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AMCU to extend Sibanye strike to other mines

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AMCU to extend Sibanye strike to other mines

Workers led by South Africa’s Association of Mineworkers and Construction Union (AMCU) plan to down tools at gold and platinum mines next week in support of colleagues at Sibanye-Stillwater who are striking over wages and job cuts.

AngloGold Ashanti, Harmony Gold, Anglo American Platinum Lonmin, Village Main Reef and DRDGold have received notices of the strike action, which is expected to begin on Feb. 28 and last until March 7, industry body, the Minerals Council, said on Thursday.

Sibanye-Stillwater last week said it could cut nearly 6,000 jobs at its gold mining operations, where AMCU has been on strike since mid-November over a wage dispute.

AMCU reached wage agreements with AngloGold, Harmony Gold and Village Main Reef last year.

South Africa is home to the world’s biggest platinum group metals deposits and accounts for just over 90 percent of global production.Sibanye’s full-year loss, hit by multiple disruptions at its South African gold operations and a deferred tax charge, was limited by the strong performance of the company’s U.S. and South African platinum group metals (PGM) operations

Lonmin’s South African listed shares fell 8.29 percent, while its London-listed shares slipped 6 percent by 1215 GMT after it said it had received a strike notice.

The miner said it was in the process of obtaining legal advice on AMCU’s notice.

Lonmin, which is in the process of being bought by Sibanye, has been crippled by soaring costs and subdued platinum prices.

The firm has been cutting spending to conserve cash and retain a positive cash balance, one of the conditions upon which Sibanye’s takeover is contingent.

“Any disruption is obviously bad news. The deal with Sibanye hasn’t been finalised yet and Sibanye wants Lonmin to be in a cash positive position so obviously if there is a prolonged strike this could affect things,” said Yuen Low, mining analyst at Shore Capital.

Workers led by the AMCU also plan to extend their strike at Sibanye-Stillwater’s gold shafts to its platinum mines next week, the company said on Thursday.

“We have strike plans. It’s not going to change our view,” said Sibanye chief executive Neal Froneman.

AMCU said in a strike notice document seen by Reuters that it intends to strike at Sibanye’s platinum operations for the duration of the protected strike at its gold mines and until the dispute is resolved.

Sibanye’s full-year loss, hit by multiple disruptions at its South African gold operations and a deferred tax charge, was limited by the strong performance of the company’s U.S. and South African platinum group metals (PGM) operations, the firm said during its results on Thursday.

Reuters

Newmont beats analysts’ estimates for quarterly profit

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Newmont beats analysts’ estimates for quarterly profit

Gold miner Newmont Mining Corp beat analysts’ estimates for quarterly profit on Thursday, boosted by higher gold production in its Colorado and Ghana mines and lower costs.

The company is set to overtake Barrick Gold Corp as the world’s largest gold producer following its acquisition of rival Goldcorp Inc, which is expected to close in the second quarter.

Newmont’s gold production rose nearly 8 percent to 1.44 million ounces in the fourth quarter ended Dec. 31, while its all-in sustaining costs to produce an ounce of gold fell to $835 from $910.

This helped cushion the impact of a 3 percent drop in average realized gold prices to $1,233 per ounce.

Newmont, which operates mines in the Americas, Africa and Australia, said copper production was largely flat at 11,000 tonnes.

The company’s net income attributable to shareholders was $2 million in the fourth quarter (https://reut.rs/2TVuMea) ended Dec. 31, compared with a loss of $542 million a year earlier.

Excluding one-time items, Newmont earned 40 cents per share, beating the average analyst estimate of 25 cents, according to IBES data from Refinitiv.

Reuters

Gold steady

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Gold steady

Gold was trading below the previous session’s 10-month peak yesterday as the dollar gained after minutes from the last US Federal Reserve meeting rekindled expectations of another rate hike this year. Investors were also keeping a close eye on talks to end a trade dispute between China and the United States.

Spot gold was steady at $1 338,76 per ounce as of 0753 GMT, having touched $1 346,73 per ounce in the previous session, its highest level since April 19. US gold futures were down 0,5 percent at $1 341,80 an ounce.

“There are both technical and fundamental reasons for this pull back in gold prices. It is under some technical selling pressure at the moment,” said Margaret Yang, market analyst with CMC Markets, Singapore.

“It was a clearly dovish statement by the Fed,” she said adding that the dollar rebounded after the minutes and gold traders are now taking profits.

The dollar index against a basket of six major currencies was up 0,2 percent.

The Fed, in the minutes of its latest meeting in January, said the US economy and its labour market remained strong, prompting some expectations of at least one more interest rate hike this year.

Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure.

Spot gold may retrace into a range of $1 321-$1 331 per ounce and it seems to have peaked around a resistance at $1 351 per ounce, according to Reuters analyst Wang Tao.

Reuters.

ZETDC sues Metallon Gold

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ZETDC sues Metallon Gold

The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has taken Metallon Gold Zimbabwe to court to compel the gold miner to settle a $9,3 million bill for power supplied to three of its mines.

The power utility filed summons at the High Court through its lawyers, Chihambakwe, Mutizwa and Partners claiming payment for electricity supplied to three mines, namely Mazowe, Shamva and How Mine.

Metallon is yet to respond to the lawsuit.

In its declaration filed alongside the summons, ZETDC said Metallon had failed to settle the debt despite several demands.

According to ZETDC, the duration of default by the gold mines spans from April 2016 to December 2018.

“The defendant (Metallon Gold Zimbabwe) is indebted to the plaintiff (ZETDC), during the period extending from April 2016 to December 17, 2018, in the sum of
$9 331 136,96, being charges in respect of power or electricity supplied by the plaintiff to the defendant at the latter’s special request and instance in terms of the running electricity supply contract between the two,” the power utility said.

“The said amount is for electricity supplied during the period extending from April 2016 to December 2018. The defendant has failed, neglected or refused to pay the above sum or amount despite demand.

“By reason of the said failure, neglect or refusal to pay the above sum or amount, the defendant is obliged to pay the said amount with interest thereon, at the prescribed rate which currently is 5% per annum.”

NewsDay

New monetary policy: The worst possible scenario to the miner

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New monetary policy: The worst possible scenario to the miner

The new monetary policy which was presented by the Reserve Bank of Zimbabwe governor Dr John Mangudya on Wednesday aimed at giving value to money through recognizing the fact that RTGS and the USD were not at par, may negatively lead the country to a genesis of serious economic meltdown that will haunt the miner instead of reviving them to their greatest potential.

Rudairo Dickson Mapuranga

Experts are of the view that the bank rate of RTGS dollar to the USD will never surpass that on the parallel market, again giving illegal money changers an edge when it comes to the handling of foreign currency than the banks.

“This means that the new policy instead of curbing black market forex trading have actually managed to strengthen it, the black market might again offer a handsome rate which is difficult to resist to those selling foreign currency and this might cause individuals to go and buy USD to the banks and Bureau de change and sell it to the black market, unless very serious measures have been put against illegal foreign currency dealers, the policy might turn to be just a piece of paper assigned to destroy the economy by giving individuals too much power indirectly” said one expert.

What does this mean?

Miners in particular gold artisanal miners have been receiving forex retention of 70 percent from Fidelity Printers and Refiners (FPR), however, with the new monetary policy outlines that these same miners will get forex retention of 55 percent which is a huge decrease considering the fact that small scale artisanal miners have been crying for 100 percent foreign currency.

However, the ability to retain mineral value remains the key point no matter what the market changes to, when one converts RTGS to USD the mineral will retain its value, under the old policy all minerals at 50 percent RTGS lost 39 percent of its value at 1:1 making it not feasible to mine, under the new policy the market rate might ensure the minerals will retain their value in equivalent to USD, on the other hand, the scarcity of the USD and forex might also prove be a stubborn point towards feasibility and equal value.

Also according to some miners, the idea that small scale artisanal miners will receive 55 percent retention might be swept under the carpet considering the idea that these miners have been receiving 70 percent from FPR when in actual fact large scale gold miners were getting 55 percent retention, at a window of more than 30 days of which artisanal miners would receive their money instantly, therefore in reality artisanal gold miners might find themselves in a comfortable situation than the rest of miners.

 

Miners were robbed?

Miners were receiving up to 70 percent USD retention and another 30 percent in RTGS which was pegged at 1:1 with the USD of which in actual fact RGTS and USD were trading differently on the market, which means miners were being robbed of their hard earned money through the 30 percent RTGS.

Reminiscence in policy

In April 2008 the then RBZ Governor Dr Gideon Gono issued a policy that is similar to this new monitory policy where banks and other legalized individuals were the only ones permitted to buy or sell foreign currency in an effort to stabilize the dollar, however, the policy failed to meet expectations, the country experienced a very high inflation, paper money was printed up to 100 Trillion, illegal forex dealers gained ground and became powerful until the Zimbabwean dollar was scrapped in 2009.

 

Mining firms operating in Sub-Sahari Africa urged to invest in renewable energy

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Mining firms operating in Sub-Sahari Africa urged to invest in renewable energy

A report published by Fitch Solutions states that due to the prevalence of off-grid remote mineral deposits in Sub-Saharan Africa and the fact that traditional grid-power tends to be unreliable in those mines, mining companies operating in the region should invest in renewable energy.

According to the market research firm, off-grid mines could benefit from reducing their dependency on diesel while taking advantage of the favourable climate conditions in the area.

“In SSA, the remote location of many important mineral deposits in combination with the underdeveloped state of power and transport infrastructure means that there are a large number of mines that are not connected to national or regional electrical grids. As a result, many of these mining operations are highly dependent on diesel-generated power, which is expensive to transport and subject to significant volatility in terms of pricing,” the report reads.

Fitch’s own forecast predicts global diesel prices to average $96.2/bbl by 2022, up from $89.6/bbl this year.

In the analyst’s view, miners’ dependency on the fossil fuel would be significantly reduced if they adopted renewable power, something that a few companies such as Newmont, IAMGOLD, and B2Gold, who are operating in remote locations in Sub-Saharan Africa and have invested in solar power, are already experiencing.

“In all cases these projects are hybrid in nature, meaning they combine solar and/or wind power, and in many instances energy storage, with diesel or HFO (heavy fuel oil) through microgrids that are not connected to the state-grid. Decentralised power generation in the form of hybrid microgrids has advantages beyond price, allowing miners not only to reduce their exposure to expensive fossil fuels but also make use of them as back-up power when solar or wind power is unavailable,” the report states.

Fitch’s experts also suggest that grid-connected mines would also benefit from incorporating renewables to their power mix, as they can play a role as potential remedies to the challenges associated with the unreliability of conventional grid power across the region, where power outages and exorbitant electricity prices are commonplace.

“Key mining countries that are highly dependent on hydropower, such as Zambia, the DRC or Namibia are prime examples of markets where grid-connected mines can benefit from adopting renewables. In Zambia for example, severe drought over 2016/17 highlighted the risks associated with the country’s over-dependence on hydro-power, as it resulted in a tariff dispute between the government and the country’s major copper miners,” the market researcher exemplifies.

Poor corporate governance and financial management of the domestic power sectors in countries where miners operate are also highlighted as major risks that should lead companies to avoid relying on their grids.

From a more positive point of view, Fitch says that favourable climate conditions in Sub-Saharan Africa should push more miners towards renewables. “Africa receives more hours of sunshine during the course of a year than any other continent on earth, meaning solar will remain the renewable power of choice for miners looking to reduce their exposure to fossil fuels,” the firm’s analysis explains.

Mining.com

South African miner Sibanye raises loss estimate by $100 million-plus

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South African miner Sibanye raises loss estimate by $100 million-plus

South Africa’s Sibanye-Stillwater expects its full-year attributable loss to be more than $100 million greater than guidance in a trading statement last week, it said on Wednesday, after a review of tax changes in the United States.

Sibanye now expects a headline loss per share of 1 cent, compared with 12 cents in 2017

The gold and platinum miner’s shares fell into negative territory on the news that it expects the loss to reach 2.5 billion rand ($177 million) rather than 1 billion rand because of the tax changes.

“A further review of the effects… has resulted in an amendment to deferred tax,” it said in a stock exchange announcement.

“This change has no impact on the 2018 cash flows and is expected to unwind over the life of the Stillwater operations.”

Sibanye, which produces platinum and palladium in the United States, said it now expects a headline loss per share of 1 cent, compared with 12 cents in 2017. It had been forecasting headline earnings per share of 65 cents.

Headline earnings per share is a key profit measure in South Africa that strips out one-off items.

The company said a number of tax changes were made in New Jersey in the six months to December, the most significant of which resulted in tax being calculated together on all of the company’s U.S. entities.

This resulted in a revised deferred tax rate for Sibanye of a little less than 1.5 billion rand.

“We will further investigate tax planning alternatives to minimise this additional deferred tax,” Sibanye’s statement said.

Reuters

New Mines bill includes provisions to regulate artisanal miners

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New Mines bill includes provisions to regulate artisanal miners

JUSTICE minister Ziyambi Ziyambi has told Parliament that the forthcoming Mines and Minerals Bill will include provisions that will regulate the conduct of artisanal miners, and ensure their safety when carrying out underground mining activities.

The minister was responding to questions in Senate last week after Manicaland Senator Keresencia Chabuka asked him to explain government policy on small-scale mining in light of the Battlefields disaster, where 24 artisanal miners perished underground after drowning.

The mine collapsed after a dam burst its wall and water flooded the mineshafts.

The incident has also raised serious concerns over the safety of miners and disaster management responses by government’s Civil Protection Unit.

“The Ministry of Mines is in the process of capacitating small-scale miners to work in groups or syndicates, and they will be given equipment to ensure that their mining activities become safe,” Ziyambi said.

“I am sure that Parliament is aware of the Mines and Minerals Bill that was brought back to Parliament, and now it will also touch on issues of artisanal miners and regulate their conduct so that they can mine safely.”

The Mines and Minerals Bill was brought before Parliament in 2015 to amend the previous 1961 law, which had become outdated.

In 2018, both Houses passed the amendments, but President Emmerson Mnangagwa refused to sign it into law after stakeholders complained that their input had not been included, adding that the amendments did not include issues of prospectors.

The Bill has been left for further consideration so that it includes issues pertaining to artisanal miners, the mining cadaster system as well as those to do with exploration.

“The challenge with artisanal miners is that even when they are told that there is danger, they continue to mine in those mines. For example, at Eldorado Mine in Chinhoyi, they go there at night, despite the fact that the mine has been condemned,” Ziyambi said.

The minister was further asked by Mashonaland Senator Tapfumaneyi Wunganayi to explain why government was failing to close the mines, or even place guards to ensure that illegal mining activities were curbed.

“When these areas close, they are well secured to ensure that no one enters, but you know the country we live in, there is a lot of corruption taking place and they can pay the guards, then later on when there is a challenge, they let us know. Now we are putting in place measures to ensure they mine safely,” Ziyambi said.

NewsDay

New monetary policy: What does this mean to the miner?

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New monetary policy: What does this mean to the miner?

In an endeavor to eradicate an inflationary environment in Zimbabwe that can be said to have possibly been caused by the previous monetary policy which its aim was to stabilize the bond and create a stable economy, the Reserve Bank of Zimbabwe governor John Mangudya announced the new monetary policy yesterday that is meant to restore value to money.

Rudairo Dickson Mapuranga

According the policy all gold miners of particular interest small scale and artisanal miners will receive foreign currency retention of 55 percent from the 70 percent which they has been complaining to be not enough, other miners for example chrome miners et al will receive 50 percent retention from their productions.

Effects of the policy to the miner

The miner who has been lamenting for 100 percent USD retention is being rewarded the 100 percent or something close to indirectly, the miner is going to receive part of their money in RTGS pegged at a market rate of the day, which will be totally different from the previous one which was dictated at 1:1 without respecting the market forces.

The ability to retain our mineral value remains the key point no matter what the market changes to when you convert RTGS to USD the mineral will retain its value, under the old policy all minerals at 50 percent RTGS lost 39 percent of its value at 1:1 making it not feasible to mine, under the new policy the market rate might ensure the minerals will retain their value in equivalent to USD.

Possible reasons for the policy

Miners have been accused of fueling the black market with USD, a practice that does not violates the country’s monitory laws but kills the economy. The government recently legislated Statutory Instrument 122A of 2017, Exchange Control (Amendment) Regulations, 2017 (No.5), which criminalises the illegal trading in foreign currency.

With the introduction of Bureau de Change some black market forex traders might be forced to register to become legal thereby reducing the risk of foreign currency being in the hands of unregulated individuals who would change the rates whenever they think it is necessary to.

However, with the introduction of the February 2019 monetary policy, it would be unrealistic for miners to facilitate forex to the black market, when they have access to foreign currency at the bank, the bond might  phase out since people will be primarily be working with RTGS and forex. If miners will get their RTGS money in the equivalent market rate, the economy and value of money might be respected.

What changed?

The small scale and artisanal gold miners who were receiving a retention of 70% and were at the same time crying for 100 percent USD will now be getting less than what they have been getting when it comes to USD but in actual fact the value might have been increased from the previous assertion.

The negative side of the policy to the miner

The policy although created to give value to money might again cause a massive inflation, due to little exports in the country, forex might be scarce thereby promoting unscrupulous movement of money from the banks to the black market, the new monetary in actual fact might strengthen the position of the black market trade and money laundering than curbing it.

All in all, the policy might just be reducing value to money instead of giving value, fly rocketing of prices might follow.

Vast Resources partners Chiadzwa Trust

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Vast Resources partners Chiadzwa Trust

AIM-listed Vast Resources, which presently operates gold mines in Zimbabwe, has been granted mining rights under a joint venture arrangement with the Chiadzwa Community Development Trust to explore and mine diamonds in Manicaland.

“The Chiadzwa Community Development Trust has in principle been granted the right to mine diamonds in joint venture on the Heritage Concession (Block T1A of the Marange Diamond Fields) and has appointed Vast as its joint venture partner in the exploration and mining of diamonds in the area,” said the company in an update on its website.

It said further details regarding the project would be released to the market in due course.

In 2016 companies that previously mined diamonds in the Chiadzwa area of Marange were merged as Government established the Zimbabwe Consolidated Diamond Company (ZCDC) with a view to promoting transparency in the Manicaland gemstones operations.

Government is in the process of finalising a diamond policy to ensure the mining sub-sector harnesses its full potential and benefits the masses.

Last December, Cabinet approved the Zimbabwe National Diamond Policy, which is expected to regulate the diamond mining sector and ensure accountability in the mining, processing and selling of the precious mineral.

The policy will see only ZCDC, Murowa Diamonds and other companies to be approved by Government undertaking diamond exploration and mining in the country.

The policy covers all stages of the diamond value chain, namely exploration, mining, processing, valuation, marketing, beneficiation, value addition as well as issues of security and law enforcement.

It is also hoped that under the envisaged diamond policy, any other entity or person with diamond mining title will be allowed to approach any one of the approved companies for joint venture arrangements.

Under the proposed diamond policy, private players will also participate in value addition after cleaning and sorting and after obtaining the necessary approvals.

Ten percent of diamonds will be reserved for local value addition.

The Chronicle

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