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Africa Mining

South Africa’s ANC to debate 50% mining tax – by Mike Cohen and Andres R. Martinez (Mineweb.com – June 26, 2012)

 www.mineweb.com

ANC delegates will this week debate proposals for a mining windfall tax of 50% as an alternative to nationalising mines in the world’s largest producer of platinum, chrome and manganese.

(BLOOMBERG) –  South Africa’s ruling African National Congress may endorse plans to raise mining taxes and increase state control over the economy as President Jacob Zuma shores up grassroots support ahead of a party election.
 
ANC delegates will this week debate proposals for a mining windfall tax of 50 percent as an alternative to nationalizing mines in the world’s largest producer of platinum, chrome and manganese. The plans are contained in draft policy documents to be discussed at a four-day conference in Johannesburg from today. The ANC controls 66 percent of the seats in Parliament.
 
Zuma, 70, who is seeking a second five-year term at a party election in December, is under pressure from his labor union allies and a growing number of jobless young people to do more to combat poverty and unemployment in Africa’s largest economy. Any attempt to extract more revenue from mining companies such as Impala Platinum Holdings Ltd. and Lonmin Plc risks undermining an industry battered by rising labor costs, electricity shortages and a global economic slowdown.

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SA doesn’t just need dirt diggers – by Christy Filen (Mineweb.com – June 25, 2012)

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According to Dr. Paul Jourdan, South Africa would do better leaving its minerals in the ground if it can’t better link its mining sector to the broader economy

JOHANNESBURG (Mineweb) –  Dr Paul Jourdan, who was part of the research team that compiled the ANC’s State Intervention in the Minerals Sector (SIMS) report, has said that South Africa needs more than just dirt diggers in its mining industry and that if the sector does not make the linkages as envisaged in the report then it would be better to leave the minerals in the ground.
 
“If you say I’m just a dirt digger and this is my core competence then fine, go to Australia. I’m not sure that we want companies that are just going to dig holes. I think that we want companies that are going to make those linkages and build our economy for the future, post mining” said Jourdan.
 
Speaking at the AngloGold Ashanti and Motjoli Resources Mining for Change breakfast in Johannesburg today, Jourdan described Australia as suffering from the Dutch disease where he said that the current minerals boom is causing de-industrialisation in other parts of their economy.

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South African mining at a cross roads – Carroll – by Christy Filen (Mineweb.com – June 7, 2012)

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According to Anglo American CEO, Cynthia Carroll, South Africa’s policy choices over the coming weeks will profoundly impact not just the mining industry but also the country as a whole.

JOHANNESBURG (Mineweb) –  CEO of Anglo American, Cynthia Carroll, has said that South Africa’s policy choices over the coming weeks will profoundly impact not only the future of the mining industry but also the country.
 
“Those choices must be made wisely.  We are at a crossroads.  There is a clear path that will lead to prosperity and there are blind alleys that we must avoid” Carroll said to delegates at the Mining Lekgotla gala dinner last night.
 
Carroll has been clear in her opposition to one of these “blind alleys”, nationalisation, on many occasions, along with its promise of a “miracle cure for all ills” said the CEO. With voices waning on the nationalisation issue, Carroll moved on to address the ANC’s State Intervention in Mining Sector report (SIMS) where proposals were put forward for a mineral resource rent tax.

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How First Quantum settled with ENRC for compensation over Congolese mine – by Matthew McClearn (Canadian Business Magazine – June 05, 2012)

Founded in 1928, Canadian Business is the longest-publishing business magazine in Canada.

It’s a bit like discovering your spouse’s name on a marriage certificate—to somebody else. Written in French and bearing official-looking stamps in red and black ink, the 56-page contract detailed a joint venture between a collection of mysterious shell companies and the government of the Democratic Republic of the Congo. The happy new partners had agreed to harvest a valuable collection of mining scrap heaps called the Kolwezi Tailings. But for executives at First Quantum Minerals, the implication seemed clear: its crown jewel had just been stolen.

This was not entirely unexpected. Founded in the mid-1990s, Vancouver-based First Quantum developed a reputation for mining in difficult frontier countries. The Congo is the frontier of frontiers, where one either takes or is taken. Since Belgium’s King Leopold II ran the country as a private fiefdom in the late 19th century, a dominant theme of Congolese history has been plunder of this abundant natural endowment by those in power.

Beneath its soils lie some of the world’s richest reserves of copper, cobalt, uranium, gold, diamonds and other resources. First Quantum coveted the copper- and cobalt-rich scrap heaps; it invested years and billions of dollars building the necessary infrastructure to harvest them. But then its relationship with the Congolese government went to hell. Losing its mining licence to someone else was just a formality.

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AngloGold Ashanti plans for a mining renaissance – by Dick DeStefano (Sudbury Mining Solutions Journal – June 1, 2012)

 Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association (SAMSSA). destefan@isys.ca This column was originally published in the June, 2012 issue of Sudbury Mining Solutions Journal.

“The future of mining underground will change dramatically in the next few years and suppliers need to be ready for the shift”

SAMSSA Members were recently treated to a special strategic plan regarding the mine of the future by Michael MacFarlane who  is a Senior Vice President with AngloGold Ashanti which is a leading gold mining company, headquartered in Johannesburg, with a portfolio of 21 operations spanning 10 countries.  Born and educated in Canada, Michael holds a Bachelor of Engineer degree in Mining.  He previously worked for Vale Inco for 16 years in Canada where he was Director for Mining and Milling for their Canadian operations.  He became Senior Vice President with AngloGold Ashanti in 2010.

Mike was asked a number of key questions about this evolving mining event worldwide.

1. What is the key assumption you are using as a premise for the mine of the future?

Our specific view is what I had presented to SAMSSA members and addresses our deep gold mining issues in South Africa.  We are working to unlock more than 70 million ounces of ultra deep resource.  The problem we are solving is how to mine all the gold – only the gold, all the time.  My presentation was specific to technology to address these main value drivers.

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Anvil acquisition helps Minmetals turn the corner in Congo – by Geoffrey York (Globe and Mail – May 30, 2012)

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.

KINSEVERE, DEMOCRATIC REPUBLIC OF CONGO – Three months after a $1.3-billion takeover, the new owners of Anvil Mining Ltd. have posted an ambitious business plan on the wall of their Congo mining office.
 
At the top of the list: “savvy acquisitions” – with the goal of becoming one of the world’s three biggest mid-tier miners and creating a $20-billion global player. And the former Canadian-owned copper mine in Congo is crucial to the strategy.

Anvil’s acquirer, China Minmetals Corp., has learned its Canadian lessons well. Eight years ago, the state-owned company ignited a firestorm of controversy in Canada with its clumsy bid for Noranda Inc., sparking fierce criticism from Canadian politicians and leading to the eventual failure of the bid.
 
This time its expansion drive is shrewd and carefully planned. Anvil will become the springboard for Minmetals’ aggressive growth plan, which is focused primarily on Africa – especially the risky but mineral-rich terrain of Congo.

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Kinross, gold producers vow to fight back as shares tumble despite rising prices – by Pav Jordan (Globe and Mail – May 10, 2012)

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.

Canada’s big gold miners are under siege in the markets, their shares tumbling even as bullion rides high, and they’re vowing to fight back.

“I’m a shareholder and my family is a shareholder, and we’re determined to change that around,” Tye Burt, chief executive officer of Kinross Gold Corp., declared Wednesday, referring to the company’s languishing stock price.

Mr. Burt and others in the industry are lamenting the gap between the value of gold stocks and the price of bullion, which is holding near-record highs after a surge that is almost a decade old now.

Kinross shares are down 60 per cent in the past eight months. Barrick Gold Corp. (ABX-T37.650.942.56%), the world’s biggest producer, has seen its stock sink 34 per cent since September, while smaller rivals such as Yamana Gold Inc. (YRI-T13.750.332.46%) and Iamgold Corp. (IMG-T10.80-0.07-0.64%) have suffered declines of 27 per cent and 55 per cent respectively from their 52-week highs.

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Kinross Gold’s Mauritanian desert storm -by Nicolas Johnson (Globe and Mail – May 8, 2012)

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 Tasiast gold mine in the Mauritanian desert was the biggest acquisition in Kinross Gold Corp.’s 19-year existence and one of the biggest takeovers in the history of the gold industry.

It was to have been the centrepiece of the Kinross portfolio, transforming the Toronto-based company into one of the fastest-growing gold miners in the world.

Instead, the $7.1-billion acquisition of Red Back Mining Inc. has bludgeoned Kinross’s stock and balance sheet. The company took a $2.49-billion writedown in February, angering investors and leaving the company’s chief executive officer battling to retain his credibility. Shares of the miner have lost about half their value since the August, 2010, deal.

On Wednesday morning, at Kinross’s annual meeting in Toronto, president and CEO Tye Burt will get another chance to convince shareholders that the biggest bet of his career will pay off. The miner reports earnings a day earlier, on Tuesday.

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Iamgold takes aim at the gold mining big leagues – by Pav Jordan (Globe and Mail – April 20, 2012)

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.

Steve Letwin, chief executive officer of midtier gold miner Iamgold Corp., practically rubs his hands in glee as he talks about plans to propel the company into the major leagues in as little as five years.

With his Toronto-based company sitting on $1.4-billion in cash and with zero debt on the balance sheets, Mr. Letwin lays out a plan to nearly double production by 2017 from the current 850,000 ounces, with most of that to come from acquisitions, including one in coming months that will likely be worth between $400-million and $500-million.

“If we can’t pull the trigger on something in the next three months that makes sense for our shareholders we haven’t done our job,” said Mr. Letwin, a 30-year resource industry veteran who has broken ground from Canada to Colombia to deepest Africa.

“And if we’re going to buy, we’re going to buy now. These equities are ridiculously cheap, some of them.”

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Ivanhoe CEO Loses in Rio ‘Chess Game’ Over Mongolia Mine – by Christopher Donville and Liezel Hill (Bloomberg.com 0 April 19, 2012)

http://www.bloomberg.com/

Twelve years after beginning his quest to build a copper mine in Mongolia’s Gobi Desert, it’s checkmate for Robert Friedland.

Ivanhoe Mines Ltd. said yesterday the billionaire investor resigned as chief executive officer, along with other top executives at the Vancouver-based company. It said Rio Tinto Group agreed to ensure funding of the $6 billion Oyu Tolgoi project’s construction. The accord means Rio is free to appoint Ivanhoe’s management, cementing control of the company three months after increasing its stake to 51 percent.

“Friedland’s lost the chess game with Rio,” John Stephenson, a fund manager in Toronto who oversees about $2.7 billion at First Asset Investment Management, said in an interview.

Oyu Tolgoi — which means “turquoise hill” in Mongolian – – is just the latest of several chapters in the often controversial career of Friedland, who holds a 14 percent stake in Ivanhoe. A one-time mentor to Apple Inc. co-founder Steve Jobs, Friedland, 61, has raised funds for mines in North America and Asia since the mid-1980s and led the C$4.3 billion ($4.3 billion) sale of the Voisey’s Bay nickel deposit in Canada in 1996. His next adventure may be developing mines in Africa.

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Iamgold’s growing investment in Burkina Faso – by Geoffrey York (Globe and Mail – April 14, 2012)

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.

ESSAKANE, BURKINA FASO – This is a dangerous land. Just across the border are the Sahara wastes where Islamist terrorists and separatist rebels roam free. Inside the country are gangs of bandits and the occasional violent riot by drunken soldiers.

Yet it’s also a land where Canadian miners are eagerly investing hundreds of millions of dollars. The gold belt of northern Burkina Faso, like other regions of West Africa, has emerged as a new favourite haunt for Canadian mining companies, despite a vast array of security risks.

Less than four years after its arrival, Toronto-based Iamgold Corp. (IMG-T12.55-0.13-1.03%) has become the biggest private employer in Burkina Faso with 2,200 employees. It plans to invest a further $600-million over the next three years to expand its mine and double its processing capacity.

Like many other Canadian investors, the company sees its future in West Africa’s fast-growing mining sector, rather than in the older mines of South Africa, even though the South African industry is still bigger.

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In Ghana, a mining activist fights the gold goliaths – by Paul Carlucci (Toronto Star- April 7, 2012)

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.

 TARKWA, GHANA—Whether on billboards along the roads or embroidered on shirt collars, mining companies are ubiquitous in this jungle hub of Ghana’s Western Region.

Their presence is sometimes lost behind the lazy-leafed plantain trees, drooping palm fronds, and steep, green hills encasing the town, but a mountain of waste rock obscures much of the horizon.
 
“They take the gold and leave these kinds of things,” says Daniel Owusu-Koranteng, executive director and co-founder of the Wassa Association of Communities Affected by Mining (WACAM).
 
Ghana, once known as the Gold Coast, is the continent’s second-biggest producer of gold, after South Africa. It is also home to significant deposits of bauxite, manganese, aluminum and diamonds.

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Impose $100/t raw chrome [South Africa] duty soonest, Ruukki urges – by Martin Creamer (MineingWeekly.com – March 30, 2012)

www.miningweekly.com 

JOHANNESBURG (miningweekly.com) – South African ferrochrome aspirant Ruukki has urged the South African government to impose a $100/t duty on the export of raw chrome from South Africa with the utmost urgency.
 
Speaking at an industry conference in Hong Kong, Ruukki enterprise director Dr Danko Konchar called for industry consolidation to protect jobs and maximise South Africa’s chrome resource endowment.
 
Ruukki currently exports raw chrome directly to China and sells a diverse range of chrome products internantionally into the the stanles steel and steel sectors. His plea follows years of requests to government to halt the South African ferrochrome industry’s demise in the face of rising Chinese production from raw South Africa chrome ore.
 
Konchar told the conference that the fundamental challenge for South Africa was to create a competitive ferrochrome industry capable of protecting, sustaining and creating jobs while growing its global market share.

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Gilbertson ‘very, very bullish’ on platinum-group metals – by Martin Creamer (MiningWeekly.com – April 2, 2012)

www.mineweekly.com

JOHANNESBURG (miningweekly.com) – Mining industry doyen Brian Gilbertson, who has been involved in several landmark industry-making investments, foresees South Africa’s platinum endowment as providing the potential for yet another industry-making surge.
 
Besides the outlook of growing demand and struggling supply, there is a snowballing conviction that South Africa could and should become the first mover in creating a kind of ‘Platinum Valley’ that emulates the great Silicon Valley success of the US – and Gilbertson’s Newco is willing to stride towards that potential goal, with the full backing of the State-owned Industrial Development Corporation (IDC), exciting new technology that is poised to assist in adding value and a local community leader who is champing at the bit to see that it happens in his area.
 
“Being a miner and a beneficiater will allow shareholders to participate in the entire value chain,” Newco’s Arne Frandsen tells Mining Weekly Online in a video interview (see attached).
 
The IDC, which currently has R100-billion-plus on its balance sheet, is part of a special task force that, together with the R23-billion Newco, is driving the beneficiation initiative.

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[State capitalism] Is it a rival to market capitalism? And how does it affect the natural resources industries? – by Keith Campbell (MiningWeekly.com – March 30, 2012)

 www.miningweekly.com

Since the start of the current global economic crisis in 2008, there has been renewed interest in the concept of ‘State capitalism’, as distinct from ‘market capitalism’. (The term ‘liberal capitalism’ is shorthand for ‘liberal democracy plus market capitalism’.)
 
This interest is centred on China more than any other country, in part because of the country’s ability (so far) to ride out the crisis, in part because of the key role it has played in keeping the global economy running while the developed West has been stagnating and in part because China is, unlike India or Brazil or South Korea, not a democracy. This last factor creates the impression of a ‘Chinese model’ of autocracy plus State capitalism that can be compared and contrasted with the ‘Western model’ of liberal capitalism.
 
There has been considerable debate about the rival merits of these ‘models’ in recent times. Thus, renowned British historian Niall Ferguson, who teaches at Harvard University, in the US, had a recent article on State capitalism in the US academic journal Foreign Policy. In late January, The Economist, of London, had a cover and special report devoted to State capitalism. The topic has also been addressed in the past couple of months by The Wall Street Journal and Bloomberg Businessweek. And these are only some, albeit prominent, examples.

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