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SA mining dealmaker plots M&A push before retirement

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SA mining dealmaker plots M&A push before retirement

South African mining dealmaker Neal Froneman is considering retiring in two to three years time, but would first like to double the size of Sibanye Stillwater Ltd.

Froneman built Johannesburg-based Sibanye into a company with a market value of more than 182 billion rand ($11.9 billion) by purchasing gold, platinum and palladium mines in southern Africa and the U.S. Now the 61-year-old is looking for acquisitions in battery metals, before handing over to a successor.

“I would like to see the company’s size double to a $20 billion market capitalization plus before I move on,” Froneman said in an interview from his farm in South Africa’s Limpopo province. “Two to three years sounds like a good innings and I think we can deliver quite a lot in terms of our strategy.”

Nicknamed Mr. Fix-It for turning around some of South Africa’ aging gold mines, Froneman has identified opportunities in nickel, copper and lithium and may announce a deal this year. The company is also looking to acquire more gold assets, though high valuations are currently a deterrent, the CEO said.

“M&A is what we are good at,” Froneman said. “We have created value and we are going to continue to create value in the right way at the right time.”

Froneman re-jigged Sibanye’s management structure last year, appointing long-time ally Richard Stewart to a new position as chief operations officer. At 45, Stewart is the youngest member of Sibanye’s executive team, and the geologist helped forge the company’s platinum-group metals businesses.

“Richard and I work well, he is entrepreneurial, he has got a solid technical background but it’s a broader team that impacts our business,” Froneman said. “Richard is certainly one of the potential successors but there are others.”

Stewart might need time to gain executive management experience, according to Mandi Dungwa, an analyst at Kagiso Asset Management Ltd. in Cape Town.

“They are creating quite a large global business, that’s where potentially Richard would fall short,” Dungwa said. “But having a COO position probably gives him that experience and if he is able to do well that would be a good indication to the board. Its like a dress rehearsal for the potential job.”

(By Felix Njini)Bloomberg News

Worker abuse by Chinese nationals anger Miners

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Worker abuse by Chinese nationals anger Miners
  • A Chinese national assaulted and injured a worker with a shovel
  • Miners call for the ejection of Chinese from Small-scale mining
  • The government implored to take action

Matopo Gold Miners Association Chairperson Rev Sifelani Moyo has called on the government to investigate and intervene on issues of abuse and exploitation by Chinese “mining investors” in the country as the allegations pointing the Chinese to exploitation and ill-treatment of workers are increasing every day.

Rudairo Dickson Mapuranga

The call has come after a Chinese national was recorded assaulting an employee at a Chinese-owned mine in Bulawayo. The Chinese national reportedly used a shovel to hit the worker who sustained a deep cut on the arm after the camera was switched off. The incident occurred at Fools Investment in Hopefountain Milling Centre in Bulawayo after the employees asked for their backpays dated March 2020.

Rev Moyo said it was high time the government and law enforcement agencies intervene on the issues of human rights abuses perpetrated in the mining industry.

“We are appealing to relevant authorities as well as law enforcement agencies to intervene on such issues.” Rev Moyo said.

Mineworkers are increasingly being frustrated by the government’s reluctance to look into their pleas.

“Our Government has been too silent and complacent in handling these Chinese. Remember that one who shot an employee last year?  We don’t even know how the story ended.” One mineworker said.

Zimbabwe Diamonds and Allied Worker’s Union (ZDAMWU) General Secretary Mr. Justice Chinhema had no kind words with most Chinese investors who he regarded as thugs with no moral campus with their fellow beings.

The ZDAMWU General Secretary said those who are found on the wrong side of the law should be deported and lose their investments in the country because they are directly suffocating the gains of the people’s liberation movements which saw the country gaining independence from white minority rule.

“If the freedom fighters went to war to fight for freedom, fight against abuse like what we are seeing today perpetrated by Chinese nationals on workers, then it means another war to liberate mine workers against abuses is inevitable.

“We are just being told by these thugs that we are now in charge.

“ZDAMWU is now mobilizing workers all its structures to defend themselves from such abuses,” he said.

Chairperson of the Parliamentary Portfolio on Mines and Mining Development Hon Edmund Mkaratigwa said it was heartbreaking to hear stories of nationals being treated in a colonial manner. However, he advised Zimbabweans not to treat cases with a racial eye as this would affect others who have good moral standards.

“The Government of Zimbabwe already has legislation in place with regards to industrial labour relations in our industries. The challenge is you can not judge the book by its colour but only through its contents/actions, like in this case we need to be cautious and be non-racist, but embrace humans with the dignity each deserves. Each case has to be treated as proven law and dealt with in accordance with the laws of this land. If that’s true, its heart wrecking to see a fellow Zimbabwean treated in a colonial manner, we deserve better and the law must take its course. Thank you for letting us know this other case among many.” he said.

Miners platforms had miners seething with anger with many calling for retaliation and ejection of Chinese nationals from the small-scale mining industry for the unacceptable behaviour.

Last year a Gweru based Chinese mine manager shot a worker after a misunderstanding over outstanding salaries. This triggered anger in the country with many calling for Chinese removal from the ASM industry.

The President of the Zimbabwe Miners Federation (ZMF) Ms. Henrietta Rushwaya then met with the Chinese Ambassador to raise concerns of rampant worker abuse which she called unacceptable behaviour. To date, the ZMF has remained mum over the latest incident raising the question of who is exactly currently at the helm of the organisation as usually with ASM’s issues Rushwaya would have responded and taken action already.

See video HERE

 

Caledonia  surpasses gold production target again

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Caledonia  surpasses gold production target again

Caledonia Mining Corporation’s Gwanda based miner, Blanket Mine has exceeded its yearly production target after recording total gold production for 2020 of 57,899 ounces.

The company had targeted to produce between 53 000 and 56 000 ounces in 2020.

Caledonia also surpassed its production target in 2019,  producing approximately 55,182 ounces of gold, ahead of revised production guidance of 50,000 – 53,000 ounces.

The Matebeleland based miner has performed momentously despite the country’s gold production declining by over 30 percent in 2020.

The company has vowed to help the government of Zimbabwe achieve the President’s 2030 vision which will see the country becoming an upper-middle-income earner.

The gold mining firm has previously said that it will work hard for the mining sector to achieve a US$12 BILLION mark by 2023.

South Africa’s mining industry to support covid-19 vaccine rollout

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South Africa’s mining industry to support covid-19 vaccine rollout

South Africa’s mining companies will support the government in the rollout of covid-19 vaccines as the nation battles a surge in infections, the industry body said on Friday.

Mining companies say they are well placed to support the covid-19 response thanks to decades of experience combatting tuberculosis and HIV-AIDS among workers, including the creation of on-site treatment facilities.

The Minerals Council, which represents mining firms, said its members are developing plans to use the sector’s healthcare infrastructure and delivery capability to accelerate the vaccination programme, but did not provide further detail.

WITH AROUND 233 COVID-19 DEATHS IN THE MINING INDUSTRY, UNIONS HAVE CALLED ON MINERS TO HELP PAY FOR VACCINES.

A leading producer of platinum, palladium, chrome and gold, South Africa has a labour-intensive mining industry with thousands of miners working in confined spaces deep underground, posing a higher risk of infections.

The government has called on the private sector, including miners, to help with the rollout of vaccines but has not yet outlined exactly how it should assist.

“While Government is primarily responsible for funding the vaccine rollout and is the single buyer, the industry can play a material role in accelerating the vaccination programme on mines and in mining communities,” said Minerals Council CEO Roger Baxter.

Precious meals producer Sibanye-Stillwater said it could carry out 18,000 vaccinations a day using its 45 health and medical facilities.

“We could probably vaccinate our entire workforce of around 80,000 people in about a week,” said Sibanye spokesman James Wellsted, adding that talks were ongoing about extending vaccinations to the community.

President Cyril Ramaphosa this week said 20 million doses of COVID-19 vaccines had been secured as the country battles infections which reached a peak of more than 21,000 a day last week, taking total cases to nearly 1.3 million, the most on the African continent.

Unions want miners to use profits

With around 233 covid-19 deaths in the mining industry, according to Minerals Council statistics, unions have called on mining firms to help pay for vaccines.

“They have been making huge profits, it’s time for them to buy vaccines for their employees,” said National Union of Mineworkers (NUM) spokesman Livhuwani Mammburu.

Higher precious metals prices, including a surge in gold and rhodium, have made miners flush with cash.

Sibanye said it was also willing to provide financial support for vaccinations but could not yet say how much.

In an indicative budget for the vaccines, South Africa’s government has said it might meet 70% of its vaccine needs with AstraZeneca’s shot, which is the cheapest at an estimated 54 Rand ($3.56) per dose.

At that price, inoculating all the country’s more than 470,000 mineworkers with the two-dose regimen from AstraZeneca would cost around 50.9 million rand ($3.36 million).

($1 = 15.1558 rand)

Reuters

What China’s increasing control over cobalt resources in the DRC means for the West – report

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What China’s increasing control over cobalt resources in the DRC means for the West – report

Market analyst Roskill published a report where it states that China’s increasing control over copper and cobalt resources in the Democratic Republic of the Congo could pose a threat to western market participants.

The threats are related to the security of supply, as increasingly close ties between the two countries could pose problems to those in the West looking to build up self-contained localized battery supply chains.

IN EARLY JANUARY, CHINA ANNOUNCED THAT IT WOULD CANCEL $28 MILLION OF LOANS TO THE DRC AND WOULD PROVIDE $17 MILLION IN OTHER FINANCIAL SUPPORT

Back in early January, China announced that it would cancel an estimated $28 million of loans to the DRC, repayment of which were due by the end of 2020, and would provide $17 million in other financial support to help the country overcome the sanitary crisis caused by the covid-19 pandemic.

During a tour of China’s Foreign Minister, Wang Yi, the two countries also signed a MoU on the Belt and Road Initiative cooperation, with the DRC now becoming China’s 45th Belt and Road Initiative partner in Africa.

The initiative, also known as the “New Silk Road,” consists of a network of railways, pipelines, highways and ports that would extend west through the former Soviet republics and south to Pakistan, India and Southeast Asia.

“China’s decision to write off debts from the DRC and welcome the country as a new partner for the Belt and Road Initiative is likely to further drive cooperation between the two countries and incentivize more Chinese miners, like China Molybdenum, to make new investments into the Congolese copper and cobalt industry, increasing their ownership in local mines,” Roskill’s report reads.

What’s the West to do?

The DRC hosts over 51% of the global cobalt reserves, according to 2019 data released by the US Geological Survey.

Roskill estimates that, in 2020, the central African country produced about 90kt Co in various intermediates representing nearly 70% of the total cobalt feedstock production globally.

Prior to the recent announcement, over 40% of the cobalt mining capacity in the DRC was already controlled by Chinese companies as a result of decades-long investment and development in the country, with several resource-for-infrastructure deals having been signed and implemented since the 1990s.

“On the cobalt refining side, particularly for the production of chemicals suitable for battery applications, China plays an even more dominant role, with its production of cobalt sulphate and oxides accounting for around 80% of the global total output in 2020,” the report reads.

What are western countries to do to mitigate such supply risk in the years ahead?

Locking in feedstock with long-term agreements is a first good step, Roskill says. They should also utilize alternative feeds, such as recycling, and develop resources elsewhere.

Mining.com

Hardy bacteria turn out to be good cobalt miners

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Hardy bacteria turn out to be good cobalt miners

Scientists at Michigan State University found that Geobacter – bacteria found in soil and sediment – are effective cobalt miners, as they are able to extract the metal from rust without letting it penetrate their cells and kill them.

In a study published in the journal Frontiers in Microbiology, the researchers explain that Geobacter not only survive being exposed to cobalt, they essentially coat themselves with the metal.

GEOBACTER COAT THEMSELVES WITH COBALT, LIKE IRON MAN WHEN HE PUTS ON THE SUIT

“They form cobalt nanoparticles on their surface. They metallize themselves and it’s like a shield that protects them,” Gemma Reguera, lead author of the study, said. “It’s like Iron Man when he puts on the suit.”

Cobalt, in general, kills microbes by penetrating their cells and wreaking havoc.

But knowing from previous studies that Geobacter are extremely resistant because, for example, they can block uranium contaminants from getting into groundwater, they suspected the bacteria’s ability to respire rust could also help them to survive cobalt exposure.

This discovery is considered to be a proof-of-concept that opens the door to a number of possibilities, such as using Geobacter as the basis of new biotechnology built to reclaim and recycle cobalt from lithium-ion batteries.

The tiny organisms could also be used to soak up other toxic metals such as cadmium, which were previously believed to be death sentences for the bacteria.

Mining.com

Mineral exports surge 27 percent

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Mineral exports surge 27 percent

Zimbabwe’s mineral exports, excluding gold and silver, for the year 2020 surged by 27 percent, earning the country US$2,4 billion, the Minerals and Marketing Corporation of Zimbabwe (MMCZ) has said.

“Up to December 2020, we managed to surpass target; we had a total sales value of US$2,4 billion against a budget of US$1,86 billion,” MMCZ general manager said in an interview.

“We have done relatively well. We are 29 percent above budget for this year and compared to 2019 we are 27 percent better off.”

This sets Zimbabwe on course of achieving a US$12 billion mining economy in the next two years, said Mr Tongai Muzenda.

The mining sector is Zimbabwe’s largest foreign currency earner, accounting for 70 percent of the country export receipts.

In 2019, the Government launched a roadmap to grow the mining sector to US$12 billion by 2023 through leveraging on the country’s diverse mineral wealth.

The mining roadmap, also known as “Strategic Road to the Achievement of US$12 billion by 2023” targets gold revenue at US$4 billion, platinum group metals at US$3 billion, chrome, iron, steel diamonds and at US$1 billion, lithium at US$500 million, while other minerals are expected to contribute US$1,5 billion.

The Government, in partnership with foreign investors has made significant strides in propelling the mining industry with over US$1 billion expected to be invested in existing and new mines.

The Government holds 65 percent in Kuvimba Mining House, a company it jointly owns with foreign investors.

Kuvimba already has interests in mining assets, including gold, chrome, nickel, gemstone, platinum group metals (PGMs) and chrome.

It wholly controls gold mines Freda Rebecca and Shamva. It has a 85 percent stake in Jena Gold Mine, 74 percent in Bindura Nickel Corporation and 47,8 percent in a multibillion-dollar platinum project, Great Dyke Investments.

The group is reportedly mulling buying ZimAlloys and Sandawana Mine.

Finance and Economic Development Minister Professor Mthuli Ncube recently said the bigger role being assumed by the Government, following the establishment of Kuvimba Mining House was to ensure that the country achieve the US$12 billion target.

A number of private investments are also in the pipeline in coal, diamonds, lithium, platinum and chrome sectors, which would help the country meet the target.

Going forward, Mr Muzenda said the prospects for 2021 “look even brighter” as the country adds value to its minerals.

“This year, we will continue to focus on value addition of all products,” said Mr Muzenda.

“We also want to see numbers going up on gemstones; we want to see people getting value from their gemstones,” he said.

 

The Chronicle

Highlanders FC engages Chinese firm for mining operations

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Highlanders FC engages Chinese firm for mining operations

HIGHLANDERS are in advanced talks with a Chinese investor to operate their newly acquired gold mine in Inyathi, with the Bulawayo giants saying they will draft an agreement that will see them getting at least 60 percent of all sales.

Highlanders chairman Kenneth Mhlophe, who is seeking re-election in the February 7 elections, said his vision was for the mine to run separately from the football club.

He said when fully operational in about a year’s time, the club’s financial woes would become a thing of the past.

“I am a visionary; yes there could be some doubts over the mining venture but our members need not worry. We have done due diligence and believe me, that mine will be a cash cow for the institution. I am in talks with experts in mining, especially in China, who will come and apply their expertise while the club gets 60 percent for its rights. We didn’t have any costs in acquiring that mine, so I believe at least 60 percent is a good deal for us,” said Mhlophe in an interview.

The philanthropist and businessman said he, like veteran administrator Ndumiso Gumede, wants to leave a legacy at the club.

“I want people to remember me as the chairman who acquired a gold mine for the club just like we are talking about Gumede, whose tenure saw us acquiring three properties, Hotel California, the club house and club offices,” Mhlophe said.

Asked about the juniors, which he had promised to fully support during his campaign in 2017 only for the club to see an exodus of junior coaches citing poor working conditions, Mhlophe acknowledged that the coaches might have left as a result of a salary backlog.

The club also failed to promote juniors to the first team, especially last season but instead registered old horses,
“It’s true that we sometimes owed our junior coaches salaries of say three months and this was not because we didn’t care for them but we were trying our best to look after them. We could not stop them from leaving if they got better offers elsewhere. As for not promoting our juniors, I want members to know that we gave coach Mark Harrison six youngsters but he said he could not win the championship with kids and we really couldn’t do anything because if we had forced him to take the juniors, it would have been difficult for us to hold him to account,” he said

Mhlophe faces the challenge of another businessman and farmer Johnfat Sibanda in the elections that will also see members electing the secretary-general as well as a committee member.

 

The Chronicle

‘40-tonne gold output target still achievable’

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‘40-tonne gold output target still achievable’

THE Zimbabwe Miners Federation (ZMF) says the 40 tonnes gold output target is still achievable if all stakeholders make concerted efforts to support production and plug leakages.

Zimbabwe’s gold production has in the last three years continued to decline from 33,2 tonnes achieved in 2018 to 19,052 tonnes in 2020.

In 2019, stakeholders in the mining sector set a target of 40 tonnes but delivered 27,66 tonnes.

Speaking by telephone, ZMF spokesperson Mr Dosman Mangisi said the projected output of the yellow metal was still attainable provided all stakeholders come to the party.

“The 40-tonne target is achievable taking a reflection that in 2018 we produced 34 tonnes and the shortfall was only six tonnes. What is needed is concerted efforts by all stakeholders if we are to meet the target,” he said.

According to official figures from Zimbabwe’s sole gold buyer, Fidelity Printers and Refiners (FPR), the small-scale mining sector, which had in recent years been producing the bulk of the gold, last year delivered 9,347 tonnes.

In 2019, small-scale miners delivered 17,478 tonnes while large mining houses produced 10,181 tonnes.

Zimbabwe earns much of its foreign currency from mining, with gold being one of the major contributors.

However, the sector is facing a myriad of challenges including delays in payment for deliveries, power cuts and smuggling of the mineral to countries such as South Africa and the United Arab Emirates.

In October 2019, the Government set a target of a US$12 billion mining industry by 2023 and the gold sector is expected to contribute US$4 billion.

At present, the gold sector generates between US$2,5 billion and US$2,8 billion to the fiscus. — @okazunga

The Chronicle

Panner dies in shaft collapse

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Panner dies in shaft collapse

A BULAWAYO man died when a mine shaft he was working in collapsed in Woodville Park on Friday.

MacDonald Mhunga (29) and his colleagues were panning for gold when he got trapped under rubble.

The shaft is 10 metres deep and his colleagues failed to rescue him.

The Fire Brigade was called to the scene and a rescue operation started on the same day at about 4pm but the workers had to stop around 7pm due to bad lighting.

The body was retrieved at about 2pm the following day.

Bulawayo police spokesperson Inspector Abednico Ncube confirmed the incident and urged members of the public to desist from engaging in illegal mining activities.

He said illegal mining is an offence and continues to take many lives in Zimbabwe every year.

Insp Ncube said: “Members of the public should find better ways of making money because in this case the mine was already abandoned which is a clear sign that the authorities had already seen that the shaft was now dangerous.”

 

The Chronicle

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