Africa Mining – Page 97 – Republic of Mining

Investors Are Warning Clients That SA’s Mining Sector Is Now ‘Uninvestable’ – by Staff Reporter (Huffington Post South Africa – June 19, 2017)

June 19, 2017

http://www.huffingtonpost.co.za/

Investors are ringing alarm bells after the new mining charter was released by Mineral Resources Mosebenzi Zwane.

The new mining charter, announced by mining minister Mosebenzi Zwane on Thursday, has resulted in backlash from stakeholders, including unions and investors, Business Day reported on Monday.

The mining sector is now being called “uninvestable”. The charter includes requirements for companies to increase empowerment ownership to 30% within 12 months.

According to Business Day, Investec, in a note to its clients, said the charter made “South African miners uninvestable to a large segment of the market and it will be very tough to attract fresh capital to an already unloved sector.”

Why South Africa’s Mining Rules Are Drawing Fire: QuickTake Q&A – by Kevin Crowley and Paul Burkhardt (Bloomberg News – June 16, 2017)

June 16, 2017

https://www.bloomberg.com/

South Africa is far from the egalitarian rainbow nation envisaged by Nelson Mandela when he ushered in democracy in 1994. A prime example is the mining industry. Its highly paid, mainly white male executives oversee hundreds of thousands of mostly black workers laboring in some of the world’s deepest and most dangerous operations.

The government’s updated rules for so-called black economic empowerment, including more stringent ownership requirements, seek to reverse the imbalances. The new regulations have the mining industry up in arms, as producers protest what they say was a disturbing lack of consultation on changes that are likely to require dilution of their existing shareholders.

1. What are the new regulations?

A new national Mining Charter, published in a government gazette by Mineral Resources Minister Mosebenzi Zwane, aims to involve more black groups and women in the mining industry and ensure that more of the proceeds from mining flow to the black majority.

De Beers Launches World’s Largest And Most Advanced Diamonds Exploration Ship – by Anthony DeMarco (Forbes Magazine – June 16, 2017)

June 16, 2017

https://www.forbes.com/

De Beers has officially launched the mv SS Nujoma, what the diamond mining giant calls the “world’s largest and most advanced diamond exploration and sampling vessel” to explore diamond deposits in the waters off the coast of Namibia.

The $157 million vessel is under the ownership of Debmarine Namibia, a 50/50 joint venture between the Government of the Republic of Namibia and De Beers Group. It is the only company in the world to mine diamonds offshore, having started in 2002. It produced around 1.2 million carats in 2016.

An inauguration ceremony was held Thursday in Walvis Bay, Namibia, attended by Prime Minister Saara Kuugongelwa-Amadhila and Founding President Dr Sam Shafiishuna Nujoma, who the vessel was named after, as well as Obeth Kandjoze, Namibia’s Minister of Mines and Energy.

New mining rules in South Africa would require 30-per-cent black ownership – by Geoffrey York (Globe and Mail – June 15, 2017)

June 16, 2017

https://www.theglobeandmail.com/

JOHANNESBURG — South Africa has announced a “revolutionary” new mining code to force companies to give a 30-per-cent ownership stake to black partners, triggering a plunge in mining stocks and a swift threat of legal action by the industry.

Canadian companies such as Ivanhoe Mines Ltd., which is developing one of the world’s biggest platinum mines in South Africa, would be among those potentially affected by the new ownership rules. The new code would increase the minimum black ownership from 26 per cent to 30 per cent for mine owners, while also requiring companies to be majority black-owned if they want a prospecting licence.

Mining companies would have to give 1 per cent of their annual revenue to their black shareholders before paying dividends to any other shareholders. The new code would take effect in 12 months.

UPDATE 4-Barrick Gold to hold talks with Tanzania over export row – by Fumbuka Ng’wanakilala and David Lewis (Reuters U.S. – June 14, 2017)

June 15, 2017

https://www.reuters.com/

DAR ES SALAAM/NAIROBI, June 14 Barrick Gold’s chairman and Tanzania’s president met on Wednesday and agreed to hold talks aimed at resolving an escalating dispute over an export ban which has hit Barrick’s Acacia Mining PLC .

Shares in Acacia, which is 63.9 percent owned by Barrick, jumped as much as 11 percent, to 303 pence, after the news and closed 5.5 percent higher, outpacing sector rivals. Tanzania is Africa’s fourth-largest gold producer, and Acacia its largest miner, with three gold mines that also produce copper in the East African country.

Acacia’s market value has nearly halved to about $1.4 billion since Tanzania banned the export of unprocessed ore in March, part of a push for the construction of a local smelter to make the country’s gold exports more valuable.

Miners Tumble as South Africa Escalates Black Ownership Rules – by Paul Burkhardt and Kevin Crowley (Bloomberg News – June 15, 2017)

June 15, 2017

https://www.bloomberg.com/

Companies including Anglo American Plc and Sibanye Gold Ltd. dropped after South Africa increased the minimum black ownership requirement for local mines and set a 12-month deadline for compliance with the new rules.

The Department of Mineral Resources will raise the requirement from the current 26 percent to ensure more proceeds from the country’s natural resources flow to the black majority, Mining Minister Mosebenzi Zwane said on Thursday in Pretoria, the capital. The new minimum applies regardless of whether they have previously sold shares or assets to black investors that later divested.

Sibanye dropped 7.4 percent at 12:58 p.m. in Johannesburg, while Kumba was 6.2 percent lower. Anglo American declined 6 percent in London.

Tanzania’s Acacia Spat Shows Deepening Battle With Business – by Omar Mohammed (Bloomberg News – June 13, 2017)

June 14, 2017

https://www.bloomberg.com/

Tanzanian President John Magufuli’s escalating battles with business risk alienating the very investors he needs to drive his multi-billion dollar industrialization policy.

On Monday, the 57-year-old leader ratcheted up his dispute with miners by accusing Acacia Mining Plc of operating illegally in Tanzania and insisting the government is owed billions of shillings of unpaid taxes. It’s the latest in a series of broadsides against private investors who are being unnerved by his administration’s stance and its lack of consultation on policy. Shares in Acacia, which denies any wrongdoing, slumped as much as 16 percent.

“It’s negative that you have these uncertainties playing out in the market, especially at a time when you’re relying on growth and infrastructure development to be supported by private sector activity,” said Lisa Brown, a risk analyst at Rand Merchant Bank in South Africa.

COMMENT: Two committees, twice the bad news for Acacia – by Marilyn Scales (Canadian Mining Journal – June 13, 2017)

June 14, 2017

http://www.canadianminingjournal.com/

Followers of international mining news have read about the Tanzanian government’s beef with Acacia Mining which is headquartered in London, U.K.

Last month we learned that the report of a government committee says Acacia owes tens of billions in unpaid taxes. The committee estimated output from the Bulyanhulu and Buzwagi gold-copper mines is 10 times what the company reported and on which it paid royalties and taxes. The committee checked 277 containers of concentrate ready to ship from the mines, and it said there must be 250,000 oz. of gold in them. Acacia’s number is 26,000 oz.

All told, Tanzania says it has lost US$49 billion in royalties and taxes on gold-bearing concentrate exports from 1998 to 2017. The result is that Tanzania has blocked all exports of concentrate. Acacia has been exporting concentrate from Bulyanhulu since 2001 and from Buzwagi since 2010, and the company insists it has declared all the associated gold, copper and silver revenue.

Platinum Drop Fires Social Unrest as Villagers Turn on Mines – by Kevin Crowley (Bloomberg News – June 12, 2017)

June 13, 2017

https://www.bloomberg.com/

More platinum wealth lies beneath South African soil than anywhere else on Earth, and for decades the companies that extracted the precious metal promised to help improve the lives of the impoverished people who live above their mines. Those communities are getting tired of waiting.

Demonstrations by residents around mines — many living in improvised shacks without running water — have disrupted operations run by producers including Impala Platinum Holdings Ltd., Lonmin Plc and African Rainbow Minerals Ltd.

The protesters demanded jobs and money, saying that investments outside of the mines haven’t been enough. Last month, a bus that ferries Lonmin workers was torched, forcing the company to halt operations at two shafts.

Zimbabwe: The Sad Case of Leaving Minerals in the Ground – by Farai Maguwu (All Africa.com – June 9, 2017)

June 12, 2017

http://allafrica.com/

Zimbabwe is now a fully fledged resource cursed country where abundance of natural resources is not contributing to economic growth but rather to recession, depressed liquidity, human rights abuses and unmitigated land and water pollution.

Fresh from the farm invasions of the early 2000s, Zimbabwe shifted to extractivism not by design, but rather in response to China’s construction boom which heavily relied on raw materials from Africa, of which Zimbabwe became a major source.

The discovery of Marange diamonds in 2006 and the subsequent entry of obnoxious companies with strong links to the military in 2009 sealed the fate of Zimbabwe as a resource cursed company. Once the military tasted the quick returns of diamonds, they spread their tentacles to every extractable mineral and began negotiating several mineral deals with Asian syndicates who bring the much-needed capital to open new mines and further develop existing ones.

Tanzanian Government Accuses Acacia of Mining Gold Illegally – by Omar Mohammed, Helen Nyambura-Mwaura and Thomas Biesheuvel (Bloomberg News – June 12, 2017)

June 12, 2017

https://www.bloomberg.com/

Tanzania’s government accused Acacia Mining Plc of operating illegally in the East African country and said mining companies have been evading taxes. Acacia’s shares slumped.

An audit ordered by President John Magufuli in March found that Acacia had been conducting business in Tanzania “contrary to the law,” Nehemiah Osoro, chairman of a committee of academics, lawyers and economists that conducted the probe, said at a briefing Tuesday in the commercial capital, Dar es Salaam. The audit covered mineral exports over the past 19 years.

“We should summon them and demand that they pay us back our money,” Magufuli said after receiving the committee’s report. “If they accept that they stole from us and seek forgiveness in front of God and the angels and all Tanzanians and enter into negotiations, we are ready to do business.”

Race Is on to Mine Metal Powering Electric Vehicles – by David Stringer (Bloomberg News – June 8, 2017)

June 9, 2017

https://www.bloomberg.com/

The race is on to supply more of the cobalt needed for batteries in the fast-growing market for electric vehicles — and that means fresh competition for the big players Glencore Plc and the Democratic Republic of Congo.

A pipeline of projects is looming in places including Australia, the U.S. and Canada after cobalt prices more than doubled in the past year. Glencore produces almost a third of the world’s supply, mainly from the Congo, which is by far the biggest source, accounting for as much as 65 percent.

Among those backing new global developments are billionaire Anil Agarwal and mining tycoon Robert Friedland. They’re aiming to capitalize as a battery boom sends demand for cobalt soaring more than 30-fold by 2030, according to Bloomberg New Energy Finance.

U.S. COULD FUEL WAR IN AFRICA BY DROPPING CONFLICT MINERALS RULE ARGUE SENATORS, RIGHTS GROUPS – by Conor Gaffey (Newsweek Magazine – June 8, 2017)

June 9, 2017

http://www.newsweek.com/

The United States could fuel widespread violence and corruption in central Africa if it drops a rule requiring American companies to account for their use of conflict minerals, according to U.S. senators and rights groups.

A section of the Dodd-Frank Wall Street Reform and Consumer Protection Act passed under President Barack Obama in 2010 requires U.S. companies to disclose whether any of the minerals used in their products come from Democratic Republic of Congo.

The vast central African country is rich in rare and valuable minerals. Its untapped mineral reserves are estimated to be worth up to $24 trillion, according to the United Nations.Eastern Congo, the main battleground in Africa’s deadliest war between 1998 and 2003, has huge deposits of coltan, a metallic ore that is widely used in smartphones, laptops and other electronic devices.

Zinc, tin, nickel, platinum evoke most optimism at Junior Indaba – by Martin Creamer (MiningWeekly.com – June 8, 2017)

June 9, 2017

http://www.miningweekly.com/

JOHANNESBURG (miningweekly.com) – UK market intelligence firm CRU is most optimistic about the prospects for zinc, tin, nickel and, to a certain extent, platinum over a 12-month time horizon and named copper, bauxite, nickel and gold as good commodities to be in over the longer term.

CRU principal consultant Ben Jones told the Junior Indaba in Johannesburg on Thursday that he expected a divergence across bulk commodities and base metals. Jones formed part of a panel discussion led by Standard Bank mining head Sandra du Toit and participated in by Regarding Capital Management chairperson Piet Viljoen and Standard Bank mining research head Tim Clark.

Clark said heart had to be taken from the mining industry finding the bottom, after a period of cost cutting, and experiencing a rebound and a restart because the waning of supply had brought it into the present healthier state.

Cobalt ‘moving into a global deficit’ – by Trish Saywell (Northern Miner – June 7, 2017)

June 8, 2017

http://www.northernminer.com/

Cobalt prices have nearly doubled in the first quarter of the year as demand for its use in rechargeable batteries and the electric-vehicle market, in particular, is expected to take off. The Northern Miner spoke about the dynamics of the cobalt market with Edward Spencer, a senior consultant and head cobalt market analyst at the CRU Group in London.

Spencer joined CRU in 2015 as a senior consultant to CRU’s nickel, stainless steel and special alloys group, and has also worked on outlooks for molybdenum, nickel and ferrochrome. He has a PhD in economic geology from Imperial College London, where he specialized in the decoupled mineralization of base metals.

The Northern Miner: Where have cobalt prices ranged over the last year or so?

Edward Spencer: The price of 99.8% cobalt metal started at US$10.25 per lb. in January 2016 and ended the year at US$14.15 per lb. The prices have really ramped up in the first quarter of 2017, however, increasing from US$14.15 per lb. at the start of January, to US$27.75 per lb. at the end of March — nearly doubling over the three-month period.