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STABBED IN THE BACK

By: Darlene Creamer New Minerals Minister Mosebenzi Zwane chose to take the mining industry by surprise when he unilaterally gazetted a revised Mining Charter without consulting a soul in mainstream mining. If his objective is to halt investment and retard the South African economy, then he will have achieved it... 

STABBED IN THE BACK

THE R25 THAT AVERTED A STRIKE

By: Martin Creamer The Association of Mineworkers and Construction Union (AMCU) demanded big on the platinum belt – R12 500 a month entry level wage or the strike would continue. And it did, for five long months. In gold, AMCU has been infinitely more moderate and its strike threats exceedingly short-lived. An... 

THE R25 THAT AVERTED A STRIKE

GOLDEN GENUFLECTIONS

By: Martin Creamer Collective gold wage agreements have been thrown into disarray with the sidelines agreement struck by the Association of Mineworkers and Construction Union (AMCU) and Sibanye Gold. The National Union of Mineworkers, Solidarity and UASA unions are feeling sore that the three-year deal they struck... 

GOLDEN GENUFLECTIONS

LEGAL PROBE

By: Martin Creamer A US law firm is reportedly taking steps to build a class-action lawsuit against the world’s biggest mining company. Business Wire reports that Lundin Law is urging investors with losses to contact it regarding possible violations of federal securities laws by BHP Billiton. The wire service adds... 

LEGAL PROBE

THE LONG WAIT

By: Martin Creamer The price of the basket of platinum-group metals (PGMs) in dollars is so low that even when converted into rands, it is still way off that of its precious metal cousin, gold, which has not only increased in dollars, but also moved into record territory in rands. Regrettably, the dollar prices of... 

THE LONG WAIT

IRON-WILLED, IRON-FISTED

By: Martin Creamer A bitter fight is under way Down Under over the deliberate over-supply of iron-ore by major producers as a way of crushing competitors. But all that has been crushed, say smaller iron-ore producers, is the Australian economy. Cliffs Natural Resources CE Laurenco Goncalves pulled no punches at the... 

IRON-WILLED, IRON-FISTED

TRUCULENT TAX TERRIER

By: Martin Creamer The South African Revenue Service (Sars) is digging up the past and imposing sky-high tax assessments on objecting mining companies. Sars first bit Kumba Iron Ore’s Sishen Iron Ore Company, on which it imposed a R5.5-billion assessment. Now the truculent tax terrier has locked its jaws on Exxaro,... 

TRUCULENT TAX TERRIER

THE LAST STRAW

By: Martin Creamer South African Revenue Service (Sars) has imposed a R5.5-billion tax assessment imposed on the Sishen Iron Ore Company (SIOC) for the tax years 2006 to 2010. To add insult to injury, the assessment includes R3.7-billion in interest and penalties. SIOC, in which JSE-listed Kumba Iron Ore has a... 

THE LAST STRAW

THE OUTLIER

By: Martin Creamer When a mining company is international it has the advantage of being able to compare jurisdictions and performance. One company which has done that graphically for the past two quarters is AngloGold Ashanti and the performance of South African gold mines within its constellation of 19 operations... 

THE OUTLIER

ELEPHANT TO MOUSE

By: Martin Creamer The once-iconic Anglo American, an important participant in the development of the South African economy, is in the process of becoming a pale shadow of its former self. A company that had 650 assets in the 1980s is heading for a mere 16 assets in 2016. In between, it dropped its primary listing... 

ELEPHANT TO MOUSE

BUYERS' MARKET

By: Martin Creamer “When they cry, it’s time to buy”, goes the saying that potential investors and bankers are currently directing towards the stressed resources sector. US Global Investors CEO Frank Holmes describes the entire mining industry’s stocks as resembling “a big Walmart sale”, in what has become the... 

BUYERS' MARKET

JOB CUTS

By: Martin Creamer Mining companies in South Africa have given advance notice of 32 000 job cuts as commodity prices decline, Mineral Resources Minister Mosebenzi Zwane has told the media. Mining accounts for more than half of South Africa’s exports and employs 440 000 people, which is critical in a country with a... 

JOB CUTS

EDGING TOWARDS FIRE SALES

By: Martin Creamer Mining companies in asset-disposal mode have been at pains to assure shareholders that fire sales of mining assets will not be countenanced. But as conditions worsen, there are early signs that some are edging towards concluding that getting low prices may be better than not getting anything at... 

EDGING TOWARDS FIRE SALES

ROCKY AND ROUGH

By: Martin Creamer There is a lot of bearish talk in mining right now as the Chinese economy slows more rapidly than expected, low commodity prices drive down prospects and profit growth looks far off. Mining assets are being subjected to the words sell, close, downsize and cut as mining-company CEOs resist going... 

ROCKY AND ROUGH

BALLOONING RAND GOLD PRICE

By: Martin Creamer The gold price in rands has ballooned well beyond the R550 000/kg level, which is a great source of relief to the hard-pressed gold-mining industry and its shareholders, who saw share values rise sharply in a non-gold-mining world currently characterised by sharp share value decline. But the cost... 

BALLOONING RAND GOLD PRICE

RESTRICTED MOBILITY

By: Martin Creamer Mining is merely moving from its 2015 annus horribilis to its 2016 year of misfortune. The share prices of mining companies are retaining their bottom-of-the-barrel penchant, commodity prices are remaining in the doldrums and over supply is refusing to depart the scene. Still well in the red on... 

RESTRICTED MOBILITY

SNAP OUT OF IT

By: Martin Creamer Seven-year-old Snap Lake diamond mine in Canada, which has still to turn a profit, will have to snap out of it or be snapped off. News reports state that closure is one of the options De Beers is considering for its first mine to come into production outside of Africa. The Northwest Territories... 

HURRY UP

By: Martin Creamer South Africa can score quick wins with the right focus, Goldman Sachs Sub-Saharan Africa investment banking head Colin Coleman said last week after presenting data-rich evidence of South Africa’s financial sector and corporate strong points. Speaking at the Gordon Institute of Business Science,... 

HURRY UP

BATTEN DOWN MORE

By: Martin Creamer An endless battening down of hatches is under way in the mining industry, where bearish macroeconomic news out of China and a now-likely US interest rate rise in December, continues to hurl commodity prices on stormy waters. The threat of rising financing costs in the current environment is... 

BATTEN DOWN MORE

WRONG WAY UP

By: Martin Creamer Running a mining business in the current negative environment has been being likened to running up an escalator the wrong way. With prices down and costs up, mining companies go flat out to stay in the same place. “But at least it’s keeping us fit,” AngloGold Ashanti CEO Srinivasan... 

WRONG WAY UP

STREAMING OVER THE (H)EDGE

By: Martin Creamer Hedging is so yesterday and streaming is so today with streamers buying up metals still in the ground at low, fixed, predetermined prices and sellers getting large upfront amounts followed by ongoing trickles. A long-term streaming agreement was last week entered into between Glencore's wholly... 

STREAMING OVER THE (H)EDGE

INDUSTRY WRECKING BALL

By: Martin Creamer The Davis Committee on Tax, which was tasked in the 2013 Budget with supporting inclusive growth, employment and development, may not be taking these terms of reference to seriously judging from the one-size-fits-all recommendations that take a wrecking ball to mining. Felled by the... 

INDUSTRY WRECKING BALL

WRONGLY INCENTIVISED

By: Martin Creamer Mining company shareholders have become emaciated watching CEOs making a ton of money, investment bankers a killing and fund managers a nice spread. To blame is misguided share price incentives and rubber-stamping boards of directors, who also score from the system. That message came over loudly... 

WRONGLY INCENTIVISED

'SOLD' IS THE NEW BOLD

By: Martin Creamer Anglo American Platinum has sold its Rustenburg Platinum and is offering Union Platinum for sale. Anglo American has sold the Mantos Blancos and Mantoverde copper mines in Chile to investment company Audley Capital of the UK and is also, according Chilean media, fine-tuning details to unload the... 

'SOLD' IS THE NEW BOLD

MINING'S NEW SUPERMAN

By: Martin Creamer Neal Froneman is using the resources downturn to assemble a suite of diversified assets that could make his Sibanye Gold the new domestic superman as the upturn unfolds. The Sibanye CEO, who has put up his hand to be South Africa’s next mining champion, is wasting no time in bulking up on... 

MINING'S NEW SUPERMAN

CHESS STRESS

By: Martin Creamer The surprise appointment of Mosebenzi Zwane as South Africa’s new Mineral Resources Minister saw Ngoako Ramatlhodi’s 16-month ministerial spell come to an abrupt end. What is now in store for the hard-pressed mining industry is anyone’s guess. However, at the time of going to press, the new... 

CHESS STRESS

TAKING THE MONKEY OFF VENKAT'S BACK

By: Martin Creamer Gold-mining company Randgold Resources, which has spent two decades honing its discovery and development philosophy, is now leaping into the unknown by undertaking to fix a mine that has huge amounts of historical baggage going back as far as 1897. For AngloGold, the 118-year-old Obuasi gold mine... 

TAKING THE MONKEY OFF VENKAT'S BACK

CROSSING SWORDS

By: Martin Creamer Mmakau Mining chairperson Bridgette Radebe and Mineral Resources Minister Ngoako Ramatlhodi have reportedly crossed swords over the Minister’s ratification of the sale to the JSE-listed Exxaro of Total Coal South Africa (TCSA). Mmakau is the 26% black economic empowerment (BEE) partner in TCSA’s... 

CROSSING SWORDS

BOUNDLESS BELT BULLYING

By: Martin Creamer Mining companies are tightening their belts in unprecedented fashion across the entire mining world. The giants and the minnows are cutting costs, reducing capital expenditure and dropping the word exploration right out of their vocabularies. Suddenly the two words “non core” are appearing as... 

BOUNDLESS BELT BULLYING

SICK PLATINUM

By: Martin Creamer In their struggle to stem job losses, government, business and labour continue to search for ways to create greater demand for platinum, the precious metal that South Africa has in such abundance but which is failing to fetch even sustainable rand prices. Top brass calculate that most local... 

SICK PLATINUM

MOMENTOUS IMPLOSION

By: Martin Creamer Against the background of the share price of the London- and Johannesburg-listed Lonmin suffering unprecedented implosion, the Marikana-stricken platinum mining company remains committed to much more downsizing. In addition to 1 400 employees already leaving the business, a Section 189... 

MOMENTOUS IMPLOSION

LOCKING HORNS

By: Martin Creamer The R2-billion that State power utility Eskom is claiming for failure to meet specifications has resulted in Optimum Coal going into business rescue, which is putting Eskom’s 2 000 MW Hendrina power station in a precarious position. Should the business rescue attempt fail, liquidation will... 

LOCKING HORNS

TIED DOWN

By: Martin Creamer Like Gulliver, South Africa’s giant mining industry is being tied down. As Gulliver displeased the powers of Lilliput, the mining industry has displeased government in wanting to reduce employee numbers. As mining leadership has reiterated, decisions to reduce jobs are never taken lightly, with... 

TIED DOWN

JOB JIBES

By: Martin Creamer Jobs jibes are flying with mining companies going all out to cut costs to survive and government pleading for job retention. African National Congress secretary general Gwede Mantashe accused Anglo American CEO Mark Cutifani of laziness in deciding to cut 6 000 mining jobs and Mineral Resources... 

JOB JIBES

COMMODITY CRUMBLE

By: Martin Creamer The World Bank forecasts that all main commodity price indices will decline in 2015, owing to abundant supplies and, in the case of industrial commodities, weak demand. The outlook is particularly pessimistic for metals prices, which are now projected to decline more as a result of capacity... 

COMMODITY CRUMBLE

GOLD ON THE ROPES

By: Martin Creamer Unusually high gold selling last week resulted in gold prices lurching to a five-year low. The most actively traded contract for August delivery fell $3.30, or 0.3%, to settle at $1,103.50 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement since March... 

GOLD ON THE ROPES

MINERAL RICH, MINING POOR:  

By: Darlene Creamer Despite having been mined intensively for a hundred and plenty years, South Africa still has vast mineral resources. As Ian Robinson points out in his doctoral thesis on the evolution of South African mining, South Africa continues to rank first in chrome, gold, manganese and platinum reserves;... 

MINERAL RICH, MINING POOR:

COMMODITIES CRASH 

By: Martin Creamer The prices of metals and minerals have fallen, share prices have tumbled and once mighty mining houses are shaky. Iron-ore at $50/t is bruising, platinum at $1 000/oz is maiming, not even China’s stock rout and the Greek tragedy has lifted gold, diamonds have lost their sparkle to a troubled... 

COMMODITIES CRASH
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