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Delays at Durban MPT Due to Severe Storm

Dear Valued Customers,

Please click on the following link for the details regarding the delays:

Delays at Durban MPT

Kind Regards,

Management

Rip up charter, provide tax incentives, back junior miners – Maimane

Mining Charter Three should be ripped up, proper tax incentives introduced and junior mining enterprises supported to restore investment in the mining industry, which is a stimulator of the South African economy as a whole, Opposition Democratic Alliance leader Mmusi Maimane said on Wednesday.

Delivering a keynote address on the first day of the fifth Joburg Indaba conference, Maimane said it is an indictment against South Africa and the mining industry that the country’s last significant diamond discovery was at Venetia 40 years ago.

He noted that Canada and Australia had far more listed mining companies than South Africa and the vast majority of these were relatively small mining companies.

He said Johannesburg should be the big mining capital and not Perth, but it was not, because South Africa had shut the door on new mining development through discouraging policy.

New mining developments were virtually non-existent despite thousands of mining rights having been issued to people with no interest or expertise.

“This is how we kill an industry,” he said, adding that in countries other than South Africa investors are able to gain mining right information online.

Ninety per cent of mining students are black and they should be the mining entrants of the future.

In the early eighties, mining contributed 21% to South Africa’s gross domestic product (GDP) but currently both mining and manufacturing have dropped out of the top three, with mining contributing only 5% of GDP.

 

Source: mining weekly

PRICE INCREASE NOTICE

Dear Valued Customers,

Please click on the following link for the latest price increase notice:

Price Increase 1st Oct 2017

Kind Regards,

Ropa Mhlanga

Operations Director – Southern African Region

NUM, Solidarity sign three-year wage agreement with Assmang

Trade unions the National Union of Mineworkers (NUM) and Solidarity have secured a three-year wage agreement with iron-oreand manganese miner Assmang at its operations in the Northern Cape.

Assmang, a joint venture between Assore and African Rainbow Minerals, operates the Khumani iron-ore mine, the Beeshoek iron-ore mine and the Black Rock manganese mines.
The agreement will see lowest-earning mineworkers across the operations receive an 8% increase in the first and second year and 7% in the third year.

The lowest paid employee currently earns R15 284.88 on a total package, which will increase to R16 507.67 on the 8% increase in the first year, the NUM said in a statement on Tuesday.

The agreement also outlined the payment of a one-off R10 000 tax-free cash allowance for the members, an increase in family responsibility leave to five days and maternity and medical-related travel assistance provisions.

Assmang will also pay an underground allowance of R600 a month for the first year, R650 for the second year and R700 for the third year.

 

Source: Mining Weekly

2 500 jobs at risk at lossmaking Impala Rustenburg

South Africa’s second-largest platinum mining company has initiated a process that may lead to 2 500 staff reductions at its lossmaking Impala Rustenburg operation, where financial sustainability has deteriorated significantly in recent years.

The Johannesburg Stock Exchange-listed Impala Platinum(Implats) said on Monday that it had issued a notice to relevant employee representative groups, government authorities and other stakeholders of its initiation of a Section 189 consultation process in terms of the Labour Relations Act, aimed specifically at ensuring the sustainability of the Impala operations, which currently employ some 31 000 people.

The company, headed by CEO Nico Muller, is experiencing severe financial pressures largely as a result of persistently low metal prices in rands and continued production cost increases.

At the same time, Impala Rustenburg is encountering declining labour productivity rates, with production falling from an historical base of some 1 000 000 oz of platinum a year to the 680 000 oz to 720 000 oz forecast for the current financial year ending June 30, 2018.

“Unfortunately, we’re now left with no further option in the prevailing operating environment but to consider further restructuring processes that may lead to a reduction in the number of employees,” Muller said in a release to Creamer Media’s Mining Weekly Online.

While 2 500 jobs could be affected in the near term, further optimisation processes may also be required in future to ensure the continued sustainability of the operation.

“It must be emphasised that no final decision has been taken as regards the proposed restructuring, and no final decision will be taken prior to full and proper consultation with affected employees, and their representatives, in compliance with the Labour Relations Act,” added Muller, who told Mining Weekly Online that important steps to effect greater strength of leadership within the Impala Rustenburg operation had already been taken.

Implats reported last week that it was in the first phase of the review of an intended restructuring of Rustenburg after its headline earnings per share plunged to a 137c a share loss in the 12 months to June 30.

Ongoing cost saving and optimisation initiatives had been implemented in an attempt to restore profitability and secure continued employment as far as possible.

A priority target of returning Impala to a cash neutral position by 2019 has now been set assuming the current low platinum price environment remains as is.

This incorporates an assessment of each shaft and production area and will result in a mining complex that is likely to be somewhat different to the large and intricate current operation and may lead to the disposal or suspensions or harvesting of marginal and lossmaking shafts.

Impala’s leadership has been strengthened and realigned to ensure that a fit for purpose team is in place to drive performance, to increase production volumes, and improve efficiencies and productivity.

On the cards is the rebuilding of the entire operating methodology and culture at Rustenburg, where delegation of authority and accountability to lower levels is anticipated.

Currently decision-making is seen as being excessively centralised, with the changes already undertaken giving rise to early signs of improvement.

 

Source: Mining Weekly

Numsa union demands 15% wage hike in coal sector

JOHANNESBURG – The National Union of Metalworkers of South Africa (Numsa) has demanded Glencore raise coal mining wages by 15%, Numsa said on Tuesday, almost triple the inflation rate of 4.6%.

Numsa also said it was pushing for an increase of 20% in all allowances. The union is scheduled to meet with the Chamber of Mines on Tuesday to discuss wages.

 

Source: Mining Weekly

Acacia enters into gold protection measures

LSE-listed Acacia Mining has bought put options covering 210 000 oz of gold at a strike price of $1 300/oz as it continues implementing ongoing cash outflow mitigation measures.

The group on Wednesday announced that the $3.2-million option provided a minimum price for the majority of the group’s expected doré production for the next six months above the budgeted gold price of $1 200/oz, along with full upside exposure should the gold price continue to trade above $1 300/oz.

The options will expire in equal instalments of 35 000 oz a month over the period.

This followed the reduction of operational activity at its Bulyanhulu mine, in Tanzania, earlier this week, owing to the pressures of unsustainable cash outflows at the mine owing to the ongoing concentrate ban, which was imposed on March 3.

At the time, Acacia had highlighted the negative impact of Tanzania’s gold and copper concentrate export ban, resulting in a concentrate inventory build-up of about $265-million and a negative cash flow of around $15-million a month.

Over the next three months, Acacia will focus on moving the mine to a reduced operational state, undertaking consultations with its stakeholders and ceasing underground activity, with the processing of underground ore to be halted within the next four weeks.

Despite several mitigating interventions, the loss of revenue, together with an outflow of $65-million in indirect taxes and costs from other changes to the operating environment, has led to a significant cash outflow of about $210-million in the 2017 year-to-date.

 

Source: Mining Weekly

Zambian copper production to grow by 7% this year, despite power challenges

JOHANNESBURG (miningweekly.com) – The Zambian government’s support for the mining industry and strong copper prices are expected to drive growth in the country’s copper production for this year, despite ongoing power shortages.

BMI Research on Monday pointed out that, according to data published by the Zambian central bank, Zambia’s copper production reached 362 000 t by June 30, down slightly from the 367 000 t produced in the first half of 2016.

“No details have been given by the Zambian authorities on this decline, but it is likely that Zambia’s ongoing power supply problems have been the key constraint on copper mining activities,” BMI said.

“We are positive on Zambian copper and maintain our forecast of 7% growth this year as Zambian President Edgar Lungu remains supportive of the sector, and rising copperprices incentivise domestic miners to ramp up production during the second half of the year.”

Ongoing power shortages resulting from the country’s dependence on hydropower and rising water tariffs are the key risks facing the Zambian mining sector moving forward.

In August, two of the country’s biggest copper producers, Glencore and First Quantum Minerals, were forced to reduce power at key operations, owing to tariff disputes with electricity provider Copperbelt Energy Corporation.

However, improving rainfall and rising dam levels in the country will ease some of power shortages experienced in recent quarters.

Another key driver of strong Zambian copper production this year will be the positive trajectory of prices in 2017 relative to last year.

Since touching lows of $4 500/t in June last year, copper prices have risen over 57% to $6 810/t in August owing to strong demand from China.

“While it is possible that prices may unwind from current levels towards the end of the year, we think the gradual uptrend over the last 12 months will bode well for mining activity in Zambia.

 

Source: Mining Weekly

Kumba Iron Ore, union reach wage deal

JOHANNESBURG – South Africa’s Kumba Iron Ore, a unit of Anglo American, and a major union have signed a three year wage deal giving workers an increase of much as a 10% a year, the National Union of Mineworkers (NUM) said on Friday.

NUM, which is the majority union at all of Kumba’s operations, said workers would get an annual pay rise ranging between 7% to 10%.

The parties also agreed a once off payment of R25 065 ($1 905) for all employees covered by the agreement.

NUM in May tabled wage hike demands of 12.5% to 16% with Kumba.

The pay deal is good news for the troubled mining sector in South Africa. Investors have been rattled in recent months by labour unrest, policy uncertainty and depressed commodity prices.

Coal producers and unions agreed in June to retain a collective bargaining framework for wage talks in 2017, defusing friction after NUM threatened to go on strike if mining firms negotiated on a company-by-company basis.

Source: Mining Weekly

Platinum, palladium, rhodium on 3-way price parity path – Northam

The platinum group metals (PGM) market may be heading for three-way price parity, Northam Platinum CEO Paul Dunne pointed out when the company presented a 60% rise in operating profit to R614-million in the 12 months to June 30, reflecting the benefits of the company’s growth strategy, mechanisation at the Booysendal mine and improved palladium and chrome prices.

A higher PGM basket price and higher chrome revenue translated into a 44%-greater year-on-year group cash profit of R5 314 per equivalent refined platinum ounce, on a sales revenue of R6.9-billion. (Also watch attached Creamer Media video).

Dunne remains confident that, over time, PGM demand will grow and supply will shrink, resulting in a more positive price environment for PGM metals.

The company’s mechanised Booysendal – which has an operating margin of 17% – produced well above its nameplate capacity at just under 200 000 oz, with progress at the Booysendal South project adding promise.

Despite labour unrest at the Zondereinde mine, output of 280 172 oz was within a hair’s breadth of last year’s 282 765 oz, at an operating margin of 3.6%.

“The company represents the best risk-adjusted return in the platinum sector,” Dunne told Creamer Media’s MiningWeekly Online at an investor and media briefing where he
emphasised the importance of cost control to maintain the company’s competitive position “in this very difficult market”.

Group costs of R19 736/oz of platinum were 4.6% higher, while perating cash flow increased by 17% to R981.5-million and the cash balance at year-end was R1.8-billion, CFO Ayanda Khumalo reported.

While the platinum price struggles below the $1 000/oz mark, the higher palladium price has provided some support for the basket price as price movements suggest a move towards three-way parity with rhodium.

“However, we must say that overall price performance remains lacklustre and continues to be a source of great concern to our sector,” cautioned Dunne, who described the negative sentiment towards platinum and PGMs in general and the emphasis on the emergence of battery electric vehicles as being overdone.

“Today’s internal combustion engines are clean, efficient and economic to run. In our view, the adoption of battery technology will remain constrained owing to the inherent fundamental chemistry of the battery itself,” he commented.

Capital expenditure (capex) is estimated at R1.3-billion in this financial year, comprising R109-million on sustaining capex and R1.2-billion expansionary capex as Northam grows production down the cost curve, both organically and through acquisition.

Acquisitions include the Tumela block’s mineral resourcesfrom Anglo American Platinum for R1-billion; the acquisition of Eland Platinum mine from Glencore Operations South Africa for R175- million; and subsequent to year-end, the PGM recycling assets in Pennsylvania, US, from A-1 Specialised Services for $10.7-million.

At operational level, the company’s record three-million fatality-free shifts at Booysendal reflect the benefits of the mechanised mining method, with a graphic flashed on to a large screen showing the huge magnitude of safety difference between the conventional Zondereinde and the mechanised Booysendal.

Milled tonnage for the combined operations increased by 6.3% to 4.4-million tonnes, largely on the back of growth at the mechanised Booysendal.

The production of chrome in concentrate increased by 8% to 581 000 t on higher upper group two (UG2) tonnage milled at Booysendal and chrome has become “a very important segment for Northam”. Total revenue per platinum ounce has increased 11% owing to higher chrome and palladium pricing.

The higher production failed to translate into a similar increase in sales volumes, but this will end with the commissioning by year-end of the new furnace at the Zondereinde smelter, where a new drying plant and furnace have to date absorbed capex of R671.6-million.

Capex in the current financial year is expected to reach the R1.3-billion mark, with R109-million of it sustaining and the rest expansionary.

The operational outlook for Northam is healthy. It has a stable production base at Zondereinde and a growing production profile from Booysendal, which is on a particularly strong position on the cost curve.

It is envisaged that Zondereinde will benefit from the Tumelaacquisition over the next three years, raising its production profile to 350 000 oz.

Booysendal South is expected to boost the total Booysendal production profile to 500 000 oz, with the Eland operation contributing 150 000 oz on a five-year ramp-up.

As the company still has a large capital expansion programme ahead of it, project execution will be key to meet the its rising market expectations.

 

Source: Mining Weekly