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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

MIXING AND FIXING

By: Martin Creamer Both former African National Congress MP Professor Ben Turok and former Eskom adviser Mike Rossouw last week urged government and business to create policies together to end South Africa’s current economic stagflation crisis. Turok lamented South Africa’s policy doldrums and Rossouw its complex... 

MIXING AND FIXING

MINING AT THE EDGE 

By: Martin Creamer Several mining companies running into negative margins have already reported their positions to the South African government in compliance with Section 52 of the Minerals and Petroleum Resources Development Act, which deems mining companies to have entered dangerous territory when margins fall... 

MINING AT THE EDGE

HUNGRY DRAGON

By: Martin Creamer The Chinese dragon is reportedly still keen to devour more of the stressed assets sprawled across South Africa’s headgear country. Proposals by Chinese investors to buy marginal South African precious metal and mineral assets are popping up regularly but few are more visible currently than... 

HUNGRY DRAGON

TIGHTROPE WALKING

By: Martin Creamer Global mining’s tough 2014 fight is poised to escalate this year as companies struggle worldwide to emerge from depressed markets, says PwC Africa mining head Michal Kotze. CEOs walking a tightrope cutting costs to match low prices. Aggravating the situation are government intervention, industry... 

TIGHTROPE WALKING

LET IT FLOW THROUGH

By: Martin Creamer Strong calls were made on Wednesday for South Africa to come into line with Canada and Australia by introducing effective incentives for its junior miners as a way of spurring mineral exploration. Bakgatla-Ba-Kgafela Investment Holdings CEO Noah Greenhill urged that a collective go to Treasury to... 

LET IT FLOW THROUGH

CUTTING’S THE NEW PROFIT:

By: Martin Creamer With cost cutting now baked into numbers, the main drivers of relative profitability in the iron-ore sector will be foreign exchange lifts, freight, premiums and discounts for grade and quality. So says London mining analyst firm Liberum Capital, which says that these variables will determine the... 

CUTTING’S THE NEW PROFIT:

CHARTER DUST-UP

By: Martin Creamer The government is insisting that the mining industry has failed to comply with the Mining Charter’s black ownership requirement, despite the Chamber of Mines proving that its members – who make up 90% of the industry – have more than complied. Rather than celebrating the achievement, the... 

CHARTER DUST-UP

PEDESTAL PRESSURE

By: Martin Creamer The global iron-ore giants are coming under pressure that could see them move slightly off their esteemed credit rating pedestals. Credit rating agency Standard & Poor’s warned earlier this month that it might lower the A+ credit rating that the august BHP Billiton has cherished for so long. The... 

PEDESTAL PRESSURE

IRON-ORE ECONOMICS 101

By: Martin Creamer Australian iron-ore mining company head Andrew Forrest has launched a scathing attack on two of the world’s biggest iron-ore producers, Rio Tinto and BHP Billiton, accusing them of forgeting that the iron-ore they are extracting is a national patrimony that should not be squandered. Being... 

IRON-ORE ECONOMICS 101

IRON-ORE AND SINGAPORE

By: Martin Creamer Australia’s tax commissioner Chris Jordan has accused multinationals including iron-ore majors Rio Tinto and BHP Billiton of giving inaccurate evidence to the Senate inquiry into corporate tax avoidance. Jordan said Rio Tinto's paying 5% tax or $44-million in 2014 on profit of $719-million might... 

IRON-ORE AND SINGAPORE

SOUTH32 CLOCK TICKING

By: Martin Creamer With only five days to go before the shareholders of BHP Billiton vote on the South32 demerger, commodity price and other circumstances have changed complexion of this plan, which spins off BHP Billiton’s aluminium, coal and manganese assets in South Africa. BHP Billiton’s board last month... 

SOUTH32 CLOCK TICKING

COMING UNSTUCK

By: Martin Creamer The alacrity that diversified major Glencore displayed in closing its coal trading office in Singapore and relocating it to Australia put it in a good light at the Senate tax inquiry in Australia. In sharp contrast, stronewalling and shilly-shallying skittled the reputations of both by BHP... 

COMING UNSTUCK

AUSTRALIAN PROTECTIONISM

By: Darlene Creamer Australia’s treasurer has reportedly told business representatives he would not allow Glencore to merge with Rio Tinto over concerns about losing tax revenue. Glencore has since indicated its willingness to close its Singapore sales office and consolidate the business in Australia, amid media... 

AUSTRALIAN PROTECTIONISM

TAX TROUBLE FOR PROSPECTORS

By: Martin Creamer Insult has been added to the lack of incentives for prospecting companies by an alarming 3% add-back amendment to the transfer pricing legislation, which confronts foreign-funded prospecting companies with real tax cash costs. KPMG corporate tax head Muhammad Saloojee reports that the 3% add... 

TAX TROUBLE FOR PROSPECTORS

HAVING CAKE AND EATING IT TOO

By: Darlene Creamer References to BHP Billiton’s proposed new South32 business as DudCo have disappeared from analyst coverage, a Fortune writer has noted. He puts the change down to the falling prices of iron-ore and oil, which remain with BHP Billiton, and the steadier prices of aluminum, manganese, nickel and... 

HAVING CAKE AND EATING IT TOO

POWER PRICE PULL-OUT

By: Darlene Creamer POWER PRICE PULL-OUT – The decision of Assmang and its partner African Rainbow Mineral (ARM) to place its long-standing Machadodorp ferroalloys operation on care and maintenance at the end of April was largely the result of uncompetitive electricity tariffs, ARM CEO Mike Schmidt said at this... 

POWER PRICE PULL-OUT

WIN BACK INVESTOR SUPPORT

By: Martin Creamer Mining was last week urged to win back lost investor support by making full use of modern tools that guide capital return with unprecedented accuracy. “Let's not focus on the fish eagles when you’re in the swamp and up to your armpits in crocodiles. Let's focus on the crocodiles,” was the comment... 

WIN BACK INVESTOR SUPPORT

COAL COMFORT

By: Martin Creamer Public enterprise Eskom wants coal for its power stations, public enterprise Transnet Freight Rail (TFR) wants coal for its trains and the Public Enterprises Department is in charge of both. Eskom has in the past called for coal to be declared strategic and TFR wants coal exporters to sign... 

COAL COMFORT

SOUTH32 TO RESCUE

By: Martin Creamer Mining giant BHP Billiton managed to pull a free cash flow rabbit out of a depressed commodity price hat in the six months to December 31. But another rabbit will be needed in the second half and that company sees it coming in the form of South32, the demerged aluminium, coal, manganese, nickel... 

SOUTH32 TO RESCUE

SPARKLING TAILWIND

By: Darlene Creamer While Anglo American is being forced to fend off strong price headwinds across most of its diversified portfolio, at least one tailwind propelled it forward in 2014 – diamonds. Anglo subsidiary De Beers managed to sell 34.4-million diamond carats, which delivered earnings before interest and tax... 

SPARKLING TAILWIND

ANGEL INVESTOR

By: Darlene Creamer There will be an inclination by some to see the offer Chinese capital management group Heaven-Sent has made for the struggling Johannesburg-listed Village Main Reef precious-metals mining company to be taken literally as something that has been sent from heaven to assist this junior that has... 

ANGEL INVESTOR

GOLDEN TURNAROUND

By: Darlene Creamer Neal Froneman and his Sibanye Gold team have done well to devise a turnaround at the loss-making Cooke 4 gold-mine shaft on Gauteng’s West Rand and keep 213 more mineworkers employed than was originally expected by adding an additional 22 working shifts, which will bring in R50-million more... 

GOLDEN TURNAROUND

DIAMOND PRICE LAID BARE

By: Darlene Creamer Diamond price weakness will continue until new sources of liquidity are found, say Liberum Capital mining analysts Ben Davis and Richard Knights. The share price of London-listed Gem Diamonds fell sharply after Petra Diamonds announced it was experiencing weak pricing and the analysts are... 

DIAMOND PRICE LAID BARE

MINEWORKER CASH BURN 

By: Martin Creamer Mineworkers lost R16.8-million in forfeited wages and benefits during last week’s illegal seven-day strike at Northam’s Zondereinde platinum mine in Limpopo province. That followed the R100-million loss by the same mineworkers during their 2013/14 strike and the absolutely colossal R24-billion... 

MINEWORKER CASH BURN

CAPSIZED JUNIORS

By: Martin Creamer Low commodity price waves have overturned several junior mining companies as the mining sector goes into 2015 a little worse for wear. Two coal juniors, the Sydney-listed ZYL and the London Aim-listed Beacon Hill, put themselves into voluntary administration last week; antimony junior Cons Murch... 

CAPSIZED JUNIORS

PRICE DISCOMFORT

By: Martin Creamer Weak currencies do provide a cushion in times of commodity price fall but the extent to which they are doing that in the current low price environment is, in the main, failing to take away enough hardness. What is worse is that the current commodity price fall does not appear to have short-term... 

PRICE DISCOMFORT

PLATINUM PURGE 

By: Darlene Creamer A spotlight is at last being shone into the dark area of secret platinum stocks, which have been befuddling our platinum price right through the longest period of under supply in South Africa’s history – the five-month strike on the platinum belt. This light is giving a glimpse of what the new... 

PLATINUM PURGE

TAILING TINTO

By: Darlene Creamer A banker who played a key role in the BHP Billiton merger has reportedly told fund managers in London that the coming together of Rito Tinto and Glencore is inevitable, despite the rebuff Glencore CEO Ivan Glasenberg received from Rio Tinto CEO Sam Walsh when he raised the possibility earlier... 

TAILING TINTO
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