Chromium/Platinum Group Metals

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

JOHANNESBURG (miningweekly.com) – The biggest challenge facing South Africa’s ferrochrome industry was no longer China, but local energy supply constraints, chrome producer Afarak executive chairperson Dr Alistair Ruiters said on Wednesday.

Speaking at the seventh South African Ferro-Alloys conference, convened by MetalBulletin Events, he said power supply would remain a problem for the foreseeable future.

Industrial users would likely face further electricity price increases, more blackouts and further buy-back requests, undermining the competitiveness of the local ferrochrome industry, he noted. South Africa was also at risk of losing market share, not only to China, but also to the rest of the world, as other countries, such as Finland, had seen a reduction in energy costs.

Ruiters highlighted the energy supply constraints as a significant concern, stating that the industry was becoming increasingly “debeneficiated” as it exported more raw ore instead of value-added products.

He pointed out that South Africa’s chrome ore exports to China had grown significantly from 100 000 t/y in 2004 to 6-million tons a year in 2013.

“South Africa today supplies more than 50% of China’s ore requirements,” he added.

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http://www.bdlive.co.za/

A DAY after Deputy President Cyril Ramaphosa endured searing cross-examination at the Marikana commission of inquiry, government and mining stakeholders convened in Midrand to discuss some of the very issues he was being made to answer for.

The state of South Africa’s mining industry has been debated ad nauseam in the past few years, in particular after the Marikana massacre in 2012. What has been lacking is a clear plan to not only resolve the issues causing so much conflict, but also to put the industry in a position to meet historically high expectations from across the spectrum.

When the mining lekgotla was first convened two years ago, hopes were high that it would result in concrete steps being taken to pull the sector back from the brink. Since then it has seen more conflict, which includes the longest protected strike in the history of the country, in platinum mines.

The sector has also not won any new friends through its contribution to transformation and broader social development. In turn, the matters that have dogged the industry’s competitiveness for years continue to be an obstacle to further growth.

Rising input costs, including for electricity and labour, look far from abating, while policy uncertainty continues in mineral resources law amendments that appear to remain unattended in the president’s in-tray.

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http://www.bdlive.co.za/

AT THIS week’s mining lekgotla, the future of the currently suppressed platinum industry is likely to be a key agenda item. Whether fuel cell technology takes off is a critical determinant of what this future might look like.

In its latest set of facts and figures, the Chamber of Mines states that “despite the significant role and contribution of the platinum mining sector to the South African economy, the industry is currently in a challenging position”.

It cites the combined effect of slowing global demand, market surpluses and associated declining prices, increasing production costs and the effect of continued labour relations strife as specific challenges.

The chamber also highlights weakness of demand for catalytic converters in Europe. Combined with some substitution of platinum by palladium — a challenge because of palladium’s much lower price — this suppressed demand suggests a break-even marginal return to platinum of $1,600/oz.

In South Africa, about “59% of the industry is either marginal or loss-making” as it is difficult to keep marginal production costs below $1,600/oz. The platinum price is at present around $1,460/oz, with a 200-day moving average of roughly $1,430. As a result, some investment analysts have gone so far as to say that there are no more profits to be made in platinum.

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http://www.bloomberg.com/

Companies that buy operations put up for sale by Anglo American Platinum Ltd. (AMS) after a pay strike by South African mineworkers will need to coexist with labor unions rather than mechanize the operations, said the chief executive officer of Shanduka Group, which owns stakes in platinum mines.

Anglo American Platinum, the Johannesburg-based unit of Anglo known as Amplats, said last month that it will sacrifice its status as the world’s biggest producer of the precious metal by seeking buyers for four mines and possibly stakes in two joint ventures after first-half profit fell 88 percent because of a five-month strike. The company employed almost 50,000 people at the end of last year, according to data compiled by Bloomberg.

South African mines are labor-intensive, a legacy of the apartheid system that ended in 1994. The whites-only government based its economy on using cheap black labor to mine the world’s biggest gold and platinum deposits. To end the strike, Amplats, Impala Platinum Holdings Ltd. and Lonmin Plc were forced to agree to above-inflation pay increases that they said they couldn’t afford. Impala has said it may mechanize a future development to reduce its labor costs.

“Going the mechanized route is an aggressive approach,” Phuti Mahanyele, the CEO of Shanduka, said in an interview at the U.S.-Africa Business Forum in Washington yesterday. “We have to find ways to work with labor.”

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http://www.dailymaverick.co.za/

The platinum strikes may seem a distant memory to those not working in the industry. While the companies figure out how they’re going to cover the losses and the high increases, work is underway to address some of the underlying causes of the unrest, such as housing. Little has been done, but this could be the year that changes it all.

Thumeka Maswanoqana stood to tell her story of Wonderkop, Marikana.

“There are no proper structures or buildings. There is no water, no electricity,” the Sikala Sonke Women’s Organisation member told the Marikana Commission. “People use pit toilets. It is very difficult. When it’s raining – as we’re in shacks – when it’s raining the workers will stand on top of their beds … These workers work under difficult circumstances, but they are staying in very unbearable places.

“Their lives was supposed to be easy [but] even the people who died during the strike asking for more pay don’t have houses,” said Maswanoqana, speaking in April at Wits University. “We are living under difficult circumstances. Right now during this strike the poverty in Marikana is very bad.”

After this year’s five-month strike at Anglo American Platinum (Amplats), Lonmin, and Impala Platinum (Implats), it was clear discontent among mineworkers went beyond just wage issues.

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http://www.bdlive.co.za/

THE decision by Anglo American Platinum (Amplats) to put some of its Rustenburg mines on sale is hardly surprising. The market and industrial relations turmoil of the past few years was destined to reach a tipping point, and it looks like it has arrived.

In essence, the world’s largest platinum producer has decided to rid itself of its biggest headaches, and hopes someone has the appetite for the pain. The best mines are usually bought, not sold.

After the longest strike on record, driven by the Association of Mineworkers and Construction Union (Amcu), which often demonstrated a poor long-term game, Amplats must have had enough of managing a relationship in which trust seemed impossible to achieve. As counterintuitive as it may sound, the ability of unions and management to manage their sometimes adversarial partnership is a significant factor in staying invested.

The company’s relationship with Amcu is clearly frayed, and it is entirely possible that a way forward in light of further restructuring became a distant prospect.

With the sale of these assets, Amplats also would no longer have to deal with a historical migrant labour problem that requires a lot of funds to mitigate, including the possibility of building houses for all its employees.

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TORONTO (miningweekly.com) – Africa-focused project developer Ivanhoe Mines on Monday reported that the first batch of assay results from the company’s underground diamond-drilling programme at the Kipushi copper/zinc/germanium/lead and precious-metals mine, in the Democratic Republic of Congo, had confirmed initial visual estimates of high-grade zinc and copper mineralisation in both the Big Zinc and copper-rich Serie Recurrente zones.

Among the first significant results were three holes drilled to validate historical models of the down-plunge continuity of Big Zinc mineralisation, which returned zinc grades of 40.9% over 348.5 m, 44.8% over 339.4 m and 33.3% over 305.8 m.

The Canadian firm said the down-plunge geometry of the holes did not allow it to estimate the true widths of the deposits.

The exploration programme found that internal zones of exceptionally rich mineralisation in the first two holes, KPU001 and KPU002, returned zinc grades of 60.4% over 35.1 m, 56.3% over 18 m and 56.6% over 71 m. These internal zones also returned germanium grades of 87.2 g/t, 120.4 g/t and 111.9 g/t respectively.

An internal copper/silver/germanium-rich zone in the third hole, KPU003, graded 6.1% copper, 44.5% zinc, 144 g/t silver and 66.9 g/t germanium over 31 m from 197 m. Historical resource estimates at Kipushi excluded silver and germanium.

KPU003 also discovered a zone grading 58.6% zinc and 293.8 g/t germanium over 22.3 m, about 180 m below the historical measured and indicated resources.

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http://www.miningmx.com/

[miningmx.com] – AFTER the labour turmoil of the past two-and-a-half years, what can mining employers and investors expect in the years ahead?

Since January 2012, when the first illegal mining strike at Impala Platinum (Implats) rocked the industry, so much has changed that the labour market dynamics are hardly recognisable.

Trade unions, employee expectations, and the established mode of conducting negotiations over wages have been suddenly and violently swept away, leaving uncertainty and confusion behind.

Although conditions have changed, too much has stayed the same. Tied up with the new revolt are embedded production and labour market models: a low-skill, labour intensive industry based on a 150-year-old tradition of migrant labour. It is the legacy institutions that the new labour revolt will ultimately displace, whether by intent or as an unintended consequence.

In mid-2014, that fight is far from over because South Africa’s mining industry will be under pressure to change in fundamental ways. This will include many things: from the way it values, rewards and communicates employees and how it takes care of their social needs of employees to the extent to which it is able to mechanise, get by with fewer employees who are more productive, more skilled, less migratory and better paid.

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http://www.miningmx.com/

[miningmx.com] – THE longest mining strike in South Africa’s history has forced the country’s platinum producers to consider accelerating plans to move to smaller, more productive workforces.

According to them, there’s simply no other way of coping with a volatile, unpredictable labour environment, a business restraint which is compounded by the increasingly complicated market for their metals.

Anglo American Platinum (Amplats), the world’s largest primary producer of platinum, has been the most outspoken on its plans. After spending most of 2012/13 trying to restructure its Rustenburg assets, it is now in the throes of a company-changing review.

The outcome is largely expected to see it cast off the deep-level, labour-intensive mines where the sweetest parts of the orebody have been mined out.

“Amplats’ non-core Western Limb assets, Union, and some of its marginal Rustenburg shafts may well be divested by the group in time,” JP Morgan Cazenove’s Allan Cooke and Steve Shepherd said in a recent report.

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http://in.reuters.com/

JOHANNESBURG – (Reuters) – Forty-eight hours after talks to end South Africa’s longest strike hit a brick wall when the mining minister suddenly pulled out, a bishop and an anti-establishment corporate lawyer engineered a deal at a secret meeting in a ritzy hotel.

The events, revealed by interviews with key players in the five-month platinum strike, expose the impotence of the bargaining structures that have underpinned labour relations since the end of white-minority rule in 1994.

They also cast a shadow over the ruling African National Congress (ANC), which admonished the minister for inviting the lawyer to the talks after he had left the ANC to be elected to parliament for the ultra-leftist Economic Freedom Fighters (EFF).

The chastened minister then withdrew from the negotiations, almost scuppering an agreement between the world’s three biggest platinum firms and the striking Association of Mineworkers and Construction Union (AMCU), which has informal ties to the EFF.

“They did not tell me how to withdraw,” the minister, Ngoako Ramatlhodi, told Reuters. “They just told me: ‘We think you have done enough. We want you to go slow on this.'”

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 http://www.reuters.com/

MARIKANA South Africa – (Reuters) – Tens of thousands of South African platinum miners returned to work on Wednesday after wage deals ended the longest and most damaging strike in the country’s history.

The five-month strike hit 40 percent of global production of the precious metal and has cost Lonmin LMI.J, Anglo American Platinum (AMSJ.J) and Impala Platinum (IMPJ.J) a combined 24 billion rand ($2.25 billion) in lost revenue.

Industry and union officials said miners were streaming back to work and Reuters reporters saw thousands trudging to Marikana before sunrise on a cold winter’s morning. A supervisor at the Marikana operations of London-listed Lonmin told Reuters it could be a week or more before any workers went back underground. A return to full production could still take three months.

“Viva AMCU! Viva Lonmin!” one worker shouted on his way to a Lonmin processing plant. Miners in a bus danced and sang in jubilation as it drove up to the gates. Lonmin had set up huge canvas tents in a nearby stadium where miners underwent medical and other checks.

Calling for a “living wage” for its members, many of whom live in poverty, the Association of Mineworkers and Construction Union (AMCU) had demanded an immediate doubling of basic wages to 12,500 rand ($1,200) a month.

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