK Reuters – November 7, 2012)

http://uk.reuters.com/

Nov 7 (Reuters) – A mining venture co-founded by the former boss of Vale, Roger Agnelli, is among suitors eyeing BHP Billiton’s slice of the Mount Nimba iron ore deposit in Guinea, sources familiar with the matter said.

Other suitors for BHP’s share of the joint venture that holds the Nimba mining concession include the world’s largest steelmaker ArcelorMittal, which has a mine just over the border in Liberia, the sources said.

A dealmaker by background, Agnelli is staging a return to West Africa with billionaire banker Andre Esteves. Two years ago, Agnelli led Brazilian miner Vale’s push into Guinea, controversially taking a stake in iron ore assets that included blocks of the Simandou deposit confiscated by the government from rival Rio Tinto.

Agnelli, 53, was ousted from Vale last year after a decade at the helm. Analysts said his plans for a multinational Vale, did not chime with the Brazilian government’s own, more nationalistic view.

He is returning to mining and Guinea through B&A Mineracao, a partnership between his venture AGN Participacoes and Esteves’ investment bank BTG Pactual Group, just after Vale’s new bosses shelved their major commitment in the country.

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Vale partner says Guinea seeks to seize iron ore rights – by Richard Valdmanis, Clara Ferreira-Marques, and Saliou Samb (Reuters Canada – November 3, 2012)

http://ca.reuters.com/

DAKAR/LONDON (Reuters) – The mining arm of Israeli billionaire Beny Steinmetz’s business empire has accused the government of Guinea of seeking to “illegally seize” its assets through a probe into how it won rights to mine part of a major iron ore deposit.

Privately owned BSG Resources, which has been working in the West African country with Brazilian mining major Vale (VALE5.SA: Quote), confirmed it had received a letter from a government commission alleging improper behavior and graft in its winning of rights to develop blocks in the Simandou region.

The Financial Times reported on Saturday that a government committee backed by philanthropist George Soros had launched a corruption probe into the award process for the blocks in 2008 and sent the letter to BSG including a range of charges.

The blocks were stripped from Anglo-Australian miner Rio Tinto (RIO.AX: Quote) and the licenses passed to BSGR in 2008, under a previous administration. Simandou, in Guinea’s hilly and forested southeast, is estimated to hold what could be the world’s largest unexploited iron ore reserves.

“This is the fifth and most clumsy attempt by an already discredited Government of Guinea in an ongoing campaign to illegally seize BSGR’s assets,” BSGR said in a statement.

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Warnings of more job losses in strike-hit SA mining industry – by Natasha Odendaal (MiningWeekly.com – November 2, 2012)

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

JOHANNESBURG – South Africa’s largest platinum mining companies this week warned of potential job losses, while 400 workers were sacked at a chrome mine and at least one mining contractor confirmed that it would retrench 860 workers.

The warning of potential job losses in a country with a 25.5% unemployment rate comes as the latest Statistics South Africa Quarterly Labour Force Survey revealed a loss of 8 000 jobs in the mining industry during the three months ended September.

Considering that many of the mining companies hit by industrial action only started dismissals in the past month, it was likely that the full impact of the dismissals related to the wildcat strikes would only be seen in the fourth-quarter report.

There was also potential for more job losses arising from possible downsizing at several platinum operations.

Gold and platinum mining companies in recent weeks threatened mass dismissals, offered moderate wage increases and promised once-off bonuses, many in the range of R2 000, to coax workers back to work.

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Major facilitation still needed to create business case for mineral beneficiation [ferrochrome facilities] – by Nomvelo Buthelezi (MiningWeekly.com – October 26, 2012)

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

JOHANNESBURG (miningweekly.com) – According to research by American banking group Citigroup, South Africa is the world’s richest country in terms of its mineral reserves, which are worth about $2.5-billion. This leaves the country with significant potential to capitalise on the mineral reserves through mining and beneficiation – or does it?

Although it may seem that beneficiation is the clear route to take to further enhance the potential that South Africa holds with its extensive mineral wealth, there are major demands that must still be met before entrepreneurs will so much as utter the word ‘beneficiation’.

Firstly, there must be a business case for beneficiation; trying to force-feed it is utter folly. Where there are sound business cases, there is then the need for entrepreneurs to step up to the plate, which they will only do if South Africa’s political environment improves.

From government’s side, there has to be adequate electricity capacity and that elec- tricity has to be affordable. The next need is for the availability of the required skills, regrettably within a South African education and training environment that is currently poor. Also required are high-level marketing capability and logistics capacity.

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Striking South African miners killed at Canadian coal mine: reports – by Geoffrey York (Globe and Mail – November 1, 2012)

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 — Two striking miners have been killed by security guards at a Toronto-based company’s coal mine in South Africa, local reports say.

The deaths, confirmed by the company Thursday, are the latest in a year of sporadic violence that has killed more than 60 people at mines across South Africa, including 34 who were killed by police at the Marikana platinum mine in August.

In the clash on Wednesday, about 100 striking workers tried to storm a locked mine-explosives armoury at a coal mine owned by Toronto-based Forbes & Manhattan Coal, but were dispersed by security guards, police said.

“It is further alleged that the security officers chased some of the workers into an informal settlement near the mine and shots were fired, injuring two men,” police spokesman Colonel Jay Naicker said in a statement.

He said the two men died from their injuries in hospital, and police are investigating two counts of murder. The company confirmed Thursday that two of its employees were killed in the clash.

The company said it has suspended operations at its Magdalena and Aviemore underground coal mines in South Africa, where strikes have been continuing since Oct. 17.

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Centamin’s licence for flagship Sukari mine revoked by Egyptian court – by Peter Koven (National Post – October 31, 2012)

The National Post is Canada’s second largest national paper.

TORONTO – More than 18 months after the revolution, political risk remains a serious concern for companies doing business in Egypt.

Investors in Toronto-listed gold miner Centamin PLC learned this fact first-hand Tuesday, after an administrative court in Egypt ruled the company’s concession on its flagship Sukari mine should be revoked. There was no written judgment to go with the decision and Centamin was unable to get details.

The stock traded briefly in London, and was down 35% Tuesday morning before being suspended. It was halted in Toronto and never opened for trading.

The ruling was made as part of an ongoing case that originates with an Egyptian lawyer named Hamdy El Fakharany. He argues that the licence for Sukari should be revoked because of irregularities with the contract, which dates back to 1994, and because it does not generate enough revenue for Egyptians.

Centamin claims the Sukari concession agreement is valid and that this court has no jurisdiction to overturn it. The company is continuing operations at Sukari as if nothing happened, and analysts believe this issue can be settled at Egypt’s Supreme Court.

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Cynthia Carroll’s Anglo American legacy – by Geoff Candy (Mineweb.com – October 29, 2012)

 http://www.mineweb.com/

The numbers only really tell one side of the story.

GRONINGEN (MINEWEB) – When Cynthia Carroll, a coal geologist by training and, formerly, of Canada’s Alcan, took the reins at Anglo American in March 2007, then Chairman Mark Moody-Stuart cited her “clear leadership and communication skills, her highly relevant hands-on operational experience and her record of working with governments and other key stakeholders,” as important attributes.

This is the legacy Carroll leaves behind her by the numbers: In its 2006 financial year, Anglo American’s produced $5.5 billion in underlying earnings, a 46% increase over 2005. Operating profit jumped 54% to 9.8 billion and net debt fell 33% to 3.3 billion. The group also recorded the deaths of 44 employees and contractors. In 2011, the group reported a group operating profit of $11.1 billion and underlying earnings of $6.1 billion. It spent $5.8 billion in capex and reduced net debt to $1.4 billion down from $7.4 billion in 2010. The group also reported 17 deaths.

In between those numbers, however, lies a much broader story. Firstly, as my colleague Dorothy Kosich wrote a year after Carroll’s appointment was announced, “Carroll shattered the glass ceiling of international mining as the first female CEO to head a mega-mining company, specifically with deep South African roots. In an industry, which barely allowed women to work underground a couple of decades ago, Carroll’s appointment is a substantive indicator of change in mindset among international miners…Carroll also hails from Canada’s Alcan, where as president of the Primary Metals Group, she had to convince a sceptical public that smelting aluminium could actually evolve into a sustainable, environmentally clean activity.

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Zimbabwe: Chrome Ore Ban – Industry Collapses – by Master Mushonga (The Daily Maverick – October 25, 2012)

The Daily Maverick is a unique blend of news, information, analysis and opinion delivered from our newsroom in Johannesburg, South Africa.

According to Chamber of Mines of Zimbabwe (CMZ), there are over 4 000 registered chromite claims currently of which 46 percent are held by indigenous Zimbabweans while the remainder is held by five large scale mining companies.

ZIMASCO, Zimbabwe Alloys, Maranatha and Monawood as big players do have synergies with small scale operators, have smelting facilities and in most instances enter into tribute agreements for the chrome ore production on claims owned by large operators.

Last year in April, the Government banned the export of raw chrome to encourage the local beneficiation of chrome ore into ferrochrome before exporting.

This change in policy was effected without considering the existing smelting capacity, investment needed to increase capacity, any guarantee to cheap and uninterrupted power supply as well as lack of chrome reserves that can last for 10 to 15 years to justify the establishment of a smelter.

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South Africa: Anglo American – a Giant Corporation Between a Big Rock and a Very Hard Place – by J Brooks Spector (The Daily Maverick – October 29, 2012)

The Daily Maverick is a unique blend of news, information, analysis and opinion delivered from our newsroom in Johannesburg, South Africa.

ANALYSIS

Stuck between worker demands for a decent living wage and insistence for broader ownership rights (or even nationalisation) and the market’s implacable demands for profits, Anglo American may have to give up its place as an iconic South African institution and be content as one more middling mining company among many.

At one of those archetypal South African dinner parties the other night, the news that Anglo American CEO Cynthia Carroll had just resigned got more than a mention. One guest recalled that for decades, the hard men ensconced on the top floors of Anglo American’s 44 Main Street headquarters – the one with those magnificent friezes of African animals on the walls – controlled nearly 40% of Africa’s total GDP and that, in turn, meant something like 60% of the share value of the entire the Johannesburg Stock Exchange.

It was an empire almost without parallel – as if General Motors, Ford, DuPont, RCA and a half dozen other Fortune 500 stalwarts from America’s industrial Golden Age were one interlocking conglomerate. At its peak, Anglo’s organizational chart looked more like a complete depiction of the chemical relationships of the body’s Krebs metabolic cycle than a tightly structured industrial behemoth.

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In the Congo, Canada puts too much faith in mining companies – by Gerald Caplan (Globe and Mail – October 26, 2012)

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.

While he was attending the recent summit of La Francophonie in the Democratic Republic of Congo, Stephen Harper also met with human rights activists. Here’s what he told them:

“We’re concerned about many things in the Democratic Republic of Congo, including … violations of human rights… unfairness in some of the electoral process, but also we’re particularly concerned about the worsening situation in the eastern part of country. Canada will be supporting additional initiatives to combat the barbarous acts of sexual violence against women that are occurring all too frequently.”

These comments were both reasonable and trite. They’re exactly what all western governments say repeatedly about the Congo, yet little changes. There are far more important things he might have said.

He might, for example, have acknowledged that his government had already funded a campaign against sexual violence against women in eastern Congo that had received a negative assessment by his own government. The campaign was judged to have been poorly thought out and failed to achieve its objectives. This internal evaluation was revealed in The Globe and Mail by Geoffrey York, the Africa correspondent, who also interviewed Congolese civil society activists and found them to be equally critical of the Canadian project.

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Under pressure, Anglo CEO Cynthia Carroll quits – by Clara Ferreira-Marques and Sinead Cruise (Reuters – October 26, 2012)

http://www.reuters.com/

(Reuters) – Anglo American’s (AAL.L) Chief Executive Cynthia Carroll has quit after more than five years in the job, under pressure from investors over the miner’s lagging share price and continued dependence on troubled South Africa.

A geologist by training, New Jersey-born Carroll ruffled feathers when, fresh from the aluminum industry, she became the first non-South African, the first woman and the first outsider to take the top job at Anglo in 2007.

Brushing aside suggestions she was pushed to leave, Carroll and Chairman John Parker, her long-standing supporter, said on Friday there had been “differences of opinion” with shareholders but the decision to step down was her own, as she approached a seventh year in a “very grueling and demanding role”.

Carroll’s efforts to streamline a miner with colonial roots that became a sprawling conglomerate, her campaign to cut billions in costs and efforts to shift Anglo’s centre of gravity away from South Africa have won her support among investors. A campaign to improve ties with South Africa’s government has also garnered plaudits.

But her relationship with investors became more troubled after big-ticket acquisitions like the Minas Rio iron ore project in Brazil – an early bid to diversify Anglo’s portfolio – which became mired in cost overruns and delays.

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Cynthia Carroll exits as Anglo American CEO – by Eric Reguly (Globe and Mail – October 26, 2012)

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.

Rome — And then there were three. The surprise resignation Friday of Cynthia Carroll, the Alcan-trained CEO of global mining group Anglo American PLC, comes as a blow to female corporate advancement.

Ms. Carroll, 55, was one of only the four women CEOs among FTSE-100 companies. She was the first woman to take the top job at Anglo when she joined the company in 2007, as well as the first non-South African and the first non-insider. Founded in Johannesburg in 1917 by Sir Ernest Oppenheimer, Anglo had always picked its bosses from its own ranks.

Her departure, however, does not come as a blow to shareholder advancement. Anglo shares rose more almost 3 per cent Friday morning on the news that the search has begun for a new CEO. Ms. Carroll will not leave the company until her replacement is named, likely some time in the first half of 2013.

Ms. Carroll, an American who graduated from Skidmore College with a geology degree, worked for Alcan in Montreal from 1989 until she joined Anglo in March, 2007. Her last job at Alcan was head of its primary metals group, one of aluminium maker’s top jobs.

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