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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (31354)	1/18/2009 7:16:43 PM
From: LoneClone	Read Replies (1) \| Respond to of 195975

Widespread job losses expected in SA mining industry miningweekly.com By: Esmarie Swanepoel Published on 16th January 2009 JOHANNESBURG (miningweekly.com) –Job losses were expected to be widespread in South Africa’s mining industry, as resources companies restructured their operations in view of weaker demand and lower resources prices, research consultancy Frost & Sullivan said on Friday. Metals and mining analyst Wonder Nyanjowa stated that South African mining companies would have to place greater emphasis on efficiencies and cost containment as the effects of the economic downturn continued to affect the commodities market. In December, a task team comprising government, labour and business representatives vowed that retrenchments would be seen as a ‘last resort’, and complied a report on how jobs could be saved in the industry. The task team highlighted internal company transfers and redeployment, temporary lay-offs, an extended break over the Christmas period and shorter working weeks, as alternatives to retrenchments. According to trade union Solidarity, a possible 9 000 workers could lose their jobs in the industry. Frost & Sullivan said it expected output, particularly gold production, to fall this year. Gold output was expected fall from the 240 t produced in 2008, to around 229 t this year, the research company stated. However, precious metals consultancy firm GFMS reported on Thursday, that South Africa’s gold output was expected to grow slightly in 2009, as new projects would be starting up. South Africa was the world’s biggest producer of gold for more than a century, but was overtaken in 2007 by China, and in 2008 by the US. Nyanjowa said that high-cost marginal operations would be dropped as mines looked to preserve cash and ensure profitability. “Lonmin has laid off 5 500 employees to trim its cost structures, while Anglo Platinum (Angloplat) has halved its capital expenditure and is monitoring production levels in the view of the demand for platinum. This is even though more than 60% of Angloplat production could be unprofitable at current levels.” However, Nyanjowa said that resources prices were likely to pick up at the tail end of the second quarter, once the global economic slow down started lifting, but not by the substantial margins that will spur increased production. The consultancy expected the gold price to continue rising slowly, and could possibly break the $1 000 an ounce level in the course of the year. This was in line with GFMS’ forecast on Thursday that gold prices could range between $750/oz and $1 080/oz in 2009. The commodity’s status as a safe haven has protected it from the significant falls in prices seen in other resources, Nyanjowa commented. The platinum price, however, was closely tied to the developments in the global automotive industry, which was the single largest source of demand for the precious metal. Nyanjowa said that the delay by the leading three US automakers in accessing bail out funds, the one-month long closure of automotive manufacturer Chrysler, and the declining new vehicle sales across Europe and America would continue to depress sentiment in the platinum industry. Nyanjowa noted that the collapse of platinum giant Impala Platinum’s bid for Mvelaphanda and Northam, coupled with the rejection of diversified group Xstrata’s $10-billion bid for Lonmin, indicated a temporary end to the mergers in this sector. However, he added that this appetite might return once commodity prices and demand for metals started climbing again.