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PRICE INCREASE NOTICE

Dear Valued Customers,

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

Price Increase 1st Nov 2017

Kind Regards,

Ropa Mhlanga

Operations Director – Southern African Region

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

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

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

Continued reciprocal trade between S Africa, Australia predicted

Despite the current economic climate in South Africa and the global downturn in mining, owing to low commodity prices, South Africa and Australia will continue to build their reciprocal trade relationship, says law firm ENSafrica.

“South Africa is Australia’s biggest trading partner on the African continent and Australia has more mining projects in Africa than anywhere else in the world,” ENSafrica mining director Lloyd Christie tells Mining Weekly.

He adds that Australia looks westward for investment opportunities and recognises South Africa as its port of entry into Africa and the Southern African Development Community, which includes 15 African countries. “Australia continues to build on a constructive and mutually beneficial business relationship with South Africa.”

South Africa and Australia have similar legal systems, business cultures and practices, as well as accounting practices; and both countries are also well endowed with mineral resources and technical expertise, says Christie.

 These common traits make it easy to facilitate trade and, with the two countries forming the Australia–South Africa Joint Ministerial Commission in 1997, collaboration has increased ever since, he elaborates.

To aid continued collaboration, the Australia–Africa Minerals and Energy Group was established in 2010 to facilitate active engagements between the continents’ mineral resources industries.

Christie points out that, according to employers organisation the Australian Industry Group, there has been a 10% yearly average increase in trade between South Africa and Australiain the past five years.

“This serves as motivation to reinforce the relationship with Australian counterparts and continue attending events that facilitate trade.”

Therefore, ENSafrica will attend the annual Africa Down Under conference for the second time from September 6 to 8 in Perth, Western Australia, to interact and network with clients and investors, and learn about the latest developments in mining in Australia and Africa.

Further, Christie says legal certainty, which is an issue in some African countries, is often a consideration for investors, especially foreign investors such as Australia, when deciding to enter new markets.

“Africa’s labour unrest and factious industrial relations might also scare off mining investors. But, with the global miningindustry having to endure depressed commodities markets for many years, volatility is a natural consequence in any mining jurisdiction.”

He adds that declining commodity prices and profit margins can, ultimately, put strain on employee circumstances, as companies threaten retrenchment and are unable to increase wages. This is not unique to Africa, and is typically not an environment conducive to investment.

Regardless, there are still indicators of continued interest and investment in South Africa and other African countries, says Christie.

ENSafrica mining director Ntsiki-Adonisi Kgame says Australian mining companies still remain significant employers in Africa, which also encourages innovation and skills transfer between the involved countries.

“We’ve seen skills migration from South Africa to Australia, especially in terms of deep-level mining expertise. Australiahas recognised South Africa’s proficiency in this regard and has benefited from that skills transfer.”

ENSafrica plays a significant role in representing South African and Australian mining entities – such as diversified miners BHP Billiton and South32 – when navigating mergers, legislation and general trade issues regarding mineral resources.

 

Source: Mining Weekly

 

 

 

NUM, ANC ‘very encouraging’ – Royal Bafokeng Platinum

Royal Bafokeng Platinum CEO Steve Phiri said on Tuesday that he was “very encouraged” by the stance taken the day before by the National Union of Mineworkers (NUM) and the ruling African National Congress (ANC).

“We can only improve the situation if we work together and not against each other,” Phiri outlined to Mining Weekly Online in an interview after the company reported a R31.9-million loss in the first six months of this year. (Also watch attached Creamer Media video).

“We’re very encouraged by the statements released by ANC yesterday and this morning, which raises serious concern about the damage Mining Charter Three does to the mining industry and the economy of this county.

“We hope that we’ll see something different in a few days, few weeks, few months to come,” said the head of the 52% black-community-owned Johannesburg Stock Exchange-listed platinum mining company.

On Monday, NUM expressed fears that the South African mining sector, which had already shed more than 80 000 jobs over the past five years, would shed tens of thousands more jobs and called for the resignation of Mineral Resources Minister Mosebenzi Zwane, citing a complete breakdown in relations.

Phiri described as “very encouraging” the supportive comments of ANC Secretary General Gwede Mantashe, who in an interview with Radio 702 host Xolani Gwala referred to the private sector, the government and the ANC as being economic partners.

LOSSMAKING PLATINUM SECTOR

In the tough economic environment which has resulted in 70% “or more” of the platinum industry being lossmaking, Royal Bafokeng Platinum has been forced to respond by discontinuing mining upper group two (UG2) reef at the Bafokeng Rasimone Platinum Mine’s (BRPM’s) South Shaft, restructuring to match to the declining South Shaft resource, lowering unit costs to below the consumer price index, increasing tonnes milled by 14.3% and holding down year-on-year unit costs at BRPM.

Capital expenditure (capex) at the Styldrift 1 expansion, on which R7.23-billion has been invested to date, has been tailored to a 150 000 t a month ramp-up in the last quarter of 2018.

Company funding has been bolstered by the raising of a R1.2-billion convertible bond and the concluding of debt facilities totalling R2-billion.

Against this arduous backdrop, Phiri, who leads a 52% black-owned company, has refused to mince his words in condemning South Africa’s legislative and mining policy environment.

“We certainly can do better without the value-destructive Mining Charter Three. How the industry is supposed to understand and comply with it defies any stretch of the imagination,” said Phiri, 61, a former public prosecutor, who decried the document as “shabbily drafted, confused and ambiguous”.

He reminded the government that many still toiling in the mining industry had also helped to transform the sector by playing key roles in the formulation of the Mineral and Petroleum Resources Development Act in 2002 and 2003 – “from nothingness, where the industry gave up private ownership of mineral rights, and shareholders sacrificed equity without any compulsion”.

The first and second mining charters also came about by participants willingly shedding value through negotiation.

He condemned those latecomers who now condemned such trailblazing transformers as being anti-transformational.

As a crucial Constitutional imperative, transformation should come by way of a charter that was realistic, achievable and sustainable and not something that caused economic downfall.

“Transformation should not, as a matter of principle, be used as a populist football. We should not produce an unrealistic and unachievable piece of work and sugar-coat it as transformation, when it is so bitter and unpalatable to the core.

“It will implode on us, certainly. The industry will fall flat, capital will be chased away and so will growth remain a myth. Jobs will be lost.

“We hope that, in the end, wisdom will prevail and a realistic charter, with realistic targets, will be achieved through honest and meaningful engagement,” he said.

STYLDRIFT PROJECT

Royal Bafokeng Platinum reported a 70% increase in tonnes delivered from Styldrift, an 8.9% improvement in tonnes milled per employee, a 9.4% increase in four-element (4E) metals in concentrate and zero fatalities in the six months to June 30.

The low price environment resulted in a 9.8% reduction in average rand revenue basket price, earnings before interest, taxes, depreciation and amortisation being cut by two-thirds to R100.4-million from R305.3-million in the same period last year, and headline earnings per share collapsing to 15.3c a share from 77.8c in the corresponding period of last year.

But despite the stringency, the company remained steadfast in spending R15.9-million in the half-year on its social and labour plan commitments, which was up on last year’s R13.8-million.

Moreover, 86.3% of its total discretionary procurement spend was with historically disadvantaged companies.

The closure of the nonprofitable South Shaft UG2 production sections and redeploying 60% of the UG2 mining crews to superior-margin Merensky at South and North shafts and UG2 production at North Shaft has enabled the company to maintain current levels of platinum group metals production but with the enhanced effect of the base metals revenue that accompanies Merensky production and optimised processing arrangements equating to
R37-million a year.

Net revenue decreased by 3.2% from R1 646.9-million in the first half of 2016 to R1 593.9-million for the first half of 2017.

The company’s gross profit margin reduced from 11.4% for the first six months of last year to 0.7% for the six months ended June 30 this year on the 3.2% decrease in net revenue and the 8.5% increase in total cost of sales.

Total capex for the period under review increased by 63.8% to R847-million on the first half of last year.

Replacement capex fell by R33-million to R10-million and expansion capex increased by 86.1% to R778-million on the acceleration of construction at the Styldrift I project.

Stay-in-business capex increased by 5.4% to R59-million.

The total mining scope of the BRPM Phase III replacement project has been completed with only construction activities related to services, conveyor belts and associated bulkheads on 14 and 15 levels remaining.

A technical planning review of the Phase III extraction schedule has indicated that these levels will only be required to come on line during the second quarter of 2019, allowing capex to be deferred to 2018 without any negative impact on extraction.

During the reporting period, a total of 3 328 m of capital development was completed on 600 and 642 levels of Styldrift I, with 238 000 t of ore being delivered to the concentrator at a built-up head grade of 2.53 g/t 4E.

Key construction activities being undertaken include overland belt construction, services shaft equipping, ventilation shaft No 3 construction, silo No 3 and No 4 construction, 600 Level permanent trackless workshop and ancillary service bays construction, settler No 1 slip and line activities and conveyor belt construction on 600 and 642 levels.

In line with project execution resource requirements, there are 23 mining and construction crews operational on site.

MARKET REVIEW

The platinum price started the year close to $900/oz., rose to above $1 000/oz. in February, but subsequently weakened to end the first half not far above where it started the year. The rand remained relatively strong against the US dollar in the first half of 2017 at around R13.20. This led to platinum prices in rand terms dipping below R12 000/oz. on a number of occasions during the first half of 2017, to lows not seen since November 2015.

Platinum production is forecast to be 2.5% lower this year as both primary and secondary supply ease. Primary supply is estimated to be down 2% year-on-year on lower output from Southern Africa. Secondary supply is expected to contract as lower recycling of jewellery in China is likely to more than offset a modest recovery in auto catalyst recycling.

However, lacklustre platinum prices are reflecting limited buying by end-users as overall demand, excluding investment, is forecast to soften year-on-year.

Western Europe remains the largest diesel market, but diesel market share continues to decrease, particularly in the small car segment.

Diesel share in larger cars remains relatively stable, while in heavy-duty vehicles, diesel is currently the only viable option.

Purchasing of platinum by Chinese jewellery fabricators in platinum’s largest market has not improved from a weak 2016. Platinum trading on the Shanghai Gold Exchange in the first half of 2017 was a third lower than in the first half of 2016, although this reflects industrial as well as jewellery demand.

Investment demand has been steady so far this year with platinum exchange traded funds (ETFs) adding 83 000 oz in the first six months, resulting in global ETF holdings increasing to about 2.6-million ounces. Platinum bar purchases were low in the first quarter owing to the high platinum price. However, weaker prices during the second quarter lifted buying.

Overall, the industrial market balance is projected to be in a modest surplus in 2017. If the platinum price remained weak in the second half of the year this would raise the risk of closures of unprofitable mining areas which could move the market closer to balance.

Palladium started the year trading at $676/oz and although volatile, the price continued to trend higher through the first six months of the year. Temporary tightness in palladium ingot availability resulted in the price briefly pushing through $900/oz in June before it eased back to end the month at $842/oz, up 25% for the year to date.

Palladium demand is expected to be little changed in 2017 as a slight increase in auto catalyst demand is offset by small declines in jewellery and industrial usage.

The rhodium price has continued its recovery in 2017, rising 35% to $1 040/oz during the first half of the year. However, while the price may have improved, the market still remains well supplied. Removal of unprofitable ounces from the market could move the market close to balance or into slight deficit.

 

Source: Mining Weekly

Price Increase Notice

Dear Valued Customers,

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

Price Increase 15th August 2017

Kind Regards,

Ropa Mhlanga

Operations Director – Southern African Region

PRICE INCREASE NOTICE

Dear Valued Customers,

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

Price Increase 19th July 2017

Kind Regards,

Ropa Mhlanga

Operations Director – Southern African Region