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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

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
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