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Gold price rises

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Gold price rises

Gold prices rose on Monday as the dollar fell against the yuan after U.S. President Donald Trump said he would delay an increase in tariffs on Chinese goods, while palladium surged to a record high.

Spot gold rose 0.2 percent to $1,330.48 per ounce at 0532 GMT. U.S. gold futures were steady at $1,333.

The offshore yuan strengthened 0.6 percent to 6.673 yuan against the dollar, after hitting its highest level since mid-July, on the news that Trump might not raise tariffs on $200 billion of Chinese imports to 25 percent from 10 percent.

A strong yuan makes gold cheaper for world’s leading gold consumer, China.

Trump said on Sunday that he would delay an increase in tariffs on Chinese goods that had been scheduled for later this week, citing “substantial progress” in Sino-U.S. trade talks over the weekend, and that he and his Chinese counterpart would meet to seal a deal if progress continued.

“The dollar is weaker today after Trump’s extension of tariff deadline,” said Jeffrey Halley, senior market analyst, OANDA.

“Gold, as it moves into the European and New York trading session, might come under pressure from the stock market,” Halley said, adding that there won’t be any sustained downward pressure until there is more information on the trade deal.

Asian shares scaled a 5-month peak after Trump’s decision to extend the deadline improved appetite for riskier assets.

Gains in equity markets tend to decrease appeal for gold, considered a safe store of value during economic and political uncertainty.

“Gold prices, though hinting for a looming bearish correction on risk-on market sentiments, will remain firmly supported on rising economic uncertainties and heightened geopolitical risks in 2019,” Benjamin Lu, an analyst with Singapore-based Phillip Futures said in a note.

Meanwhile, spot palladium traded as high as $1,506.50 per ounce, propelled by a stark supply deficit, and was last up 0.5 percent at $1,505.

Platinum, which rose to its highest since late November, was up 0.4 percent at $843.50 per ounce.

The platinum group metals (PGM) continued to rise as supply risks increased after South Africa’s Association of Mineworkers and Construction Union (AMCU) planned to extend a strike from Sibayne Gold to other PGM producers in the country, ANZ analysts said in a research note.

The AMCU has been on strike at Sibanye’s bullion operations since mid-November and plans to extend the strike to its platinum mines as well as all other mines where the AMCU has members.

Elsewhere, spot silver rose 0.3 percent to $15.96 per ounce.

Reuters

RioZim thermal power project to take off

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RioZim thermal power project to take off

RIOZIM has signed an exclusivity agreement with a Chinese state-owned firm Power China for the construction of a 2000-megawatt (MW) thermal power station in Sengwa, Gokwe North, raising expectations the long-standing plan is slowly coming to fruition, sources said last week.

An exclusivity agreement (or a lock-out, shut-out or no-shop agreement) is designed to ensure that the other party to a prospective deal negotiates solely with the client for a period of time.

The contractor is already on site, conducting initial evaluations which precede financial closure.

The first phase of the project involves the construction of a 700MW plant.

Sengwa, which carries a $2,2 billion price tag, is among several independent power projects that have been licensed by the regulator, the Zimbabwe Energy Regulatory Authority (Zera).

Although RioZim chief executive officer Mr Bheki Nkomo was not available for comment by the time of going to print, sources said Power China –  a sister company of Sinohydro, which was involved in the expansion project on Kariba South and is presently working on Hwange Power Station’s Unit 7 and 8 – is already preparing a bill of quantities.

“They (Power China) are on the ground now (Power China). They are doing a bill of quantities on the water pipeline and power lines. So, they are updating (details) on two issues, as required by financiers.

“The bank wanted to know the cost of the water pipeline from Kariba to Sengwa, so they are currently costing out that, then the cost of evacuation lines from Sengwa to Sherwood, they wanted proper costing,” said the source privy to the transaction.

“They also want the cost of building the town where workers at the power station will stay. We had also promised to deliver a Special Economic Zone, because we will require customers who will buy the power in forex.

“We want to obtain export processing zone at Sengwa. So, we have applied and the Office of the President is looking at it and on our partners. So things are moving well and we are very positive on the project,” added the source.

Upon completion, Sengwa will be among Zimbabwe’s two biggest power plants, including the 2 400 MW Batoka project that is being jointly pursued by Zambia and Zimbabwe.

Further, the envisaged thermal power project will be fed from RioZim’s coal claims, which are understood to hold more than 1,3 billion of the commodity.

Over the years, the company has been struggling to secure funds for the project.

But the pro-business administration of President Emmerson Mnangagwa has renewed investor interest.

RioZim recently shortlisted six prospective investors – among them Power China and US electrical systems behemoth General Electric (GE) – for the project.

The country has been shoring up its power supplies, and recently completed the 300MW Kariba South Hydro-power Station.

These projects, which have augmented supplies to the local power grid, have naturally cut the country’s import bill.

The country used to spend $40 million of scarce foreign currency to import power from Eskom of South Africa and Mozambique’s Hydro Cahora Bassa.

Separately, the Zimbabwe Stock Exchange-listed miner is currently working with a Japanese technical partner, Univergy, to build a 100MW solar power plant for its mines.

The Sunday Mail

AMCU strike undermines the struggling mining sector- Minerals Council

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AMCU strike undermines the struggling mining sector- Minerals Council

The Minerals Council South Africa on Friday expressed its concern about the consequences of The Association of Mineworkers and Construction Union’s (AMCU’s) planned secondary strikes at mining companies where the union is recognised in the gold and platinum sectors.

Fifteen companies have, so far, received notices of secondary strike action from AMCU, including Lonmin, effective from the night shift of February 28 to around March 7, said the council.

The companies are considering the notices and will do everything in their power to avert such a strike, including legal recourse, reported the Minerals Council.

AMCU earlier this week announced its plans to embark on a secondary strike at not only Sibanye-Stillwater’s platinumoperations, but at all operations where it is the majority union.

The strike is in support of union members who have been on strike at Sibanye’s gold operations since November last year. Sibanye has recently announced that it may retrench up to 5 870 employees and 800 contractors as it restructures its goldoperations.

The secondary strike action has been declared at a time when the gold and platinum sectors are facing numerous challenges, including poor commodity prices, continually rising input costs and operational challenges with the depth of operations continuing to increase, while grades continue to decline, the Minerals Council stated.

In 2018, on an all-in cost basis at prevailing prices, 71% of gold mining operations were either marginal or lossmaking, while more than 50% of platinum group metals production was unsustainable, it pointed out.

“Strike action will only serve to further undermine the sustainability of an industry on which so many lives depend,” stated the council.

It added that the strike would be to the detriment of the mining industry and the people directly employed by it, as well as affecting the entire economy and the country as a whole for many years to come.

Since 2007, jobs in the gold sector have declined by nearly 40% and, since 2017, employment in the gold sector has declined by 10%.

“The mining industry has the potential to be a key driver of the economy and change. It is unfathomable that AMCU would willingly call for secondary strikes in an industry that is already in jeopardy,” said Minerals Council CEO RogerBaxter.

Mining Weekly

South Africa mining strike to spread to at least 15 firms — Minerals Council

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South Africa mining strike to spread to at least 15 firms — Minerals Council

At least 15 mining firms in South Africa have received notices of strikes to be held next week in support of colleagues at Sibanye-Stillwater who on strike over wages and job cuts, Minerals Council South Africa said on Friday.

The Association of Mineworkers and Construction Union (AMCU) has been on strike at Sibanye’s bullion operations since mid-November and plans to extend the strike to its platinum mines as well as all other mines where the AMCU has members.

Firms to be affected include AngloGold Ashanti, Harmony Gold, Anglo American Platinum and Lonmin.

Reuters

20 killed near Mutanda Mine

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20 killed near Mutanda Mine

About 20 people died on Wednesday when a truck carrying acid to Glencore’s Mutanda Mine in Democratic Republic of Congo collided with two other vehicles, Glencore said on Friday.

The accident occurred in the evening about 50 kilometres (31 miles) from the copper and cobalt mine in the southeast of the country.

The truck was owned by a logistics company contracted by the mine, Glencore said, without giving its name or any other details on whether those who died were all workers at its mine.

It said in an emailed statement to queries from Reuters that it “will continue to work with the logistics company and relevant government agencies, including the emergency services to provide support”.

Reuters

Artisanal miners exposed to many dangers

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Artisanal miners exposed to many dangers

Following the Battlefields national disaster, which claimed the lives of more than 50 artisanal miners, there has been growing calls that the sector needs regulation and support.

In Zimbabwe, gold is one of the country’s leading export earners and last year more than 33 tonnes of gold were produced, with the bulk, of more than 27 tonnes having been produced by small scale miners.

Globally, every year, more than 2,700 tonnes of gold is mined, and twenty per cent of that – over 500 tonnes annually – is produced by artisanal and small-scale miners.

But despite all the rich pickings, the story of artisanal mining is still characterised by harsh conditions, without the protection of industry regulations on pay, health or safety, to sate the national hunger for gold for foreign currency.

While the Battlefields disaster brought home reality of mining risks, at least in terms of unsafe mining shafts, there are many other risks including exposure to harmful mercury emissions that also need urgent attention.

According to Global Environment Facility (GEF), an organisation formed to help tackle the world’s most pressing environmental problems, urgent action is needed to protect millions of men, women and children exposed to toxic levels of mercury through gold production every year.

GEF says the artisanal and small-scale gold mining (ASGM) sector is the single largest source of man-made mercury emissions, responsible for the release of as much as 1,000 tonnes of mercury to the atmosphere annually.

Globally, as many as 15 million people work in the ASGM sector globally – including 4,5 million women and over 600,000 children. In Zimbabwe, while the exact numbers might not be known, thousands of families rely on gold panning.

So indeed, the disaster is an unfortunate reminder that there is urgent need to address the several challenges that multitudes of artisanal miners face daily.

Zimbabwe is among the top 10 countries in the world that are still using mercury to process gold, importing over 350 tonnes of mercury annually. This is despite signing the Minamata Convention in Japan 2013.

“Introducing safe, mercury-free technologies into the ASGM sector will help provide a safe transition to job formality and dignified work for millions, while putting an end to the environmental impacts that can pave the way to sustainably produced gold,” GEF said this week, amid a global push for a $180 million investment to tackle the hidden cost of gold – exposure to toxic levels of mercury.

With many miners relying on toxic, mercury-based extraction methods, the ASGM sector is said to be the world’s single largest source of man-made mercury emissions, releasing as much as 1,000 tonnes  of mercury (almost 40 per cent of the global total) into the atmosphere every year.

Studies indicate that mercury exposure in artisanal and small-scale miners is a major, largely neglected global health problem – putting miners and their communities at risk of impacts from permanent brain damage to seizures, vision and hearing loss, and delayed childhood development.

“Mercury emissions impact health and ecosystems, contaminating the food we eat, the water we drink and the air we breathe. This is a long-term problem we need to confront now. Joint initiatives like GEF GOLD demonstrate that when we unite for environmental action we can protect community health, provide livelihoods to those most in need, and save the planet.” Joyce Msuya, Acting Executive Director, UN Environment, reportedly said.

Launched this week, at London’s Goldsmiths’ Centre, the Global Environment Facility-backed Global Opportunities for the Long-term Development of the ASGM Sector (GEF GOLD) programme aims to reduce the use of mercury in artisanal gold mining and introduce and facilitate access to mercury-free extraction methods, while also working with governments to formalise the sector, promoting miners’ rights, safety and their access to markets.

Promoting and facilitating access to non-mercury processing techniques for artisanal and small-scale miners is vital – not only to reduce mercury emissions, but to protect the health of vulnerable communities.

Business Times

Cabinet approves ZMDC unbundling

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Cabinet approves ZMDC unbundling

Cabinet on Tuesday approved the unbundling of state mining arm – the Zimbabwe Mining Development Corporation (ZMDC) into four mineral specific units as efforts to improve efficiency in State owned assets gather pace.

There had been concerns that the previous order was too bloated for one organisation and thus limiting the mining vehicle to effectively exert itself in the mining sector.

The mining sector has been identified as a key pillar towards the attainment of Vision 2030 as enunciated by President Mnangagwa by which Zimbabwe should be an upper middle income earning economy.

For this to be achieved, Mines and Mining Development Minister Winston Chitando, has said the mining sector should generate annual export earnings of US$12 billion by 2023 up from just over US$2 billion achieved in 2018. Speaking to journalists at Tuesday’s post-Cabinet meeting media briefing, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa, said Government had resolved to unbundle the state entity into four mineral specific units.

Said Minister Mutsvangwa; “That ZMDC be consolidated into specific mineral commodity groups namely; gold, precious metals and stones, base metals and energy and industrial minerals. “A specific subsidiary will be established for each of the mineral groups,” she said.

The state mining entity is a major player in the mining sector and has interests ranging from diamond mining, gold mining, emerald mining, platinum mining, copper mining, tin mining and several other precious stones. The state mining vehicle has huge targets among them growing its diamond production at its subsidiary, Zimbabwe Consolidated Diamond Company (ZCDC), from 2, 8 million carats mined out last year to at least 10 million carats annually by 2025.

The diamond miner has already planned to invest US$32 million in exploration projects to support a resource definition and expansion programme towards the 2025 target.

Government has also set ZMDC high targets in gold productions where it is expected to play a significant role towards the national output target of 100 tonnes per year by 2023 up from 33, 2 tonnes delivered to Fidelity Printers and Refiners (FPR) in 2018.

Business Times

Zim mining sector predicted to boom

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Zim mining sector predicted to boom

Zimbabwe is poised to become a mining giant in the Southern African region on the back of its vast mineral deposits and huge investments that favour the sector’s growth.

United Kingdom based research firm, Fitch Solutions, sees Zimbabwe’s mining sector booming, with gold and platinum posting positive growth driven by an anticipated increase in metal prices.

Zimbabwe has vast mineral deposits ranging from gold, platinum, diamonds, nickel to chrome. The country is home to the world’s second largest known platinum deposits after South Africa, while its gold reserves are one of the largest in Africa.

Diamond reserves are also estimated to be the second largest after Russia.

“Zimbabwe is emerging as an important mining centre within Southern Africa as foreign investment drives as seen by growth in mineral and metals production,” said Fitch in their recent publication on the country – Zimbabwe Country Risk Q1 2019.

“In terms of overall platinum output, Zimbabwe is challenging the world’s largest platinum producers, Russia and South Africa, while gold production is also set to ramp up over the medium term.

“Zimbabwe will experience a temporary boost in gold production in 2017-2019 as the impact, a gradual recovery in global gold prices and regulatory changes lead to an increase in activity by smaller mining firms. Zimbabwe’s platinum output will also grow at a steady pace, while that of its main competitors, South Africa and Russia, will stagnate over time, according to our mining team,” said Fitch.

Government is also working on improving the business environment to attract foreign direct investment in all sectors.

Various reforms are being undertaken.

Already, Government has amended the indigenisation laws, which will allow foreign investors to gain full ownership in all sectors save for platinum and diamond where Government will retain 51 percent stake.

Fitch sees this as a key launch-pad to boosting investment in the mining sector.

“The new government in Zimbabwe has shown signs of progress towards implementing investor – friendly structural reforms, which will encourage FDI and buttress economic growth over the long term.

“Zimbabwe is endowed with a wealth of natural resources and vast human capital compared to regional peers,” said the UK think-tank.

Mining plays a key role to the economy, and together with agriculture, the sectors anchor the Zimbabwean economy.

Last year, the mining sector contributed $2,3 billion in foreign currency earnings during the first nine months alone and was projected to reach $2,9 billion by year end, according to the 2019 National Budget.

It is estimated the sector provides slightly over 33 000 formal direct jobs with indirect jobs through upstream and downstream industries estimated at about 70 000 with approximately 500 000 artisanal and small scale miners. Over a million people are dependent on the sub-sector.

The projected boon in mining is also expected to see contribution towards the overall anticipated economic recovery, although this will not happen overnight.

Fitch also says, the country’s economic recovery will also be hinged on weather patterns that can sway it in either positive or negative direction.

Business Times

Thirteen bodies retrieved from Gloria coal mine on Friday

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Thirteen bodies retrieved from Gloria coal mine on Friday

Recovery operations of the remaining trapped bodies within the shaft at Gloria Coal Mine in Mpumalanga had to be halted on Friday due to severe smoke, the police have said.

It was reported that 13 bodies were retrieved, with more still underground. At least 22 men were trapped underground earlier this month after a gas explosion. Eighteen bodies have now been brought to the surface.

Work was hampered for the umpteenth time after one of the ventilation fans broke down, the Middelburg Observer reported earlier.

Proto teams were slowly making their way deeper into the shaft and came across seven bodies before they had to be pulled from the operation due to the breakdown. The mine had called upon technicians from Johannesburg to come and repair the extractor fan.

At least 13 bodies were retrieved on Friday and work will only continue again on Monday.

Mike Elliot, the communication liaison at the mine, informed Middelburg Observer that proto teams had been back at work since early on Thursday morning.

A distance of about 1.5km underground needs to be covered for the rescuers to reach the estimated location of the trapped bodies.

The teams experienced numerous challenges along the way when one of the walls in the shaft reflected on the blueprints was damaged by a blast, which caused a ventilation leak. Proto teams were doing repairs to the walls as they descended, by erecting “brattices” (a temporary wall made of tarpaulin) and fixing them to the wall over any holes caused by the blast.

The brattices are said to keep the fresh air from leaking out of the rescue routes.

The repairs were complete, and rescue teams were now moving to the estimated location at a fast pace.

Elliot went on to explain that people needed to understand that this was a time-consuming process.

“These guys that make up the proto teams are the best guys in the world and they also have the best equipment in the world.”

However, despite having state of the art equipment at their disposal, ventilation within the shaft is of utmost importance for the recovery, as the oxygen supply provided for each rescuer is to be reserved for emergency exits.

The Citizen

Teranga completes initial resource on Golden Hill

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Teranga completes initial resource on Golden Hill

After 18 months of drilling at its Golden Hill exploration project in southwestern Burkina Faso, Teranga Gold (TSX: TGZ; US-OTC: TGCDF) has completed a maiden resource estimate.

The plan is to build on the resource and advance the project through a preliminary economic assessment and into the feasibility stage of development.

Golden Hill contains 415,000 ounces of gold in 6.40 million indicated tonnes grading 2.02 grams gold per tonne and another 644,000 ounces of gold in 11.95 million inferred tonnes grading 1.68 grams gold per tonne.

Richard Young, Teranga Gold’s president and CEO, said he was “increasingly confident that Golden Hill will ultimately represent Teranga Gold’s third gold mine”The resource excluded historic drilling due to incomplete data and was based on nearly 650 drill holes totaling more than 70,000 metres distributed among nine prospects within a 7.5 km radius. At this stage, Teranga Gold says the configuration would lend itself to a multi-pit operation feeding into a central mill.

Teranga Gold said it was “pleased with the grades, strong continuity and widespread mineralization” at Golden Hill and noted that drilling has identified and partially outlined “numerous at-surface, oxide-hosted mineralized gold zones demonstrating excellent along trend and to-depth continuity.”

The gold zones extend to considerable depths below the oxide-hosted mineralization “transitioning into fresh brecciated and altered shear zones that remain open to further depth expansion.”

Richard Young, Teranga Gold’s president and CEO, said he was “increasingly confident that Golden Hill will ultimately represent Teranga Gold’s third gold mine.

The company is building its second gold mine, Wahgnion, in Burkina Faso.

Its first mine, Sabodala, in Senegal, has produced more than 1.6 million ounces of gold since Teranga Gold’s public offering in 2010.

The West Africa-focused company has exploration projects in Burkina Faso, Cote d’Ivoire and Senegal.

As of June 30, 2018, Teranga Gold had more than 4 million ounces of gold reserves.

 The Northern Miner

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