03 May

South African Gold Producers Agree to Settle Lung-Disease Suit

Mining companies including Anglo American Plc agreed to settle a class-action lawsuit from workers who said they contracted deadly lung diseases in South African gold mines.

The agreement provides for compensation for all eligible workers suffering from silicosis or tuberculosis who worked in the companies’ mines at any point since March 1965, the parties said in a statement Thursday.

The six producers last year set aside about 5 billion rand ($396 million) to settle the lawsuit. The settlement will be submitted to South Africa’s South Gauteng High Court for ratification.

The workers say they were negligently exposed to large amounts of silica dust over decades, causing silicosis and pulmonary tuberculosis. South Africa’s mines, which have produced a third of all the world’s gold, have drawn in millions of poor, black workers from across the region in the 130 years since gold was discovered.

The mines remain among the world’s deepest and most dangerous even after the end of apartheid rule in 1994, before which safety standards and environmental restrictions were minimal.

There is no limit on the number of potential claimants, the parties. The agreement was reached following three years of negotiations and is the first class action settlement of its kind in South Africa.

“The parties to the agreement believe that a compromise settlement is far preferable for all concerned than an inevitably lengthy and expensive litigation process would be, allowing for claimants more quickly to receive compensation and relief for their conditions,” they said.

Anglo American, African Rainbow Minerals Ltd., AngloGold Ashanti Ltd.Gold Fields Ltd., Harmony Gold Mining Co. and Sibanye Gold Ltd. were represented by the Occupational Lung Disease Working Group. Spoor, Abrahams Kiewitz Inc. and the Legal Resources Centre represented the class members.

Source: https://www.bloomberg.com/news/articles/2018-05-03/south-african-gold-producers-agree-to-settle-lung-disease-suit

23 Apr

South Africa to Appeal Ruling on Black Ownership of Mines

South Africa has sought leave to appeal a court judgment earlier this month over a crucial black-ownership principle in the country’s Mining Charter, the nation’s mining lobby said.

The Chamber of Mines has been notified that Mineral Resources Minister Gwede Mantashe and the Department of Mineral Resources filed the application, it said in a statement Monday.

The High Court in Pretoria on April 4 ruled that the first two versions of the country’s charter didn’t require producers to top up black-shareholding levels in perpetuity if they previously met the minimum 26 percent requirement.

“The chamber is currently reviewing the specified grounds of appeal, although the DMR’s appeal appears to center on the majority judges obiter dictum comments about the legality of the 2010 charter and the enforceability of the charters,” the lobby group said.

The development is another volley in a longstanding legal battle to clarify the charter rules. The case was revived last year by the chamber, which sought a declaratory order on the so-called “once empowered, always empowered” principle.

The group has argued that companies can reach the black-ownership requirements by counting previous sales to black investors, even if those investors later sold their shares to whites or foreigners. The Department of Mineral Resources didn’t immediately return an email and call seeking comment.

South Africa has the world’s biggest reserves of platinum and manganese, and its mineral deposits also include gold, iron ore, coal, chrome and zinc. Anglo American Plc, Glencore Plc and South32 Ltd. are among companies operating in the country.

Malan Scholes Inc., a Johannesburg-based law firm, has made a separate application to declare current and previous charters unconstitutional because they lack definition and are inconsistent. The chamber opposes the view that the 2004 and 2010 charters are not valid and has agreed to join as a respondent to that application, it said.

Mantashe is holding talks with the industry, unions and mining communities on a new charter, a set of rules aimed at distributing the wealth of the industry more widely. Earlier this month, he said he’s confident that work on the charter will be concluded in May.

Source: https://www.bloomberg.com/news/articles/2018-04-23/south-africa-to-appeal-court-ruling-on-black-ownership-of-mines

18 Apr

Troubled Gupta Coal Mines Threaten South Africa With Power Cuts

South Africa’s state-owned power utility is working with the National Treasury to source more coal for seven of its plants that don’t have adequate supply, raising the specter of a return to rolling power cuts that have periodically slowed the economy since 2008.

 Eskom Holdings SOC Ltd. is diverting coal to the under-resourced stations from facilities that have sufficient supply, spokesman Khulu Phasiwe said on Johannesburg-based broadcaster SAfm.
The supply problems stem from mines run by Tegeta Exploration and Resources Ltd., a struggling company controlled by the politically connected Gupta family, he said.
“There are some difficulties — that’s the situation they’re managing now,” Phasiwe said of Tegeta. “From our side, we’re looking for a replacement supplier as soon as possible to make sure we don’t go back to the days of load shedding, especially as we’re going into winter,” he said, using a local term for rolling blackouts, which the country was forced to last implement in 2015 after seven years of power shortages hindered economic growth.
Tegeta is a company controlled by the Guptas through Oakbay Investments Ltd. and a son of former President Jacob Zuma.
In December 2015, it bought Optimum, which includes a mine of the same name, the Koornfontein operation and a stake in Africa’s biggest coal-export terminal, from Glencore Plc. Last year the company sought higher prices from Eskom for its coal.
Oakbay said in August that it agreed to sell Tegeta for 2.97 billion rand ($247 million) to Swiss company Charles King SA. The disposal was expected to be concluded in 12 months, Oakbay said at the time.
05 Mar

Why South Africa Is Ripping Up Its Mining Rules Again

South Africa’s mining industry is a prime example of the nation’s stark imbalances. Its highly paid, mainly white male executives oversee hundreds of thousands of mostly black workers labouring in deep and dangerous operations.

To spread the nation’s wealth more equally, in 2017 the government revised its mining charter to require that companies give more ownership to black shareholders.

The industry lobby group sued to stop this, saying that the changes were illegal and would deter future investment. Now, corporations, labour unions and mining communities are pinning their hopes on President Cyril Ramaphosa and his new mines minister to find a solution that everyone can live with.

1. Why were the rules changed in the first place?

Despite earlier versions of the mining charter designed to increase black ownership and benefits, the ruling African National Congress has said companies have still been too slow to share South Africa’s mineral treasures.

Former Mineral Resources Minister Mosebenzi Zwane, an ally of then-President Jacob Zuma, argued that more stringent regulations were needed to ensure “radical economic transformation,” a loosely defined concept championed by Zuma aimed at speeding up the redistribution of wealth. Zwane published his new Mining Charter on June 15.

2. What were the changes?

While some parts of the new rules were murky, it didn’t appear to include the “once empowered, always empowered” principle, which companies had relied on to count previous sales to black investors to reach a 26 percent black-ownership requirement, even if those investors later sold their shares to whites or foreigners. (There was disagreement about whether the principle applied in the previous versions.)

Zwane’s new rules also raised the ownership mandate to 30 percent. The chamber considers other contentious changes to include a requirement for holders of new mining rights to pay at least 1 percent of annual turnover to black shareholders, before and in addition to distributions to all shareholders.

To read the full article, click here.

26 Feb

Deal Wizard of South African Gold Mining Is Scaring Investors

Investors might be running out of patience with Sibanye Gold Ltd.’s colorful chief executive, Neal Froneman.

The South African miner’s stock plunged by a record 16 percent Thursday after the company warned it may consider selling assets, metals streams and — only as a last resort — new shares, if the recent strength in the rand persists.

Sibanye is under pressure to reduce debt after a rapid-fire series of deals that transformed the company from a staid and steady gold producer to a diversified precious-metals miner with both southern African and U.S. assets.

The company’s net debt is 2.6 times underlying earnings and almost as high as its current market value.

So far, investors have given Froneman, an industry veteran who earned himself the the nickname ‘Mr Fix-It’ for turnaround successes in the 1990s, the benefit of the doubt. But Thursday’s plunge suggests that might not continue forever.

“The biggest issue here is there is too much debt,” said Arnold van Graan, an analyst at Nedcor Securities. “We are seeing a lot of balance sheet risk building up if the rand-gold price stays where it is.”

South Africa’s rand has gained about 20 percent versus the dollar in the past three months, as investor optimism builds following leadership changes in the ruling party and President Cyril Ramaphosa’s appointment. Gold priced in rand has declined by about 14 percent in the same period.

Gold and platinum-group metals are sold in U.S. dollars, and while the majority of Sibanye’s gold and a substantial amount of the group’s costs are denominated in rand, its results and financial condition are affected if there is a material change in the value of the rand.

Sibanye gained 1 percent in Johannesburg Friday. The plunge in the company’s share price was overdone and it is still generating free cash flow, Morgan Stanley analysts said in a note. But the company’s debt level could present a challenge if the rand keeps strengthening.

To read the full article, click here. 

05 Feb

Culture Needs to Be `Less Alpha Male’: Africa Mining Update

Mining executives, investors and government ministers are meeting in drought-hit Cape Town for the African Mining Indaba, the continent’s biggest gathering of one of its most vital industries.

Recent multiyear highs for many commodities have the world’s biggest miners swimming in cash and new demand from electric vehicles mean once-overlooked metals like lithium and cobalt are grabbing the spotlight.

But it’s not all blue skies, as the industry grapples with regulatory changes and uncertainty in countries including the Democratic Republic of Congo and Tanzania, as well as host South Africa.

Here are the latest developments, updated throughout the day. (Time-stamps are local time in Cape Town.)

Mining Culture Needs to Be ‘Less Alpha Male’ (11:18a.m.)

The mining industry’s culture needs to become “less alpha male” and has a long way to go to create a workplace that includes women, said Mike Fraser, president and chief operating officer for Africa at Perth-based South32 Ltd.

From safety gear to facilities, the sector often doesn’t cater enough for women, he said. “Those kinds of conversations, whilst they are now emerging to the surface, are probably 20, 30, 40 years too late and I would say there’s still a significant amount of work we have to do.”

Ownership of South32’s South African energy-coal business will go beyond the government’s minimum requirements on black empowerment, Fraser said.

Rio’s Mines of the Future (10:45 a.m.)

Here’s a glimpse into how the world’s number two miner sees the future. Rio Tinto Group’s Bold Baatar, head of energy and minerals, said the company will be competing with the likes of Facebook Inc. and Google for workers as mining automation increases. Currently, two-thirds of Rio’s engineers are miners, but within a decade that number will be halved, he said.

He also echoed a popular point from the industry: governments often have too high expectations for the money to be made from mines and don’t factor in the costs.

Source: https://www.bloomberg.com/news/articles/2018-02-05/anglo-hopes-for-reset-button-in-s-africa-africa-mining-update

 

02 Feb

Ethiopia could be sitting on one of world’s great untapped gold deposits

To the west of Ethiopia near the Sudanese border lies a place called the Asosa zone. This may be the location of the oldest gold mine in the world. Dating back some 6,000 years, it provided a key source of gold to the ancient Egyptian empire, whose great wealth was famous throughout the known world. It may even have supplied the Queen of Sheba with her lavish gifts of gold when she visited King Solomon of Israel almost 3,000 years ago.

The excitement in this part of the world is more about the future, however. Some local inhabitants already make a living from prospecting, and several mining companies have been active in the area in recent years, too.

But what comes next could be on a much bigger scale: I have just co-published with my colleague, Owen Morgan, new geological research that suggests that much more treasure might be buried under the surface of this east African country than was previously thought.

Treasure trail

The Asosa zone is made up of flatlands, rugged valleys, mountainous ridges, streams and rivers. It is densely vegetated by bamboo and incense trees, with remnants of tropical rainforests along the river valleys. The zone, which is part of Ethiopia’s Benishangul-Gumuz region, is spotted with archaeological sites containing clues to how people lived here thousands of years ago, together with ancient mining pits and trenches.

Local inhabitants have long taken advantage of these riches. They pan for gold in Asosa’s streams and also extract the precious metal directly from outcropping rocks.

More substantial exploitation of the region’s riches dates back to the Italian invasion of the 1930s. The Italians explored the Welega gold district in West Welega, south-east of Asosa.

Haile Selassie, emperor of Ethiopia from 1930 to 1974, believed the country had the potential to become a global leader in gold. But when the revolutionary Derg government deposed him and the country plunged into civil war, gold mining disappeared off the agenda for a decade and a half. It took until the early 2000s before the government started awarding exploration licences.

Several mines are up and running, neither of them in Asosa. One is at Lega Dembi slightly to the east, owned by Saudi interests. The other, at Tigray in the north of the country, is owned by American mining giant Newmont, and just started production late last year.

More is already on the way: the beneficiary of the Italian efforts from the 1930s in Welega is the Tulu Kapi gold prospect, containing 48 tonnes of gold. This was most recently acquired in 2013 by Cyprus-based mining group KEFI Minerals (market value: roughly US$2.3bn).

As for Asosa, the Egyptian company ASCOM made a significant gold discovery in the zone in 2016. It published a maiden resource statement that claimed the presence of – curiously the same number – 48 tonnes of gold. Yet this only looks like the beginning.

Read more here: How We Made it in Africa

 

05 Dec

Sierra Leone ‘Peace Diamond’ Undersells for Over $6 Million At Auction

A Christian pastor had given away the more than 709-carat diamond so the government could fund local development projects. Officials hope its sale will also help combat illicit smuggling in the modern industry.

Sierra Leone sold one of the world’s largest diamonds at an auction in New York on Monday, fetching a lower-than-expected price of $6.5 million (€5.5 million).

The egg-sized, 709-carat “Peace Diamond” is one of the largest ever discovered in Sierra Leone and between the 10th and 15th largest ever found.

The international diamond trading network that handled the auction, the Rapaport Group, said the stone had gone to British billionaire and jeweler, Laurence Graff.

Diamond for peace

The stone was dubbed “Peace Diamond” after the Christian pastor who found it gave it away in the hope it would allow the government of Sierra Leone to raise money for local development projects.

The government said Monday it will use the $3.9 million in tax revenue from the sale to fund clean water, electricity, schools, health centers and roads.

Officials said they also hoped the sale will help combat the West African country’s illicit diamond trade.

“Peace diamond” plays on the term “blood diamond,” which were diamonds rebel groups sold during Sierra Leone’s brutal civil war in the 1990s to buy arms and ammunition. In many cases, groups used slave labor to mine the stones.

The UN enacted a ban on all diamond exports from the country until 2003, but illicit smuggling continues to mark the modern diamond trade.

‘New day in Sierra Leone’

The government had expected the stone, the first ever to be sold at a public auction, to fetch $7 million.

Senior officials were nonetheless optimistic about the sale’s effects on the illicit diamond trade in Sierra Leone.

“It will encourage all the diggers back home,” said Chief Paul Ngaba Saquee, head of Sierra Leone’s eastern Kono district where the diamond was found.

“Instead of being ripped off in some dark corners when they find their diamonds, that they will bring it and put it on the table in front of the government,” he said, adding: “Maybe this is going to be the beginning of a new day in Sierra Leone.”

Source: http://allafrica.com/stories/201712050002.html

14 Aug

Nigeria: Prepare for Life After Oil, Govt Advises Amnesty Beneficiaries

oil

Port Harcourt — As the world marked the United Nations 2017 International Youth Day saturday, the federal government has warned youth in the country, especially beneficiaries of the amnesty programme in the Niger Delta region to prepare for life after oil.

Speaking at a forum to mark the event in Port Harcourt, the Presidential Adviser on the Amnesty Programme, Gen Paul Boro, called on the Niger Delta youths to prepare for life after oil by making use of the skills, knowledge and experience they gained while undergoing training.

The forum was put in place by a non-governmental organisation (NGO), Nevido Media in collaboration with the NOA with the support of the Nigerian Youth Council and other bodies.

Boro called for paradigm shift in thinking and focus among the youths and beneficiaries of the amnesty, saying, “since it has become clear that oil will not last forever, there is need to prepare the youths for the future.”

He noted that the federal amnesty programme had the mandate to train 30,000 youths, out of which it had already trained 16,000.

Represented by the Head, monitoring and evaluation in the federal amnesty, Mr. Bestman Probel, Boro explained that this was why “the youths have been drawn into training in agriculture and skills while an exit programme whereby the youths after training are mobilised to start practicing the trade they learnt”.

In his remarks the Rivers state Director of NOA, Mr. Oliver Wolugbom, expressed concern that Nigerian youths have abandoned the old cherished value system and taken to kidnapping, cultism, armed robbery, thuggery and other odious practices that debase humanity.

“It is equally a source of concern that all the centrifugal forces such as separatist movements by ethnic bodies and their accompanying hate speeches are being bandied by the youths”, he said, adding that for peace to be built in the society, the youths must be properly positioned while the leadership re-strategise to plan

From allAfrica

14 Aug

Africa’s Working-Age Population to Grow By 450 Million in 20 Years

working-age population

The working-age population in Africa is projected to grow by about 70 per cent or 450 million over a period of 20 years, spanning 2015 to 2035, said the Africa Competitiveness Report 2017. To date, Africa, which has Nigeria as one of the most populated, is inhabited by 1.246 billion people. The population had grown by about 550 million, nearly doubled to 1.2 billion over 30 years, from 1985 to 2015, and now to the current level.

The recently released ACR 2017, which was prepared by the Africa Development Bank, World Economic Forum and World Bank, noted that, going by the current trends, only about 100 million of the 450 million increased population would be able to find stable employment opportunities by 2035.

According to the report, “Countries that are able to enact policies conducive to job creation are likely to reap significant benefits from this rapid population growth. Those that fail to implement such policies are likely to suffer demographic vulnerabilities resulting from large numbers of unemployed and/or underemployed youth. New research is providing governments in the region with insights into how they can address the coming rise in the working-age populations.”

In its analysis, the ACR noted: “From 2004 to 2014, employment grew by only 1.7 percent in total–an average of less than 0.2 percent a year. This level of job creation has been barely sufficient to absorb the approximately 100 million additional African workers aged 20-59 who entered the job market in this period, which meant that the formal unemployment rate remained virtually unchanged amid continuing high rates of informal and vulnerable employment.

“Over the next decade, both GDP and the working-age population are expected to increase by about 3 percent per year. If it was possible to increase employment by only 1 per cent in the past decade, when GDP growth was higher, it could be harder to add jobs over the next few years when economic performance is expected to be softer. Looking ahead, the main question for Africa will be how to improve its competitiveness while absorbing a continuously expanding labor force in a scenario of lower growth.”

The report posited that, it was imperative for African countries to find ways to expand aggregate demand for labor and improve supply-side factors at the same time. “Beyond the traditional prescriptions–such as stable macroeconomic policy, a supportive investment climate, and improving the quality of human and physical capital–countries can facilitate more rapid and better job creation as well as accelerate the development of their manufacturing sector by implementing policies suited to their specific circumstances.”

It added: “Since almost all new jobs in Africa today are in agriculture and microenterprises, improving the business environment in these sectors is a high priority. Fragile countries can create jobs as well as promote growth and stability through targeted support to vulnerable regions and/or populations. Open trade policies and developing value chain links to extractive sectors are crucial for encouraging diversification and job creation in resource-rich countries. Finally, policies that foster regional trade and integration can be a major source of new jobs as well as improve firm-level productivity and economic competitiveness.”

Pointing out that this edition of the Africa Competitiveness Report came at a time of reduced enthusiasm about African growth prospects, the ACR expressed regret that, “The robust expansion experienced by the region over the past two decades may not continue over the next few years, reducing expectations about the continent’s employment outlook.”

“Since the publication of the last Africa Competitiveness Report in 2015, the region’s growth prospects have been affected by multiple external shocks: for example, oil exporters such as Nigeria have begun to be affected by lower oil prices over the past few years, and other mineral exporters, such as South Africa, have been hit by the slowdown of emerging economies, especially China,” the report pointed out.

Stating that, “Growth is expected to pick up in 2018 but will most likely remain below 4 per cent over the next few years,” the ACR 2017 recalled that, from 2004 to 2014, the region as a whole averaged a growth above 5 per cent a year, but it is now about 2.2 percent.

“Over that same period, growth of GDP per capita, however–the main indicator of economic development–was well above 5 per cent only between 2004 and 2007. Relatively few jobs have been added to African economies over almost 20 years of strong output expansion, mainly because of an overreliance on the primary sector (mineral extraction and agricultural products), little diversification, and low productivity,” it added.

from allAfrica