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mine

SIBANYE-STILLWATER SAYS SITUATION DIRE AS IT LOOKS TO RESTRUCTURE

JOHANNESBURG - Sibanye-Stillwater says the formal restructuring process it has started is expected to last three months.

Sibanye has warned that close to 6,000 miners are in danger of losing their jobs after it recorded losses worth R1 billion at its gold operations in 2018.

However, unions have vowed to fight any threats of retrenchments at Sibanye-Stillwater.

Sibanye says it will look at measures to avoid and mitigate retrenchments in its gold mine operations.

The company has also been plagued by a three-month-long strike by members belonging to the Association of Mineworkers and Construction Union (Amcu) who are calling for higher wages.

Sibanye spokesperson James Wellsted says the situation is dire.

“If we don’t do this, the losses that we’re experiencing at these operations could reduce the lives of other profitable operations because that money can be invested in the sustainability of other operations, which now is spent at loss-making operations.”

The company is also expected to announce losses of up to a billion rand in its financial results next week.

Gideon du Plessis, the general secretary of Solidarity, says they’re communication with Sibanye to find alternatives to job losses.

Meanwhile, Amcu has vowed that it will fight any planned retrenchments at Sibanye-Stillwater.

 

Source – EWN

 

Zambia’s president gives Ministers two weeks to change mine tax

Zambia’s president Edgar Lungu directed his Finance and Mines Ministers to change by 8 April a new tax system that companies have said would lead them to shut mines. Lungu asked Mines Minister Christopher Yaluma and Finance Minister Alexander Chikwanda to consider option to resolve the impasse. These include negotiating interim tax deals with the individual mines most affected, modifying existing laws, deferring the new regime or temporarily reverting to the old mine tax as a new one is negotiated, he said in an emailed statement last week.

“Dialogue between my government and the mines shall continue,” said Lungu, who was elected in January. The Ministers must make recommendations to Cabinet by the April 8 deadline.

Lungu did not say when any changes would come into effect.

Under a law passed in January, royalties more than tripled to 20% for some mines. This will cause 12000 job losses and shutdowns, according to the Chamber of Mines in Africa’s second-biggest copper producer. The system will disrupt government’s objective of increasing revenues from companies including Glencore and Barrick Gold.

It also threatens to cut growth in an economy Fitch Ratings forecasts will expand at the slowest pace in 13 years in 2015.

The Zambian kwacha gained the most in a month after Lungu’s announcement, advancing as much as 4.2% against the dollar.

Source – Bloomberg

Zambia sets up team to end mine tax dispute

Zambian President Edgar Lungu created a technical committee to help end the dispute over a new mining tax that companies say could lead to thousands of job losses.

“There was simply one term of reference — end the impasse as quickly possible,” Amos Chanda, Lungu’s spokesman, said by mobile phone from Pretoria, South Africa, where he’s accompanying Lungu for medical treatment. The committee should complete its work before the end of March, Chanda said.

Zambia in January abolished income tax for miners and instituted higher royalties in a bid to increase its revenue from a sector the government said isn’t contributing enough to the economy. The Zambia Chamber of Mines said the new tax system, which more than tripled royalties for some operators, would lead to mine closures and 12,000 job losses this year.

Barrick Gold Corp. in December said it would put its Lumwana mine under care and maintenance as a result of the new regime and falling copper prices. Zambia is Africa’s biggest copper producer after Democratic Republic of Congo.

Creating the committee is the most concrete step yet by government to end the dispute and prevent closures. Lungu last month eased a separate stand-off with mining companies over value-added tax refunds that the government was withholding.

“The idea is to try and come up with quick recommendations” on the royalty tax, Chanda said of the committee’s main area of focus. “Whether to sustain it, negotiate it downwards or abolish it.”

Big Hopes

The committee will be led by Hibeene Mwiinga, Lungu’s special assistant for economic and development affairs, and its members include Zambia Revenue Authority Commissioner-General Berlin Msiska, permanent secretaries from the mines and finance ministries, Treasury Secretary Fredson Yamba, and Chanda.

“We are cautiously optimistic that we we will reach a solution,” Jackson Sikamo, president at the Zambia Chamber of Mines, said by phone from Kalalushi in Copperbelt province. “It is very positive. It also shows the commitment the government has in getting this resolved.”

The industry body represents the local units of companies including Glencore Plc, First Quantum Minerals Ltd. and Vedanta Resources Plc that operate mines in the country.

“There is a lot of hope,” Chanda said. “The direction things are taking is to reach an amicable solution expeditiously.”

Lungu, 58, has been in power for less than two months, after winning a narrow victory in early elections following the death of his predecessor in October. He is seeking specialist medical treatment in South Africa for a rare disease that causes the food pipe to narrow.

Zambia’s kwacha retreated by as much as 2.4 percent to a record low against the dollar on Wednesday, at least partly because of the uncertainty about Lungu’s health, according to Barclays Africa Group Ltd. It traded 2 percent weaker at 7.2461 per dollar by 3:42 p.m. in Lusaka, the capital.

 

Source – Bloomberg News

U.S threatens Zimbabwe with further sanctions over $3B platinum mine

The United States is wagging its finger at Zimbabwe, threatening to ratchet up sanctions over a plan to develop a platinum mine involving Russian and Zimbabwean companies.

According to NewZimbabwe.com, Washington has said it will accelerate sanctions imposed against Harare in 2003, due to the Robert Mugabe-led government’s closer ties with Russia over the US$3 billion Darwendale platinum project. The website bases its claim on Zimbabwe Herald columnist Nathaniel Manheru, who it says is President Mugabe’s spokesman George Charamba. The claim has not been verified by the U.S. Embassy in Harare.

The platinum mine is being developed by a company called Great Dyke Investments, composed of Zimbabwe’s Pen East Investments, and Afronet, a consortium of three Russian partners, according to NewZimbabwe.com.

“At full development in 2024, the mine will produce 800,000 platinum ounces, pushing Zimbabwe’s output over one million ounces, and create 8,000 jobs,” the online newspaper notes.

Since Russia annexed Crimea in March, Washington and the EU have sought to isolate and punish the Kremlin, by tightening restrictions on major Russian state banks and corporations. Senior Russian officials, separatist commanders and Russian firms accused of undermining Ukrainian sovereignty, have also been blacklisted.

The United States imposed sanctions against Zimbabwe in 2003 after accusing Mugabe of human rights abuses and electoral fraud. The country has the world’s second largest platinum reserves after South Africa.

 

Source – Andrew Topf

Lonmin profit plunges on South Africa platinum strike

The world’s third-largest platinum producer, Lonmin, has seen its earnings plunge because of a month-long strike at its mines in South Africa.

The company reported operating profits of $34m (£20m) for the six months to March, down from $93m a year earlier.

Its workers have been demanding higher pay in what has become South Africa’s longest and most costly labour stoppage.

However, they are expected to return to work on Wednesday.

“This has been a challenging first half of the year, latterly dominated by protracted industrial action,” said Lonmin chief executive Ben Magara

“Whilst we continue to work to resolve this dispute we have also taken decisive and early action to reduce cash burn, to safeguard our great assets and protect our balance sheet integrity ahead of a safe and successful ramp-up when the strike ends.”

Mine deaths

Lonmin’s results were released amid reports two workers were killed at its mines on Monday, which may complicate the company’s efforts to end the long-running strike.

South Africa’s National Union of Mineworkers (NUM) said two of its members were killed as they reported for work at Lonmin’s platinum mine.

Lonmin reportedly confirmed one employee was killed.

The Solidarity union, which mainly represents skilled workers, also claimed its members at Lonmin were being intimidated.

The strike action has arisen from growing discontent among the country’s miners, who feel they are being excluded from the benefits of the country’s resource riches.

As a result, miners have asked for their pay to be doubled, but the mining companies have said they cannot afford to meet the workers’ demands.

Lonmin was forced to scrap its annual sales guidance in March because of the industrial action in South Africa.

Its larger rivals Anglo American Platinum and Impala Platinum have also been affected by the dispute and have presented new wage offers.

The strike has caused a 40% drop in global platinum production and affected South Africa’s economy, which depends heavily on mineral exports.

“Industrial relations remain an increasing challenge and risk in South Africa’s mining industry with the platinum sector losing billions of rand in revenue to wage strikes since 2011,” Mr Magara said.

“The strike has also eroded the health and financial position of our employees, with many workers in an unstable financial situation.”

Africa’s most advanced economy has already been struggling with sluggish growth. One in four people in its population are unemployed.

Mining communities have also been affected, with local businesses closing and large numbers of migrant workers returning home.

Source – BBC

 

Kibali officially opened, could herald birth of new DRC economic region

JOHANNESBURG – Democratic Republic of Congo (DRC) Minister of Mines Martin Kabwelulu on Friday officially opened the Kibali gold mine, operated and developed by Africa-focused miner Randgold Resources.

The mine, which would rank as one of the largest gold mines in Africa once it reached full production, was owned by Randgold and gold miner Anglogold Ashanti – each with a 45% stake and more than $2.5-billion invested in the project – in partnership with the DRC State gold mining company Société Miniere de Kilo-Moto.

Kibali, which was currently an operating mine as well as a development project, had produced 88 200 oz of gold and made a profit from mining, before interest, tax and depreciation, of $68.3-million in the three months to December, its first production quarter.

The mine was currently producing gold from its openpit mining operation and oxide circuit.  Commissioning of the sulphide circuit started during the last quarter, while development of Kibali’s underground mining operation remained on track with the vertical shaft reaching the halfway mark and the first underground ore accessed.

The first of four hydropower stations were also currently being commissioned and, with a capacity of 22 MW, it was the largest of its kind in the Orientale province.

Speaking at the opening of the mine, Randgold CE Mark Bristow said the successful development of Kibali could herald the birth of a new DRC economic region to rival the Katanga province.

“To achieve that, we cannot rest here. We need to ensure that we deliver the returns expected by the investors who entrusted us with their money. We have to run a profitable mine, focused on long-term viability, that pays taxes and employs and develops citizens from this region and this country. Kibali must become the catalyst that triggers the additional investment required to grow a strong regional economy,” he said.

Also speaking at the opening, Randgold chairperson Philippe Liétard added that the successful development of Kibali in the face of many infrastructural and other challenges was a triumph for the company’s partnership philosophy.

“Here we have shown what can be achieved in Africa when we all work together; a government that understands the importance of attracting and retaining the investments that are necessary to build a modern economy; two mining companies that believe in sharing the value they create with all their stakeholders, especially the local community; a labour force that is eager to grasp the opportunity of working and learning; and a people who have welcomed us and supported our endeavours,” Liétard said.

Meanwhile, AngloGold Ashanti chief executive Srinivasan Venkatakrishnan said for Kibali’s full potential to be realised it was of the utmost importance that the DRC’s mining code remained supportive of the gold mining sector.

“The government now has an important opportunity to show the world that it is welcoming of gold mining by helping to create what can in a short time become one of the largest gold producers in the world and an engine of growth for this region and this country,” he noted.

 

Source – Miningweekly

Optimism on platinum restructuring overdone

JOHANNESBURG – As the impasse between labour, the Association of Mineworkers and Construction Union (AMCU) and platinum producers Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin continued into its eleventh week, the threat of mine closures and potential restructuring loomed.

The crippling strike, which started on January 23 after wage negotiations between AMCU and the world’s three largest platinum producers stalled, had already cost employees nearly R5.5-billion in wages and the companies over R12-billion in revenue.

“The ongoing strike action is unlikely to peacefully resolve itself, given the divide between the companies’ offer [of 9%] and AMCU’s demands [of an entry-level wage of R12 500], Liberum’s mining team said in a statement to clients on Thursday.

AMCU had publicly stated during marches to all three producers over the last month that it was prepared to continue striking for the next six months if the producers did not bow to its demands.

But trade union Uasa divisional manager for mining workers Franz Stehring believed the “worst of the [economic] destruction” caused by the protracted AMCU-led strike was still to come – after the strike had been resolved and the dust had settled.

He warned that the upcoming aftermath of the strike action – with about 22 000 employees potentially facing retrenchment – needed attention now.

“Already, talk is doing the rounds about the international platinum sector being too large, about a preference for higher skilled and fewer employees [and for] openpit and mechanised mines [besides others],” said Stehring.

However, Liberum did not believe that the current crisis in South Africa’s platinum industry presented the opportunity for a “massive restructuring”.

“We think the market is getting ahead of itself on the possibility of restructuring the platinum business and will likely be disappointed with the final outcome,” Liberum said, adding that restructuring would be significantly “destructive” on both financial and social fronts.

Liberum’s comments emerged as Amplats parent company Anglo American CEO Mark Cutifani voiced his view that divesting the strike-afflicted platinum division could be an option if it did not perform as well as the others in the diversified group’s portfolio.

“Amplats may seek to find a buyer of these underperforming assets, but we do not believe there are any obvious suitors in the current environment,” Liberum commented. However, Sibanye Gold and Exxaro had both expressed interest in a potential entry into platinum if the embattled unit went on sale.

Newswire Reuters quoted Cutifani as saying that the longer the strike continued, the higher the chance that some of the shafts might not reopen once activity restarts.

Mining Weekly previously reported that Amplats CEO Chris Griffith hinted strongly at a closure of more Rustenburg shafts and said, with one-third of the year’s production dissipated as a result of the strike, Amplats’ Rustenburg operations would not make a profit.

Amplats last year underwent a significant and much-contested restructuring initiative to recoup losses at the underperforming Rustenburg mines. The move led to the closure of two mines and the loss of about 7 500 jobs.

“The benefits from shutting down the high-cost, labour-intensive mines are clear, but to do so in a country with 25% unemployment and growing support for far left parties like the Economic Freedom Fighters, would not be without political consequences,” Liberum warned.

AMCU president Joseph Mathunjwa had warned the producers that, should one of the three platinum producers at which AMCU was striking attempt to close a shaft, the union would declare a solidarity strike at all three miners’ operations.

“We forewarn you, if you close one of the shafts, there will not be a single shaft you can operate. If Amplats closes one shaft, Lonmin will also not operate. We will have mass solidarity in our strikes and all the platinum mines will be back to square one,” Mathunjwa said during a march to Lonmin earlier this month.

Source – Miningweekly