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NMWUZ), NEC in salary fight

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NMWUZ), NEC in salary fight

WORKERS under the National Mine Workers’ Union of Zimbabwe (NMWUZ) have accused the mining sector’s National Employment Council (NEC) of not timeously processing cases of underpayment and non-payment.

NMWUZ members besieged NewsDay offices in Bulawayo yesterday, accusing the NEC of failing to effectively discharge its mandate.

“We have a challenge with NEC mining which is failing to discharge its duty effectively. They are failing to release draft rulings on time. For instance, some of us have cases backdated 2010 that are yet to be processed. Surely, how can we work? We approached our union leaders and they told us that NEC was delaying everything..,” a worker, who requested anonymity, said.

Workers said cases which the NEC was struggling to process included underpayment and non-payment.

“Workers are suffering yet NEC is dillydallying. Some of them have died without getting their dues. Surprisingly, workers belonging to the Associated Mineworkers’ Union of Zimbabwe (AMWUZ) are getting their papers processed on time,” said another worker.

NMWUZ regional manager Abraham Kavalanjila confirmed that NEC mining was failing to discharge its duties effectively.

“We have a challenge now with our membership due to NEC mining’s failure to execute its duties on time. Workers are accusing us of not doing our job, yet it’s the NEC. We have tried to engage them on several occasions to no avail,” he said.

Another NMWUZ official, Shadreck Pelewelo, said justice delayed was justice denied.

“NEC was put in place to do cases expeditiously. It should not delay justice. Some people have died without getting justice. Some of the cases are small like non-payment and underpayment. Remember, justice delayed is justice denied,” he said.

Contacted for comment, NEC mining sector senior designated agent Jeffrey Dube said workers needed to be specific on which cases they were referring to.

“They need to be specific not be general so that we refer the case to the secretary general who is responsible for the Press. We also don’t know about favouritism they are talking about,” he said.

Acting NEC secretary-general for the mining sector, Archibald Tahwa, was said to be in a meeting when NewsDay sought a comment from him._NewsDay

ZMF engages Government over gold millers’ debt

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ZMF engages Government over gold millers’ debt

THE Zimbabwe Miners’ Federation (ZMF) is in discussion with the Government over the $500 million the gold millers owe the State. 

In a recent interview with Sunday Business, Mines and Mining Development Deputy Minister Engineer Polite Kambamura said the Government was soon to close the majority of gold milling centres which owed the State monies amounting to $500 million after suspicions of underhand dealings and failure to account for the yellow metal processed at their plants.

ZMF spokesperson Mr Dosman Mangisi told Business Chronicle yesterday that his organisation has engaged the Government and gold millers over the outstanding $500 million.

“ZMF is currently in talks with both Government and the millers. We are hoping that the talks will yield favourable conditions for both parties,” he said.

“We are hoping for a positive outcome. Millers will own up and pay averting closure.”

The Ministry of Mines and Mining Development suspects that the country was producing close to 100 tonnes of gold, but the bulk of it was being lost to the black market as small-scale miners, who are producing the bulk of the mineral, were shunning official channels.

Last year deliveries to the sole buyer of gold, Fidelity Printers and Refinery (FPR), amounted to 33, 4 tonnes.

Mr Mangisi said it was disturbing that the country was losing a lot of gold which was needed for the country to attain foreign currency.

“Gold is one of the country’s main earners of foreign currency and it is very disturbing that a huge chunk is going unaccounted for and as ZMF we are trying to work out a strategy for miners to account for their gold,” he said. 

The gold sector is one of Zimbabwe’s foreign currency generators among other commodities such as tobacco and platinum._The Chronicle

Gold gains on soft equities

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Gold gains on soft equities

Gold inched up on Wednesday, after falling the most in nearly two weeks in the previous session, as share markets retreated on worries about a possible U.S. recession and weak data added to concerns about the economy.

Spot gold was up 0.1 percent at $1,317.14 per ounce as of 0126 GMT, after registering its biggest one-day percentage decline since March 14 in the previous session.

U.S. gold futures were also up about 0.1 percent at $1,316.80 an ounce.

Asian shares slipped on Wednesday, giving up their small gains made in the previous day, as investors tried to come to terms with a sharp shift in U.S. bond markets and the implications for the world’s top economy.

Though benchmark 10-year note yields were steady above their lowest level since December 2017, the yield curve was inverted by around four basis points. If it persists the inversion is seen as an indicator that a recession is likely in one to two years.

U.S. homebuilding fell more than expected in February as construction of single-family homes dropped to near a two-year low, while consumer confidence ebbed in March, offering more evidence of a sharp slowdown in economic activity early in the year.

Germany’s 10-year bond yields held below zero percent, just above 2-1/2-year lows, on Tuesday, weighed down by fears of global economic slowdown and uncertainty about the impact of a potentially chaotic Brexit on the euro zone.

President Donald Trump’s expected nominee for the Federal Reserve Board of Governors, Stephen Moore, said the U.S. central bank should immediately cut interest rates by half a percentage point, according to an interview with the New York Times on Tuesday.

The U.S. House of Representatives on Tuesday failed to override Trump’s first veto, leaving in place the “national emergency” he declared last month to build a U.S.-Mexico border wall that Congress has not funded.

British Prime Minister Theresa May will address her Conservative lawmakers on Wednesday, possibly to set out a timetable for her departure in a last throw of the dice to win support for her twice-rejected Brexit deal in parliament.

 China’s net gold imports in February via main conduit Hong Kong fell 13.6 percent from the previous month, as economic woes dented appetite in the world’s top bullion consumer.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.4 percent on Tuesday._Reuters

Oil rises

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Oil rises

Oil rose to around $68 a barrel yesterday as OPEC supply cuts and expectations of lower US inventories outweighed concern about weaker demand due to an economic slowdown.

The price of global benchmark Brent crude has risen by more than 25 percent in 2019, supported by supply curbs by the Organisation of the Petroleum Exporting Countries plus allies, and losses due to US sanctions on Iran and Venezuela.

Brent was up 92 cents at $68,13 a barrel at 1334 GMT, not far from its 2019 high of $68,69 reached on March 21. US crude added $1,28 to $60,10.

“It appears that concerns about demand have taken something of a back seat,” Commerzbank analyst Carsten Fritsch said.

“Instead, market participants are focusing on the tight supply situation again.”

Expectations of a further drop in US inventories also supported prices, suggesting the OPEC-led curbs were helping to avert a build-up of excess supplies.

The first of this week’s supply reports, from the American Petroleum Institute, is due at 2030 GMT. US crude inventories are forecast to have fallen by 2,4 million barrels in what would be a third straight weekly decline.

Further price support came from another power cut in Venezuela, the second to hit the OPEC nation this month, raising concern about the country’s oil exports. Worries about demand have limited oil’s rally as manufacturing data from Asia, Europe and the United States pointed to an economic slowdown, although bullish bets by some investors are rising. — Reuters.

Eskom price hikes to cost over 90 000 miners jobs

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Eskom price hikes to cost over 90 000 miners jobs

South Africa’s gold and platinum mines will shed around 90,000 jobs in the next three years as above-inflation electricity price increases by power utility Eskom add to already soaring operating costs, an industry body said on Monday.

“In total, as many as 90,222 jobs would be at risk solely as a result of the MYPD4 tariff increases granted by Eskom,” the Minerals Council South Africa said in a presentation.

Job cuts are politically sensitive in Africa’s most industrialized economy where a quarter of the labor force is unemployed, while power outages and steep price increases by Eskom are set to hurt an already fragile growth outlook.

In February, miner Sibanye-Stillwater said it planned to cut nearly 6,000 jobs in a restructuring of its gold mining operations, while Gold Fields said last year it could slash 1,100 jobs, and Impala Platinum plans to cut its workforce by a third.

Labor unions have threatened strikes over the job cuts at mining firms as well planned reductions at a numerous state-owned companies.

Energy regulator Nersa said in early March Eskom could hike tariffs by 9.41 percent in the 2019, 8.10 percent in 2020 and 5.2 percent in 2021, far less than Eskom’s request for increases above 15 percent in each of the three years.

The industry body said in its presentation that 71 percent of all gold mines and 65 percent of platinum mines were “loss-making or marginal” by the end of 2018, adding the power price hike would make the situation even worse.

Once the largest contributor to South Africa’s gross domestic product, mining has shrunk steadily over the last decade with hard-to-reach deposits, high wage settlements and uncertainty over ownership laws deterring investors against a backdrop of slack global demand.

Last week, Statistics South Africa data showed gold production contracted for the 15th month in a row, shrinking by 22.5 percent in January, while platinum output was up 8.8 percent in the same period.

“We see the Eskom crisis as not just a crisis but a potential disaster,” said Minerals Council chief executive Roger Baxter._Reuters

Government considering bringing fuel by road

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Government considering bringing fuel by road

GOVERNMENT is considering bringing in fuel by road after Cyclone Idai flattened Mozambique’s port city of Beira linking the country’s fuel pipeline.

The port, which houses the control room which pumps fuel into the pipeline, was the worst affected with reports suggesting that more than 90% of the city had been destroyed when the tropical storm made landfall on March 14.

As a result, fuel supplies to Zimbabwe via the pipeline have been suspended causing supply gaps and long queues at service stations.

Cyclone Idai left a trail of destruction and killed hundreds of people in Zimbabwe, Mozambique and Malawi.

“The pipeline has not been affected, it is intact. The pipeline itself has not been affected. What has been affected on the Beira side is the pump station to pump the fuel into the pipeline, which is why I am saying they are now working on something there. But, we as government we are not just sitting…” Ministry of Energy and Power Development acting permanent secretary Benson Munyaradzi told NewsDay, at the weekend.

“. . . but in case the damage was very severe and at this moment they (Companhiado De Pipeline Mozambique-Zimbabwe (CPMZ)) are still analysing, we are already working on other means of bringing in fuel. For example, you know that you can bring in fuel by road?”

Mozambique operates the CPMZ pipeline from the coastal town of Beira to Feruka in Mutare while the National Oil and Infrastructure Company operates the Feruka Pipeline from Mutare to Mabvuku or Msasa depots in Harare.

“We, as ministry, are in constant contact with CPMZ, who are managing the pipeline from Mozambique to Zimbabwe as well as the pumping station from Beira. The pump station was affected, but I think it was only the control room that was affected a bit, but within the next week they (CPMZ) would have resumed pumping,” he said.

Despite the apparent shortages, authorities in Zimbabwe still insist that the country has enough fuel stocks._NewsDay

Lonmin urges shareholders to back Sibanye takeover

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Lonmin urges shareholders to back Sibanye takeover

Platinum miner Lonmin does not have sufficient liquidity to fund the new projects needed to avoid shaft closures and job losses, it said on Monday as it urged shareholders to back its proposed takeover by Sibanye-Stillwater.

The London-listed company, crippled by soaring costs and subdued platinum prices, has been cutting spending to conserve cash and retain a positive balance sheet required by conditions of South Africa-based Sibanye’s offer.

However, progress on all fronts has been slow against the backdrop of strikes by South Africa’s Association of Mineworkers and Construction Union (AMCU) in a long-running pay dispute.

AMCU, which has been on strike at Sibanye-Stillwater’s gold operations since mid-November, wanted to extend the strike to at least 11 other companies including Anglo American’s gold and platinum operations, Harmony Gold and Lonmin. However, South Africa’s labour court rejected AMCU’s request this month.

“The challenges facing Lonmin and the industry persist,” Lonmin said in a statement ahead of what is likely to be a fiery AGM in London on Monday.

“This is why your board, recommends the all-share offer from Sibanye-Stillwater.”

Despite “new and prudent measures” to refinance the business with a previously announced $200 million facility, Lonmin said it remains “financially constrained and unable to fund the significant investment required to sustain our business and associated employment in the future”.

Lonmin added that poor production and correspondingly high unit costs have continued in its second quarter this year, largely offsetting the benefits of improved prices of platinum group metals._Reuters

Caledonia seeks to expand exposure in Zimbabwe

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Caledonia seeks to expand exposure in Zimbabwe

Gold miner Caledonia Mining is seeking ways to deepen its investment in Zimbabwe even though a currency crisis has dented its earnings and bureaucracy has slowed the company’s purchase of an increased stake.

The end of Robert Mugabe’s rule in 2017 after an army coup led to a rush of excitement that miners would flood in to develop the nation’s mineral wealth.

The end of Robert Mugabe’s rule in 2017 after an army coup led to a rush of excitement that miners would flood in to develop the nation’s mineral wealth

That enthusiasm faded as a severe dollar crunch hobbled business and led to shortages of medicine, fuel and food.

Following violent protests at the start of the year and Zimbabwe’s introduction of a new currency last month, Caledonia Mining’s Chief Financial Officer Mark Learmonth told Reuters the “hot money” had left but said the country was gradually moving in the right direction.

“If you believe things will be better in five years’ time, you have to get in now,” he said.

Caledonia Mining’s main asset is its 49-percent stake in the Blanket Mine, which produced 54,511 ounces last year, a nearly 3 percent fall year-on-year because of lower ore quality.

The mine has been producing for a century barring a temporary shut-down from October 2008 to April 2009 at the height of Zimbabwe’s economic crisis.

Caledonia is expanding production at the mine in southern Zimbabwe and says it is sufficiently confident Zimbabwe will recover from its problems to re-invest on a modest scale.

Bureaucracy

“We’re not talking about a big, producing mine. We’re talking about advanced exploration or brownfield, but with good prospectivity,” Learmonth said. “We plan to redeploy some of the surplus cash to be generated by the Blanket Mine,” he added without specifying figures.

The plan is to stay focused on gold, rather than expanding into other minerals.

Like other miners, Caledonia Mining has been hit by the currency turmoil, which slowed operations because it couldn’t buy equipment. Power shortages also disrupted production.

The Blanket Mine is now expected to reach a target of 80,000 ounces per year in 2022, rather than in 2021, a deadline the company previously thought achievable.

Zimbabwe’s foreign currency shortage worsened after the Reserve Bank of Zimbabwe said last October gold producers would receive 30 percent of their proceeds in U.S. dollars and the rest in local currency, Caledonia said.

Following negotiations between the government and Caledonia and other gold miners, the U.S. dollar percentage was raised to 55 percent and a higher share can be negotiated for specific needs, such as dividend payments.

The currency situation, Caledonia says, is manageable, but bureaucracy is a problem.

Following Zimbabwe’s changes to ownership laws announced last year, Caledonia in November agreed to raise its stake in the Blanket Mine to 64 percent from 49 percent, but does not know when that deal will be completed.

“The impediment is not political, it’s purely bureaucratic,” Learmonth said._Reuters

Lack of good projects puts mining boom at risk

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Lack of good projects puts mining boom at risk

After years of suffering, the mining industry is finally somewhat bullish on its own prospects. But senior executives at the Reuters Mining Summit this week reported a pronounced lack of good new projects of the kind that last for decades and make a company’s fortune.

“Trying to discover a new Voisey’s Bay is a needle-in-a-haystack exercise,” said Aaron Regent, chief executive of zinc miner Falconbridge Ltd. FL.TO, referring to Inco Ltd.’s N.TO giant nickel deposit in eastern Canada. “We’re all trying to scale up and get more volume through.”

That sentiment extends across segments of the mining industry, into precious metals as well.

“Discoveries are becoming harder and harder to find,” said Greg Wilkins, chief executive of Barrick Gold Corp. (ABX.TO). “I think the mining industry has less flexibility today than it did five years ago in grade management.”

The mining companies that presented at the summit largely agreed that, in the short term, they are well placed, with facilities to mine and projects to develop. But just beyond the horizon, they say, a much more serious risk lurks.

“The scarcity of good exploration projects is going to become a serious issue three to five years from now,” said Donald Lindsay, chief executive of top zinc miner Teck Cominco Ltd. TEKsvb.TO.

OFF THE PATH

Mining bosses say the future will lead them to places off the beaten path, where international businesses might not ordinarily go except for the lure of riches under the ground.

“I think that most of the good deposits that will come through will come in countries that are not as stable and not as easy to operate in,” said Peter Tomsett, chief executive of gold miner Placer Dome Inc. PDG.TO.

One prime example is the Democratic Republic of Congo, where Phelps Dodge Corp. PD.N says it is close to approval for a deal to develop the vast Tenke Fungurume deposit, site of the world’s largest known deposits of copper and cobalt.

“I think you have to take a little bit of a portfolio approach to it, and implicit in that is if you do lose it all it doesn’t sink the company,” Phelps Dodge CEO Steve Whisler told the summit at the Reuters office in New York.

THE CHINA QUESTION

Executives say new exploration and new production will be crucial to feed China’s ravenous appetite as the country industrializes, meaning more steel for buildings and copper for electrical wire, and as the standard of living for its citizens rises, meaning more gold for jewelry.

“From my view, the production level can’t keep up with the consumption level,” said Bruce Markowitz, president of aluminum company RUSAL North America Corp.

Companies are spending substantially more money in some cases to try to find new deposits to keep up.

“We’ve increased our exploration from around $30 million a year to around $50 million this year,” Inco’s president, Peter Jones, said at the summit.

Others say they are looking, but not necessarily finding much of real interest.

“We keep an active exploration program going in South America, in Canada, in the (United States) and Australia, but as yet we’ve not identified anything that really looks that prospective,” Keith Rumble, CEO of South African platinum miner Implats (IMPJ.J), told the summit by telephone from South Africa._Reuters

Gold gains

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Gold gains

Gold rose on Monday as investors’ appetite for riskier assets faded on concerns about a potential U.S. recession and decelerating global growth, increasing appeal for the bullion alongside yen and bonds.

Spot gold was up 0.2 percent at $1,316.11 per ounce as of 0422 GMT, while U.S. gold futures gained 0.3 percent to $1,315.80 an ounce.

The metal last week posted its third consecutive weekly gain and rose 1 percent, the most since the week ended Feb. 1.

Investors dumped shares and fled to the safety of bonds, while the Japanese yen hovered near a six-week high.

“Market is in a risk aversion mode. It seems that the data from Friday night, of U.S. and Europe, didn’t come as expected,” said Michael McCarthy, chief market strategist, CMC Markets.

Data on Friday showed that U.S. manufacturing activity unexpectedly cooled in March and businesses across the euro zone performed much worse than expected this month, fanning concerns on global growth.

“If data continues to be as weak as forecast then there is very good chance we could see significant higher gold prices,” McCarthy said, adding that the inversion of yield is a sign of concern.

Yields on benchmark U.S. 10-year treasury notes fell further below three-month rates in Asia, an inversion that has in the past signalled the risk of economic recession. The yield curve inverted on Friday for the first time since mid-2007.

Lower yields reduce the opportunity cost of holding non-yielding gold and weigh on the dollar. A weaker dollar makes bullion cheaper for non-U.S. investors.

Chicago Federal Reserve Bank President Charles Evans said on Monday that it is a good time for the U.S. central bank to pause and adopt a cautious stance, adding that he did not expect any interest rate hikes until the second half of next year.

“Gold is set to make another run for the $1,350 price level that has proved resilient,” OANDA said in a note.

“Volatility fuelled by uncertainty and with plenty of Fed speakers expected to reinforce the dovish rhetoric from the central bank, the U.S. dollar will be limited on the upside.”

Indicating appetite for the safe-haven bullion, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose about 1 percent in the previous week.

Investors also raised their bullish wagers in COMEX gold in the week to March 19, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Among other precious metals, palladium slipped 0.1 percent to $1,563 per ounce._Reuters

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