Zuma and Mandela Families Not paying Gold Miners, Services or Eskom, in Privately Owned Gold Mines

Thank you so much to all who signed the petition against Eskom (previous post) there is still time to sign if you have not already done so… PLEASE!

… imagine if Eskom DOES get the R29 billion… OMIGOSH.. they’ll go on a world cruise and S Africans will STILL be in the dark! they can’t build coal mines.. one of the country’s biggest gold mines -> *DRUM ROLL* owned by members of Nelson Mandela’s and Jacob Zuma’s direct families (they’re not supposed to have interests in these BTW) has not paid their miners for 2 months, has not paid their Eskom (Government owned) electricity accounts nor any service bills… the miners are now protesting, it is getting violent…

THESE GOLD MINES  ARE OR WERE THE GREATER SOURCE OF INCOME OF OUR ONCE THRIVING NATION – NOW OWNED BY THE AMOEBAE WHO INSTEAD OF PAYING THE PEOPLE WHO RISK THEIR LIVES DAILY TO GO DOWN INTO THESE NON-MAINTAINED GOLD SHAFTS AND DIG FOR GOLD WHICH BENEFIT ONLY THE ZUMA AND MANDELA FAMILIES, TAKE THE MONEY AND EITHER BUY ANOTHER HOUSE, GO ON HOLIDAY OR GET MARRIED AGAIN…

I need to find some links to post about this…

Welcome to South Africa where living has now become impossible and leaving is just as impossible

As the world recession tightens its grip on South Africa, industrial and social unrest is spreading across the country.

Unemployment has risen to almost 25 percent, manufacturing is down by a quarter compared to last year, the plight of the poor is worsening and the trade unions are demanding pay rises above inflation.

Thousands of people have been on strike, or have been planning to do so, for over a week. Workers in the coal, diamond and gold mines have rejected the latest pay offers, while oil industry workers went on strike on Monday after wage talks failed. On Wednesday, people living in townships took to the streets to protest against their poor living conditions.

Pay rises
Rail workers, doctors and staff at South African’s public broadcaster SABC are also on strike, demanding pay rises of between seven and eleven percent. Doctors have even demanded a 50 percent pay rise.

In the wake of this unrest, ANC Youth League’s radical leader Julius Malema is stirring things up by calling for South Africa’s mines to be nationalised. CREDIT SOURCE

South Africa gold output declines

Another story outlinging challenges facing Gold Mining despite the stories abounding about Zuma and Mandela not paying their staff, services or Eskom,  for over 2 months – CREDIT MINEWEB

Much of South Africa’s history, and its sense of itself as a nation, rest on our gold mining industry. For decades, South Africa was the world’s largest gold producer, our biggest city – Johannesburg – is the product of our gold mines, and many of our biggest companies were born in the gold fields.Thus it’s hard for us to accept the fading of our gold industry, even though the evidence of its demise is incontrovertible. The problem, in a nutshell, is that we have mined out most of the country’s safely and cheaply accessible gold. There’s plenty of gold left in the ground, but it’s buried too deeply to be mined safely and economically within the context of South Africa’s laws, cost structures and regulations.

There are a number of factors influencing the decline in our gold industry, including issues of mine safety, rising costs, and the nature of South Africa’s gold deposits.

Mine safety and SA gold deposits

In South Africa, mine safety is a major flashpoint among mineworkers, government and mining companies. Many areas of the country have been continuously mined for decades, meaning that most of the easy-to-access gold has been dug up and miners must go ever deeper to get to the yellow metal. South African mines are the deepest in the world, and the risk of accidents increases with the depth of the mines.

Mine accidents and deaths are not inevitable on deep shafts. In fact, research suggests that the majority of accidents in South Africa’s mines are caused by a failure, by mine workers and management, to adhere to safety procedures. But whatever the causes, South African mines have a relatively high fatality rate compared to mines in the United States, Canada and Australia, although our safety record is much better than those of mines in places like China.

When evaluating mining projects, local mining companies must decide whether or not a shaft can be mined safely, and whether safe mining of the shaft would be prohibitively expensive. Safety and cost concerns have led to many mine shafts being shuttered, leaving the millions of ounces of gold in them untouched.

Rising costs

Due to various pressures, costs on local mines have been edging upwards for years.

Wage costs have been rising fast for several years, and continue to do so. Currently, there is a dispute over wages between South African gold mining companies and various trade unions, which may lead to a strike. Mineworkers are demanding a 15% wage increase, while employers are offering 8 to 10%; both the demand and offer are higher than the official inflation rate of 8%, and will only add to the already steep costs of mining South African gold.

Other costs have also increased, particularly electricity. Since January last year, Eskom’s tariffs have leapt upwards. In June last year, Eskom was granted a 27% tariff increase, and in June this year, the utility got an extra 31.3% increase. The National Energy Regulator of South Africa also said that South Africans could expect another three years of 20 to 25% increases.

Rising electricity costs are a burden on local mines, and constrain their capacity to grow and increase production.

Gold prices and the rand

Another challenge facing local mines has to do with the way that mine costs and income are structured.

Basically, the gold price is set internationally and is denominated in dollars. Although we see the gold price changing on a moment-by-moment basis on the markets, some mines enter contracts to sell particular volumes at certain prices, although this is becoming less common. Either way, local mines are price takers – the price of gold is set outside their control and they must accept what they can get.

On the flip side, local mines costs are denominated in rands. They pay their workers in rands, they pay Eskom in rands, and so on. Therefore, they are exposed to currency risk. If the rand is weak against the dollar they do well, when the rand strengthens they struggle.

By way of explanation, imagine the gold price is $100 per ounce. If the rand is at R10 to the dollar, then local mines receive R1 000 per ounce of gold. If their costs are, say, R500 an ounce, they do well. However, let’s say the rand strengthens to R5 to the dollar, then they would just be breaking even, earning R500 an ounce and spending that all on their costs.

The volatile currency makes it difficult for local mines to plan effectively, and makes them hesitant to invest in increased capacity.

There are other issues in South Africa, including a burdensome regulatory regime that has also depressed investment. All these factors – some the unavoidable consequences of geological reality, others created by inefficiencies in the local economy and regulatory regime – have combined to erode the once-mighty South African gold industry.

The question that remains is what we will develop to replace gold mines as our primary engine of growth? One candidate is platinum mining, but many of the problems that beset gold mines are also problems for the platinum mines. Unfortunately, there is a shortage of other candidates, but South Africa will need to find something to inspire and power our economy.

This story was first published on Discovery Invest

From the Daily Maverick:

http://www.thedailymaverick.co.za/article/2009-11-14-Is-SAs-gold-mining-industry-turning-into-Zimbabwe-Lite

Here’s an interesting factoid: despite having about half the world’s known gold reserves, South Africa will produce less gold this year than it did in 1906, when horses were the predominant form of public transport. But amazingly, the extraordinary decline of South Africa’s gold mining industry is not the subject of public outcries, parliamentary enquiries or even particularly of public comment.

Yet every year, less and less gold gets produced by an industry ravaged by increasing costs, lower ore grades, a hostile mining ministry whose priority is overwhelmingly focused on transformation rather than production and a largely disinterested public.

Mines are too rural, too much manned by foreigners, too out of the public eye for the public to care particularly – at least beyond the boundaries of the little settlement where they’re located. But yet, it’s at least arguable the industry is a kind of Zimbabwe-Lite: the crucial national resource subject to a gradual, land-grab encroachment by people suffering under misguided notions about the riches the industry supposedly offers and what is required to keep it going.

Despite constituting a smaller proportion of GDP than ever before, the SA mining industry still contributes about half of SA’s exports, mining companies constitute about a third of the value on the Johannesburg Stock Exchange, and the industry employs about half-a-million people.

Gold industry executives struggle manfully against this trend, trying desperately to keep in with a government whose first instinct is apparently to regard the industry as the pot of gold being stolen from the nation. The latest threat is the call for nationalisation, to which much of the gold industry might just respond: “Take it, brother, and good luck with that.”

Stats SA announced on Thursday that SA’s mining output plunged 15,9% in the year to September — the sharpest fall in 17 months. SA’s gold production fell 9,3% in volume terms compared with September last year.

The organisation does not specify or speculate on the reasons for the decrease, and the big question is what part of the complex matrix constituting gold production in South Africa is causing the problem. Is it production problems, over-taxation, poor labour practices, government interference or what? No one knows, but more importantly, no one seems really keen to seek an answer in any systematic way.

South Africa has been sliding down the hierarchy of producers for years, a fact which is slightly exacerbated by the large increase in the total amount of gold being mined around the world. In 1970, South Africa produced 68% of all gold mined that year. In the early 1980’s, South Africa was still producing more than half of the world’s supply. By the 1990s this dropped to 20%, and is now less than 10%.

Clearly, production problems have been and currently are a real problem for the SA industry. No-one doubts that the fact of gold mining in SA is that it’s deep, dark and dangerous.

The Chamber of Mines lists gold grades from 1910 to 2007, and these show a marked decline from their peak in the late 60s and 70s when grades between 11 and 13 grammes a tonne (g/t).

Grades have generally dropped below 5g/t since 1995. They have never been lower than they have in 2007 when they came in at 4.2g/t.

Mining depths in South Africa are also a huge challenge for gold miners. The Driefontein mine is now at 4,120m. At this level, the surface rock temperature is about 70degC and the mines spend millions on cooling systems.  Rock pressures are enormous, and the heating/cooling process makes them prone to what are described as “rock bursts”. It’s no wonder that consistently more than 100 people a year die in South Africa mines.

With increasing electricity costs, the average cash cost of mining for the gold industry is now over $500 an ounce for the first time ever.

Yet, however challenging these enormous problems are, they cannot be the whole story. Grades are low, but have been for a decade or more. They dropped below 5g/t 15 years ago when SA was mining three times more ore than it is now.  Mines are deep, but this too is not a new problem. Western Deep Levels reached a depth of 3,581 meters way back in 1977.

And the biggest incentive for the industry is that the gold price is now comfortably over $1000 an ounce. Even with costs now about half that, gold mining ought to be profitable business, even in South Africa.

It’s almost impossible to avoid the conclusion that the high and rising taxation rates, comparatively high wages for a basic industry, stringent BEE requirements and talk of nationalisation are all hindering the gold industry in South Africa.

Often what is not said is more important that what is. When was the last time you heard of a new gold mine being developed in South Africa?

The future will probably soon yield answers to all the questions we posed. But one thing is for sure: fewer and fewer people are betting their farms on SA gold production.

Harmony Gold shares dip on Q3 production announcement

Wednesday , 31 Mar 2010
The gold miner announced Wednesday that Q3 gold production would fall as a result of safety issues and shaft closures

FIRST COAL TO BE SUPPLIED BY Q2 2012

Exxaro signs deal with Eskom to supply coal to Medupi

Wednesday , 31 Mar 2010
The deal, which kicks off in 2012 will see the group supplying 14.6m tonnes of coal per annum

OUTPUT TO REACH 60,000 TONNES PER YEAR


CNMC to start developing the Muliashi copper mine this year
Wednesday , 31 Mar 2010
China Non-Ferrous Metals Corp said the project’s ore reserves are estimated to last between 15 and 25 years

LAUNCHED MONDAY

>Gold Fields arranging $500 million loan refinancing – bankers
Tuesday , 30 Mar 2010
Gold mining major, Gold Fields, is reported to be self-arranging a $500 million loan refinancing.

THE NEW AGE OF IRON ORE


SA’s iron ore wars in new twists
Tuesday , 30 Mar 2010
ArcelorMittal SA’s proposed “Sishen surcharge” on domestic steel triggers near-rage from government.

BEE IN FOCUS


A decade of South African broad-based BEE
Tuesday , 30 Mar 2010
A story of how three individuals made ZAR 3.5bn as if taking candy from kids.

One Response to “Zuma and Mandela Families Not paying Gold Miners, Services or Eskom, in Privately Owned Gold Mines”

  1. how to buy gold…

    […]Zuma and Mandela Families Not paying Gold Miners, Services or Eskom, in Privately Owned Gold Mines « Donnette E Davis ~ My Other Blog[…]…

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