Letmebe Frank & teevee;
Here's my reply to teevee's comment on SH:
teevee: Beg to differ with you! SUF (especially Dr.CJ) is extremely well
respected in S.A. And, the proposed mining legislation will prevent so-called
"heirs" to suddenly hijack for ransom the likes of SUF! I'd rather explore in
S.A. than on the "left coast" of Canada -- in B.C. Now you're talking about
socialism - at least in S.A. companies are allowed make a profit. Try that in
BC and see how many mines have shut down! Bottom line is S.A. NEEDS
foreign investment i.e. mining operations for providing jobs/empowerment JV-s
and taxes on profits!!!
Here's a primer on S.A. mining.... from mbendi... which makes a couple of
special references to SouthernEra!
South Africa: Mining Overview
South Africa is one of the world’s and Africa’s most important mining
countries in terms of the variety and quantity of minerals produced. It has
the world’s largest reserves of chrome, platinum, gold, manganese and
PGE’s. South Africa is the leading producer for nearly all of Africa's metals
and minerals production apart from diamonds (Botswana and the DRC),
uranium (Niger), cobalt (Zambia and the DRC) and phosphates (Morocco).
The country’s mineral industry can be broken down into five broad
categories – gold, PGM, Diamonds, Coal and Vanadium. Combined, these
produced a sales revenue of ZAR57.6 billion (approx. $ 9 billion), with
exports totaling ZAR48.5 billion (approx. $ 8billion). Mining contributes
8% to the countries GDP, and employs well over 500 000 people. Migrant
labour still plays an integral role in the South African mining industry, with
labour being sourced from Lesotho, Mozambique, Botswana and Zimbabwe.
However, due to poor commodity prices, recent restructuring and cost saving
exercises, several thousand workers have been retrenched, causing strain
between mine owners and workers unions, in particular the National Union of
Mineworkers (NUM), one of South Africa’s largest unions.
Minerals Legislation
The long awaited White Paper on Minerals and Mining Policy was released in
1998. The underlying objective of the White Paper was the proposed change in
ownership of mineral rights. Unlike most countries in the world, private
individuals own most of South Africa’s mineral rights (typically farmers and
large mining companies who have mineral right options).Currently, two thirds
of South Africa’s mineral rights are privately owned, with the remainder vested
in the State. This law has effectively prevented minerals development occuring
in the country via two processes:
* The owner of the mineral rights (usually farmers)refuses to allow access to
the property, as he owns these rights. Often farms are heavily sub divided,
thus
making it virtually impossible to locate the rightful owners. Southern Era’s
legal battle over the rights to the property on which the diamondiferous
Marsfontein pipe is located is a classic example.
1. A mining company has acquired mineral rights options from the mineral
rights owner (this involves payment of an annual fee, giving the mining
company first option on the mineral rights). Subsequently, these properties
have been kept and not developed for reasons such as increasing strategic
holdings in an
area or retaining a smaller exploitable mineral resource. The White Paper has
proposed a “use it or lose it”principal whereby mineral rights owners have to
prove to the government that the mineral rights are being investigated or
exploited. If not, then a third party could apply to the government to carry out
exploration on the property. However, the White Paper has yet to be ratified by
the government, and until legislation is passed, potential investors have to
negotiate with current mineral rights owners, who are beginning to manipulate
this situation to their economic advantage.South Africa is seen as one of
Africa’s more prospective countries to develop and continue mineral
exploration on the basis of its geological potential,established infrastructure
and economic growth.
Structure of the mining industry
The mining industry in South Africa has seen significant restructuring and
changes since the early 90’s with the traditional “big six” mining houses -
Anglo American / De Beers, Gencor / Billiton, Goldfields, JCI, Anglovaal and
Rand Mines - being restructured and extending their global presence. These
companies traditionally controlled gold, platinum, chrome, coal and base
metal production in South Africa. The advent of a new democratic constitution
and rising costs from gold mining activities resulted in several changes in the
industry.
The phasing out of the concept of mining houses has opened the door for
consulting engineers serving the mining industry to be involved in projects
which were previously the preserve of the mine owners themselves. The clear
trend now is to outsource much of the engineering function, which means that
mining houses no longer have to carry the overhead of permanent engineering
staff when they are not engaged in projects. There is also a move within
government towards accommodating small mining companies, creating
opportunities for junior operations to start up.
As the South African mining industry is still predominantly white controlled,
emphasis is being placed on stimulating black empowerment in the industry.
As a result, several black or union owned firms are now beginning to play an
important role in the industry. Not all have been successful so far. Anglo
American’s unbundling of JCI was seen as the first step in black
empowerment in the South African mining industry. However, this failed to
takeoff and as
a result, JCI has ended up a shell of its former self, composed of a few gold
property holdings and investments.
Recent movements in black empowerment include:
De Beers’ has sold of part of its Marsfontein diamond mine (60% owned,
Southern Era 40%)to a black consortium.
Ingwe and Amcoal (South Africa’s largest coal companies) have formed a new
coal venture “Newcoal”.
Amplats (the world’s largest platinum producer)forming an alliance with the
local Bafokeng tribe in the development of a new platinum mine.
Management of the state owned Alexcor diamond mine on the West Coast of
South
Africa has been sold to a consortium of black investors.
Tokyo Sexwale, a prominent black businessman, has shown considerable
interest in acquiring 10% of Northam platinum mine, as well as interests in
marine diamond mining off the West Coast of South Africa.
African Rainbow Minerals, a company formed in 1997 by Patrice Motsepe
acquisired several shafts from AngloGolds Vaal Reefs.
This process, coupled with the anticipated change in mineral rights legislation
in the country, should see South Africa developing its mineral resources to the
benefit of all South Africans.
The entry of foreign investment into South Africa has been slow since the
countrys first democratic elections in 1994. This has been due to a variety of
reasons including the minerals legislation, uncertainty over the economic
situation and the high crime rate.However, the situation is changing and many
junior exploration companies are now active in developing several small to
medium scale operations, mainly in diamonds, gold and platinum.
Canadian Southern Era has been the first success story with the opening of
the Klipspringer diamond mine as well as Australian Aquarius Platinum which
has opened a new platinum mine, Kroondal. South Africa’s fourth largest
foreign investment came from global gold mining company, Placer Dome,
which purchased 50% ($235 million) of the Western Areas Gold Mine, which
includes the South Deep project, estimated to be one of the world’s largest
known exploitable gold orebodies.The major mining houses are the principal
members of the Chamber of Mines of South Africa. Other Chamber of Mines
members included the majority of remaining gold and coal mines and a
number of producers of other mineral commodities. The Chamber of Mines
was responsible for a variety of advisory and service functions and represents
about 85% of the mining interests in South Africa.
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