Gold reached a record high of more than $2,000 an ounce on Tuesday, as investors, spooked by a weakening dollar, volatility triggered by coronavirus and ever rising U.S. cases, continue to look for a safe haven to move their money into.



<h2 class="wp-block-heading">KEY FACTS</h2>



<ul><li>Gold hit a high of $2,041.33 an ounce on Wednesday, after exceeding $2,000 for the first time on Tuesday.</li></ul>



<ul><li>The precious metal has gained more than 34% this year, making it one of 2020’s best-performing assets, Reuters&nbsp;<a rel="noreferrer noopener" href="https://uk.reuters.com/article/global-precious/precious-gold-cruises-to-new-high-above-2000-oz-idUKL8N2F7322" target="_blank">reports</a>.</li></ul>



<ul><li>Gold isn’t the only precious metal to have gained significantly, with the price of silver jumping to its highest level since 2013, and rising 50% overall this year.</li></ul>



<ul><li>The dollar weakened to two-year lows last week as lawmakers in Washington work to agree another stimulus deal.</li></ul>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



Governments and central banks across the world are unleashing stimulus packages worth some $20 trillion into the global economy, according to the Bank of America, in a bid to boost output after the pandemic continues to halt major industries and force people to stay home. U.S. lawmakers are currently working to secure a further package of economic relief, and investors are concerned that stimulus packages will trigger inflation and devalue other assets. Meanwhile, escalating tensions between the world’s two largest economies, the U.S. and China, is likely to keep pushing gold upwards.



<h2 class="wp-block-heading">WHAT TO WATCH FOR</h2>



Gold’s impressive rally could well continue, analysts predict, as the pandemic shows little sign of slowing down, allowing battered industries to reopen and letting global economies recover. More than 18 million people have been infected so far, while the death toll topped 700,000 this week.



By Isabel Togoh, Forbes Staff

Is The Golden Bubble About To Burst?

Here’s Why Gold Has Topped $2,000 For The First Time

The city of Johannesburg was established in 1886 after the discovery of gold. Gold is a mineral that has been deemed valuable for thousands of years. It does not rust and it is malleable. 



Gold has been used in jewelry as well as in the semiconductor industry to build electronic circuits. You can bury gold for hundreds of years and the worst it can get is accumulate dust. 



Because of its durability, gold has been used to store value in the form of money. In many countries, printed and minted money used to be linked to stored gold, which was reserved in the central bank. This way, central banks used to print as much money as they had gold reserves. There had been many attempts to move away from the gold standard beginning in the United Kingdom in the 1920s.



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However, the first successful move from the gold standard
was in the 1970s during the Nixon Administration in America. 



At this time, the United States (US) ran out of gold and
moved from the gold standard and floated the US dollar. Floated currency is
regulated by the laws of demand and supply and is closely linked to the
economic productivity of a country.



The idea of gold as the most important economic asset has
passed. Instead of entrepreneurs going to California to look for gold, as they
did in the past, they now go to Silicon Valley to create companies that exploit
the acquisition and sharing of data. 



Facebook is one such company that has connected the world
and expanded our friendships – although, in my opinion, it lowered the quality
of those friendships. 



<blockquote class="wp-block-quote">Facebook’s most valuable asset is not the software that connects people, which can easily be replicated, but the data of the over two billion active users it connects. </blockquote>



The most valuable asset of Uber, the ride-hailing service
that does not own a single taxi, is the data of the people who use it. The
prime asset of Google, the largest library, which owns no physical library, is
the index that takes customers to their desired websites. 



Therefore, the new valuable asset is not gold but it is
data. Data has become the new gold! With a population of 1.3 billion people and
a total purchasing power parity gross domestic product (GDP) of $6.74 trillion,
the population of Africa is growing at the rate of 2.6%. 



Much of Africa’s demographic is youthful. Much of this
population is increasingly connected to the internet. 



In 2017, Facebook had 170 million subscribers, which constitutes approximately 15% of the total population of Africa and this subscription is growing. Companies such as Google reportedly give accounts in exchange of subscriber data. These companies have been reported to have sold this data to entities such as advertisers, political parties etc. The exchange of personal data for an account is unfair trade because the value of personal data is far greater than the value of an account.  



READ MORE | <a rel="noreferrer noopener" aria-label="Big Data And Smart Farmers For Africa’s Agricultural Transformation (opens in a new tab)" href="https://www.forbesafrica.com/focus/2018/10/30/big-data-and-smart-farmers-for-africas-agricultural-transformation/" target="_blank">Big Data And Smart Farmers For Africa’s Agricultural Transformation</a>



What do we do to commercialize the vast African database? 



Firstly, we need to develop technological capacity to
gather, process and monetize the African database. To achieve these, we ought
to improve and expand our educational institutions, paying attention to the
development of programs in data science. We need to embed data science subjects
such as data analytics and software engineering into primary, secondary and
tertiary education. 



Governments and the African Union ought to expand projects
such as the Deep Learning Indaba as well as the African Institute of
Mathematical Sciences that are developing mathematics, machine learning and
artificial intelligence expertise in Africa. 



To gather data, we need to politically organize ourselves to
create economies of scale. Regionally, organizations such as the Southern
African Development Community (SADC) and Economic Community of West African
States (ECOWAS) should create regional data banks that collect, protect and
store regional data.



&nbsp;Continentally, the
African Union should coordinate data gathering and develop data protection
policies. We need to create laws and policies that regulate data nationally,
regionally and continentally. 



– Tshilidzi Marwala is a professor and Vice-Chancellor and Principal of the University of Johannesburg. He deputizes President Cyril Ramaphosa on the South African Presidential Commission on the Fourth Industrial Revolution.

gettyimages-1058381926-170667a

Data Is The New Gold

The periodic table of chemical elements&nbsp;<a href="https://www.iypt2019.org/">turns 150</a>&nbsp;this year. The anniversary is a chance to shine a light on particular elements – some of which seem ubiquitous but which ordinary people beyond the world of chemistry probably don’t know much about.



One of these is gold, which was the subject of my postgraduate degrees in chemistry, and which I have&nbsp;<a href="https://www.researchgate.net/profile/Werner_Van_Zyl">been studying</a>&nbsp;for almost 30 years. In chemistry, gold can be considered a late starter when compared to most other metals. It was always considered to be chemically “inert” – but in recent decades it has flourished and a variety of interesting applications have emerged.



<h4 class="wp-block-heading">A long, curious history</h4>



Gold takes its name from the Latin word aurum (“yellow”). It’s an element with a long but rather mysterious history. For instance, it’s one of 12 confirmed elements on the periodic table whose discoverer&nbsp;<a href="http://www.rsc.org/periodic-table/element/79/gold">is unknown</a>. The others are carbon, sulfur, copper, silver, iron, tin, antimony, mercury, lead, zinc and bismuth.



Though we’re not sure who discovered it, there’s evidence to suggest it was known to the ancient Egyptians as far back as <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="http://raregoldnuggets.com/?p=6724" target="_blank">3000 BC</a>. Historically, its primary use was for jewellery; this is still the case <a href="https://www.sbcgold.com/blog/top-6-common-uses-for-gold/">tod</a><a rel="noreferrer noopener" aria-label="a (opens in a new tab)" href="https://www.sbcgold.com/blog/top-6-common-uses-for-gold/" target="_blank">a</a><a href="https://www.sbcgold.com/blog/top-6-common-uses-for-gold/">y</a>, it’s also used in mint coins. Gold is also found in ancient and modern art: it’s used to prepare ruby or purple pigment, or as gold leaf.



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South Africa was once the top&nbsp;<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.forbes.com/sites/greatspeculations/2018/06/13/top-10-gold-producing-countries/#7580dae84a87" target="_blank">gold-producing country</a>&nbsp;by far: it mined over 1,000 tonnes in 1970 alone. Its annual output has steadily fallen since then – the top three gold producing countries&nbsp;<a href="https://www.forbes.com/sites/greatspeculations/2018/06/13/top-10-gold-producing-countries/#7580dae84a87" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">in 2017</a>&nbsp;were China, Australia and Russia, with a&nbsp;combined&nbsp;output of almost 1000 tonnes. South Africa has dropped to 8th position, even surpassed by Peru and Indonesia.



But gold’s uses and its chemical properties extend into many other areas beyond jewels and minted coins. From pharmaceutical research to nanotechnology, this ancient element is being used to drive new technologies that are pushing the world into the future.



<h2 class="wp-block-heading">Why and how it’s useful</h2>



Of the 118 confirmed elements in the periodic table, nine are naturally occurring elements with radioactive&nbsp;<a href="http://www.world-nuclear.org/information-library/non-power-nuclear-applications/radioisotopes-research/radioisotopes-in-medicine.aspx" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">isotopes</a>&nbsp;that are used in so-called nuclear medicine. Gold is not radioactive, but is nevertheless very useful in medicine in the form of gold-containing drugs.



There are two classes of gold drugs used to treat rheumatoid arthritis. One is injectable gold thiolates – molecules with a sulfur atom at one end, and a chemical chain of virtually any description attached to them – found in drugs such as Myocrisin, Solganol and Allocrysin. The other is an oral complex called Auranofin.



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Gold is also increasingly being used in&nbsp;nanotechnology. A nanomaterial is generally considered a material where any of its three dimensions is 100 nanometres (nm) or less. Nanotechnology is useful because it is not restricted to a particular material – any material could in principle be made into a nanomaterial – but rather a particular property: the property of size.



For example, gold in its bulk form has a distinct yellow colour. But as it is broken up into very small pieces it starts to change colour, through a range of red and purple, depending on the relative size of the gold nanoparticles. Such nanoparticles could be used in a variety of applications, for example in the&nbsp;biomedical&nbsp;or&nbsp;optical-electronic&nbsp;fields.



Another exciting advancement for gold in nanotechnology was the discovery in 1983 that a clean gold surface dipped into a solution containing a thiolate could form&nbsp;self-assembled monolayers. These monolayers modify the surface of gold in very innovative ways. Research into surface modification is important because the surface of anything can show very different properties than the bulk (that is, the inside) of the same material.



<h4 class="wp-block-heading">More to come</h4>



Gold nanoparticles have also proven to be an effective catalyst. A catalyst is a material that increases the rate of a chemical reaction and so reduces the amount of energy required without itself undergoing any permanent chemical change. This is important because catalysis lies at the heart of many&nbsp;manufactured goods&nbsp;we use today. For example, a catalyst turns propylene into propylene oxide, which is the first step in making antifreeze.



Two discoveries in the 1980s made scientists look at gold catalysis differently. Masatake Haruta, in Osaka, Japan, made mixed oxides containing gold – and discovered the material was remarkably active to catalyse the oxidation of toxic carbon monoxide into carbon dioxide. Today, this catalyst is found in vehicle exhausts.



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At the same time&nbsp;Graham Hutchings, who was working in industry in Johannesburg, South Africa,&nbsp;discovered a gold catalyst&nbsp;that would work best for acetylene hydrochlorination. This process is central to PVC plastic, which is used in virtually all plumbing production. Until then, the industrial catalyst for this process was using environmentally unfriendly mercuric chloride material.



<h4 class="wp-block-heading">Many applications</h4>



In my opinion, gold has many more uses that haven’t yet been discovered. There is much more to come in the world of&nbsp;<a href="https://pubs.acs.org/doi/10.1021/ed400782p">gold research</a>.



There will, in the next few years, be new developments in how the element is used in, amongst others, medicine, nanotechnology and catalysis. It will also find new applications in relativistic quantum chemistry (combining relativistic mechanics with quantum chemistry), surface science (the physics and chemistry of surfaces and how they interact), luminescence and&nbsp;photophysics&nbsp;– and more.



&#8211;Werner van Zyl; Associate Professor of Chemistry, Lecturer in sustainable biomass, energy and water systems, University of KwaZulu-Natal



&#8211;The Conversation

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From Medicine To Nanotechnology: How Gold Quietly Shapes Our World

Jitters over global growth and a possible pause to U.S. monetary tightening are expected to set gold prices up for gains in 2019, a Reuters poll showed on Tuesday, but the metal will struggle to break above recent highs. 



The survey of 36 analysts and traders returned a median forecast for gold to average $1,305 an ounce in 2019, up around 3 percent from last year’s average and a touch higher than forecast in a similar poll three months ago.



It predicted prices would average $1,350 in 2020 &#8211; just below peaks of $1,374.91 in 2016 and $1,366.07 last year. 



In 2018, gold saw its first annual decline in three years, with surging stock markets and higher U.S. interest rates offering investors better returns elsewhere, while a stronger U.S. dollar made gold more expensive for non-U.S. buyers.



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But the metal has managed a firmer trajectory so far this year, reaching seven-month highs and hovering around the important technical level of $1,300.



“A slowdown in Fed interest (rate) hikes, possibly a weaker or at least not strengthening U.S. dollar, further U.S. stock corrections and ongoing geopolitical instability are building the perfect storm (in favor of gold),” Frederic Panizzutti at MKS said.



Flagging growth in China and elsewhere and a U.S.-China trade dispute have knocked world stock markets from last year’s record highs and raised fears of a broader global slowdown &#8211; reviving interest in gold as a safe store of value.



Economists, meanwhile, say the U.S. Federal Reserve will slow the pace of rate rises, and currency strategists polled by Reuters believe a dollar rally is largely over.



Adding to the bullish mood, gold-backed exchange-traded funds have added around 4 million ounces, or 7.6 percent, to their holdings of the metal since early October.



Speculators had also turned positive, with bets on higher prices on the Comex exchange overtaking bets on price falls by mid-December, after which data has been unavailable due to a partial U.S. government shutdown. [CFTC/]



“We see gold in a longer-term recovery. The first phase, driven by normalizing sentiment in the futures market, seems to be completed and a short-term consolidation looks likely,” said Julius Baer analyst Carsten Menke.



“The second phase, characterized by a weakening U.S. dollar, should start around the middle of this year, followed by a third phase of returning safe-haven demand once growth and inflation concerns creep into financial markets early next decade,” he said.



Gold is often held as protection against inflation, which erodes the value of other assets.



For silver, poll respondents forecast an average price of $16 an ounce this year, up from last year’s average of $15.68 but less than the $16.40 they predicted three months ago. It marked the fourth consecutive poll in which the 2019 silver price forecast had been downgraded.



They said prices would average $17.20 next year.



That would push the closely watched gold/silver ratio down from 2-1/2-decade highs reached last year.



Silver is used in electronics as well as for investment, and the worsening global economic outlook has weighed on prices. It also tends to follow the direction of gold, and its price swings are often more extreme than those of bullion.



“We are cautiously bullish on silver prices, given a fundamentally sound demand-and-supply physical market,” Societe Generale analyst Robin Bhar said.



“Silver is undervalued relative to gold and some catch-up is likely,” he said. -Reuters



-Arpan Varghese and Arijit Bose, Peter Hobson and Sethuraman N.R.

gettyimages-912908806-594×594

Gold Back on Upward Path As Global Growth Slows

Gold climbed to a seven-month high on Tuesday as markets opted for caution before three major macro events and a blizzard of big tech company earnings in the coming days, starting with Apple later. 



Despite the upcoming action &#8211; a key Brexit vote in the UK , Wednesday’s U.S. Federal Reserve decision and Thursday’s conclusion of the latest Sino-U.S. trade talks &#8211; European and Asian stocks held up relatively well.



London’s FTSE rose 1 percent and Frankfurt and Paris both made some ground. Utilities and other safety plays benefited from a series of U.S. profit alerts, including from digger maker Caterpillar, overnight.



News that the U.S had leveled charges against China’s telecom giant Huawei days before the next round of trade talks between Washington and Beijing knocked sentiment.



But it was offset by promises of more economic stimulus from China, which had berated Washington on Monday for blocking the appointment of judges for its World Trade Organisation appeal against U.S. tariffs.



Amid the turmoil, gold broke through $1,300 an ounce to reach its highest since mid June.



“Investors are very cautious with many uncertainties on U.S.-China trade talks and Brexit. Huawei is at the center of dispute, creating very noisy background for the trade talks,” said Margaret Yang, a market analyst at CMC Markets.



“All these are making it more difficult for investors to judge the market’s direction. Money is fleeing into assets such as gold, seeking safety.” ,”



The U.S.-Sino moves, as well as bets that the U.S. Fed will sound more cautious on Wednesday, kept the dollar near a two-week low and heightened the safe-haven appeal of the Japanese yen and the Swiss franc.



Sterling held at $1.3166 and 86.88 pence to the euro before crucial votes later in the day aimed at breaking a deadlock in the UK parliament over Brexit .



The pound has rallied 6 percent from Jan. 4 lows, but further gains may be limited unless lawmakers emerge with a big majority on the votes.



Most European government bond yields were little changed. Weaker economic data and unknowns like the trade feuds and Brexit have all boosted expectations that interest rates will stay low.



New debt deals from Greece, Belgium and Austria were also in the pipeline. The slide in rates has also encouraged governments to launch new bond deals. Even Angola, which has just taken IMF aid, said it was eyeing a bond sale.



In Asia, shares were mixed, with losses for Australia and New Zealand, with their benchmark indices down 0.5 percent and 1.2 percent respectively. Japanese and Chinese stocks both recovered from early wobbles to finish in the green.



<h4 class="wp-block-heading">WARNING BELLS</h4>



Markets will have more catalysts this week with over 100 of the S&amp;P500 companies reporting results, including Amazon, Apple and Facebook.



Overnight on Wall Street, the Dow and S&amp;P 500 each closed down 0.8 percent and the Nasdaq was off more than 1 percent.



The losses came after Caterpillar and Nvidia Corp joined a growing list of companies cautioning about the crippling effects of softening Chinese demand.



World markets slip on China worries; dollar steady ahead of trade talks



“Both companies are seen as industry bellwethers, and their disappointing results provide further evidence that this time China’s slowdown is for real,” said Rodrigo Catril, Sydney-based strategist at National Australia Bank.



Worryingly, earnings at China’s industrial firms too shrank in December, pointing to more troubles for the country’s vast manufacturing sector, which are already struggling with a decline in orders, job layoffs and factory closures.



Oil recovered after overnight losses. U.S. crude was last up 35 cents at $52.34 a barrel; Brent gained 37 cents to $60.30.



Washington imposed sanctions on Venezuelan state-owned oil company PDVSA on Monday, a step that is likely to curb its crude exports to the U.S. and ratchet up the pressure on President Nicolas Maduro. -Reuters



-Marc Jones

Gold Bar Casting At Valcambi SA Precious Metals Refinery

Gold Reaches Seven-month High as Stocks, Dollar Struggle

African Gold Refinery, a Ugandan company, expects to process $1 billion worth of gold a year but is battling would-be smugglers turning to the precious metal to make easy money.
Gold is lucrative in this part of the world. Gold shipments by East Africa’s third largest economy surged to $204 million in the 2015/16 financial year, from $230,000 a year earlier, according to the Bank of Uganda.
“For the first time the country registered an increase in exports just on account of that one unit,” said Richard Kaijuka, Chairman of African Gold Refinery, in April in the capital Kampala. “It’s certainly a game-changer for the region. The outlook is looking good – without doubt.”
“The beauty about it is if this smuggling can stop, we are able to export. This unit alone can process $1 billion per annum,” Kaijuka said.
<div id="attachment_32840" style="width: 483px" class="wp-caption alignleft"><img aria-describedby="caption-attachment-32840" decoding="async" loading="lazy" class=" wp-image-32840" src="http://www.forbesafrica.com/wp-content/uploads/2017/07/DSC_0054-copy-300x199.jpg" alt="" width="473" height="314" />An Africa Gold Refinery employee prepares to melt gold (Photo by Joseph Burite)</div>
While a 2014 government geological survey revealed significant mineral deposits, including gold, iron ore and uranium, Uganda has no commercial gold mining operations in place. The country relies on artisanal laborers who sell raw minerals to unregulated middlemen. About 24 firms currently possess gold prospecting licenses, none of which has a mining lease, according to a ministry of energy and mining cadaster.
Since launching operations in 2014, African Gold Refinery has seen significant flow of gold from neighboring countries, according to Kaijuka.
“Dubai has over 14 refineries and they don’t produce anything. Ours is to create a ‘mini-Dubai’ in this region. We have even got gold from West Africa, from the Democratic Republic of Congo, from Tanzania,” he said.
The formal launch of the refinery in February heightened concerns conflict minerals would find their way to the market, fueling volatility in the Great Lakes Region.
“Our fear was that having a plant in Uganda with all these minerals and our porous borders, where people cross and conduct a lot of smuggling in and out of the country, and sometimes we don’t know how much we have in the country and how much is going out. How much is coming in because of this smuggling? Our fear was that maybe some of it would fuel conflicts,” says Peter Wandera, the Executive Director of Transparency International Uganda.
“Government should begin listening to the stakeholders. Let the government be more transparent because issues of extractives have a lot of secrets around them. It should be more open to external views,” he says.
“The refinery is to add value to our exports,” says Irene Muloni, Uganda’s Cabinet Minister for Energy and Minerals. “We have even removed royalties so that people can export through the legal channels.”
<div id="attachment_32843" style="width: 465px" class="wp-caption alignleft"><img aria-describedby="caption-attachment-32843" decoding="async" loading="lazy" class=" wp-image-32843" src="http://www.forbesafrica.com/wp-content/uploads/2017/07/DSC_0110-copy-300x199.jpg" alt="" width="455" height="302" />A receiving desk for gold (Photo by Joseph Burite)</div>
Muloni shied away from giving export targets for the current financial year.
Kaijuka, who is also the Vice Chairman of the not-for-profit, non-governmental Uganda Chamber of Mines and Petroleum (UCMP), says African Gold Refineries is based on responsible sourcing of its gold that it refines operating by the Organisation for Economic Co-operation and Development (OECD) guidelines.
“By going for responsible sourcing, it means we are eliminating those that are illegal. That’s the whole point,” he said. &#8211; Written by Joseph Burite

Smugglers Take Sheen From Uganda’s Bright Gold Refinery

Sure, optimism shone forth in Cape Town like the late summer sun bouncing off Table Mountain, as more than 6,000 powerful people, including more than 20 government ministers, headed for the biggest mining gathering on the planet.
<img decoding="async" loading="lazy" class="alignleft size-medium wp-image-4586" src="/wp-content/uploads/2017/04/Chris-Bishop_JC-200x300.jpg" alt="" width="200" height="300" />
There were more mining companies this year, up 50% on last year, after more than five years of decline. The keen-eyed investors were back and looking for contenders across the continent. A fruitful place to be for the brave, like the motorbike riding maverick Mark Bristow who has spent the last 20 years making money digging gold in mines from Mali to Cote D’Ivoire. Two decades ago many fellow South Africans may have laughed at Bristow for taking risks far from home, in what many see as barren land for mining, but now they’re laughing on the other side of their faces. At the Mining Indaba, Bristow’s Randgold Resources announced it had increased gold production, for the fifth year in a row, plus it was debt free with more than $500 million in cash. Many mining companies would kill to be in that position.
Among the investors looking to blaze a trail across Africa is the Lagos-based African Finance Corporation that began life, in 2007, with a fund of $1.1 billion and now has assets of $3 billion, according to one of its directors, Osam Iyahen. It is a public-private fund, 42% owned by government, that invests in: oil; gas; resources; infrastructure and power. In January, it broke ground on a $200-million bauxite mine in the Boffa region of Guinea Conakry, just 15 kilometers from the coast, with plans to ramp up to 15 million tons.
“I think there has been a rebound in the industry this year,” says Iyahen in Cape Town.
“Last year was a bit of a disaster. People were not interested in talking about transactions; all they were worried about was protecting their downside. There was a lot of sulking going on.”
You could be forgiven for thinking the host nation is still sulking. South Africa, the biggest mining country on the continent, has been like a boxer on the ropes since the power cuts and global financial collapse of 2008. More than 60,000 jobs have been lost since 2012; capital expenditure ground to a halt and the South African industry lost R38 billion (about $2.8 billion) in 2016 alone, in a year when mining output fell 4.8%.
“We have to get our house in order in South Africa, capital is a coward and it goes to the place where there is least risk. We have to remember mining is a global game now and it is easier than ever for foreign investors to move capital around. Our grandchildren will live with the legacy of what we do now,” says Kieran Whyte, a lawyer and partner at Baker McKenzie, who specializes in energy and infrastructure.
The last few months of 2016 were better as commodity prices lifted, according to the Chamber of Mines, especially the risk haven of gold in the wake of the unpredictable, to put it kindly, presidency of Donald Trump.
“I think we are seeing the green shoots here, we just have to watch out for frostbite,” says Roger Baxter, the CEO of the Chamber of Mines, with a smile on the first day.
Baxter was alluding to two cold fronts: the first, the fact that South Africa – that mined more than a third of the world’s gold – is no longer the king of mining. In fact, in these troubled economic times, more and more nations, from West Africa to South America, are ready to accept foreign investors with open arms. A sign of the times is that, on the eve of the Mining Indaba, analysts in Cape Town were extolling the virtues of the copper, gold and coal mining nation of Chile.
The second frosty front is regulatory uncertainty. The South African government, which has met six times with the Chamber of Mines, has been working on amendments to its mining law since December 27, 2012. It promises to gazette the amended Mineral and Petroleum Resources Development Act (MPRDA) by the end of March; the Chamber of Mines feels it could be April.
<div id="attachment_4588" style="width: 310px" class="wp-caption alignleft"><img aria-describedby="caption-attachment-4588" decoding="async" loading="lazy" class="size-medium wp-image-4588" src="/wp-content/uploads/2017/04/Mark-Bristow_JC-300x200.jpg" alt="" width="300" height="200" />Mark Bristow</div>
What is likely to be in the bill could cause conflict. It is expected there will be greater ministerial discretion and set in stone that all mining companies have to have 26% black ownership at all times. One of the problems is black shareholders, once they have passed their lock-in date, often cash in their stakes by selling to white shareholders, thus diluting the empowerment stake.
The Chamber of Mines, which represents almost all South African mining houses, disagrees strongly with this. It feels that once mining companies have borne the cost of financing black shareholdings it has done its job regardless of dilution. If this so-called “once empowered, always empowered” principle is accepted, many of the country’s biggest mining houses will be compliant overnight.
“I have never seen the Chamber of Mines so aggressive. Normally they get along to go along, but it seems the worm has turned,” says one mining insider in Cape Town.
It is all likely to end up in court where mining lawyer Peter Leon reckons they have a strong case.
“All they have to do is challenge section 100 of the MPRDA. This gives the minister the power to promulgate the act, but doesn&#8217;t give the minister the right to rewrite or amend the act. That would blow it out of the water,” says Leon.
There appears to be little sign of a U-turn by the government over an issue that could further confuse and deter investors.
“We don&#8217;t want to encourage a place where courts take the place of government. We don&#8217;t agree with the norm that if you don&#8217;t agree with us you take it to court,” says South African mining minister Mosebenzi Zwane.
It’s a cold front that could mean a Chile future.

Beware, It’s Chile Out There

They call them zama zamas which means ‘those who try their luck’. Wearing his traditional Zulu earrings, looking hirsute with whiskers on his face, this is Dumisani Ngcamu, otherwise known as Ntshebe – ‘the bearded man’. He is an illegal miner and has been risking his life for eight years trying to scrape a handful of gold dust underground to support his eight kids. He works in abandoned mineshafts around Johannesburg, a city in South Africa built on gold.
“You see, here in Johannesburg, gold is everywhere but people don’t know that. Sometimes you don’t have to go deep, it’s closer than you think,” says Ngcamu.
A trip to Johannesburg from his village Nquthu, in the KwaZulu-Natal province, looking for greener pastures, led Ngcamu to illegal mining even though he never worked in a mine. Immigrants from neighboring Zimbabwe, the war-torn Democratic Republic of the Congo and Mozambique introduced Ngcamu to this industry as a marketer of syndicates.
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“I was earning R30 ($2.20) a day, I did not mind how small it was because I had food on my plate. I knew this was a serious job when I got arrested, but luckily for me I had learned every process of mining. I knew where to find gold,” says Ngcamu.
After he was released he went on his own and started mining in built-up areas.
“I mined within near distances, I reached barriers where you would find houses and firms, I then realized I could make more money in abandoned mines. That’s when I started working with other people,” says Ngcamu.
It all revolves around a shanty town called Denver, near Johannesburg, where most of the residents are from the KwaZulu-Natal. Here, shacks and shady corners are full of idle youth who drink to drown their sorrows and clusters of people playing chess and cooking meat. The majority of people in this area are the poorest of the poor and try to make a living through illegal mining and crime.
“Whenever government officials wanted a gunman, they knew Denver was the perfect place. R5,000 ($370) was enough for criminals here, but today you won’t find a single criminal because everyone is involved in mining,” says Ngcamu.
“You would hear that a policeman has been shot at Denver hostel on a daily basis, no police officer would enter this place back in those days, but today we are able to communicate with them.”
The troubles on the surface match the problems underground. There’s fighting between factions and theft among rival groups of illegal miners.
“They used to rob our stuff. When you’re down there you need to act like an animal. Things I encounter down there are devastating. I saw someone being hit with a hammer on the head; if you are a handsome young man, without a beard like mine [laughs], they would rape you and kill you. I was lucky not to get caught. Shootings and a person being lost is common in there.”
Ngcamu survived a horror encounter with a rival faction.
“You even have slaves. They catch you, tie you up like you a goat, hold you hostage and make you work for days. Your job would be to work and you deliver the gold dust up until the exit point. If you say you tired, they kill you, and luckily I managed to escape,” he says, while chuckling.
He says foreigners are most prone to such torture.
“When I look at this country, foreigners are not seen as humans, they are seen as animals. Those [foreigners] who I mined with were mostly victims of such things. If it is a group of mixed nationals, then things will get sour.”
Such experiences led Ngcamu to appoint people to act as security guards who would look out for them while they dig. He knew where to find them.
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“You know who is a criminal in your area so we appointed criminals from Denver. We told them the money they will make with us is better than what they would make from crime.”
“Now we are free, because we know people are looking out for us. Everyone is benefiting. Police are happy because there is no crime,” he says.
Illegal miners even pay the guards with a plate of gold dust after they have returned. As it is a community business, women and children are also involved. Women are mostly employed in the manufacturing of the gold. They are tasked to use a piece of equipment called a phenduka – a hand driven cylinder.
Iron balls and water are added inside the perforated phenduka stand. After spinning, the water is sifted into plastic buckets until liquid mercury is visible when being strained. The end process is burning the liquid mercury until it becomes solid gold, then it goes to the market.
David van Wyk, a mining analyst who has studied illegal miners for decades as a researcher for the Bench Marks Foundation, knows the lives, challenges and syndicates of zama zamas. You’d be forgiven if you mistook him for Albert Einstein with his vast knowledge.
“In Africa, before colonialism, people did small-scale mining. Traditional African mining was small scale artisanal mining all over Africa. You still find it in Burkina Faso, it also happened around Great Zimbabwe. If we want a situation that is not so disorderly, that is no so violent and unsafe, we need to pass regulations for small-scale mining and allow it to take place,” he says.
According to Van Wyk, small-scale mining started 200 years ago, before big companies started operating, but it is seen as a threat to the weakening South African mining industry.
“As we have a downward curve in the availability of gold mining, we have an upward curve in small-scale mining.”
“Economically their costs are very low, they do not use a lot of water they do not use a lot of electricity, they don’t use a lot of technology,” says Van Wyk.
He believes the reason there is factional fighting is because of the syndicates the zama zamas work for. Syndicates struck a deal with the zama zamas to buy gold from them; they then sell the gold to the formal economy. They provide zama zamas with food and water and make deductions when workers, like Ngcamu, return from digging. Van Wyk, though, says some of the syndicates are against illegal mining.
“My allegation against the Chamber of Mines, who are always making a noise about zama zamas, is that their people are involved. My second problem with the Chamber of Mines is that they represent monopoly mining, that’s why they are very much against zama zamas.”
“In South Africa, if you are black and you shoot an animal, you are a poacher, but if you are white and shoot an animal you are a trophy hunter; same applies to mining.”
The Chamber of Mines of South Africa refutes the claims.
“It is simply a mischievous claim. As is the case in most countries around the world, mineral resources in South Africa belong to the state and may only be mined by licensed operators. It doesn’t matter whether it is small-scale, medium-scale or large-scale mining, the point is, it needs to be regulated,” says Charmane Russell, spokesperson of the Chamber of Mines.
“If we formalize zama zamas and actually create laws and regulations and organize them into cooperatives, then there can be training in mine health and safety for these guys,” says Van Wyk.
Mines Rescue Services has been rescuing trapped illegal miners for the past 92 years.
“The challenges we face is that there are no maps, no mine plans. We do not know where to go. We work in extremely dangerous conditions. That’s why we have to work with illegal miners to guide us to a place where these guys are trapped,” says Christo de Klerk, CEO of Mines Rescue Services.
De Klerk and his crew use specialized equipment to roam underground and search for illegal miners. He believes the conditions illegal miners face is inhumane.
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“If you look at the amount of the bodies we have recovered, a lot of those bodies were killed during the faction fighting; these people are armed and very dangerous.”
“Authorities have to get together to stop them, we have to stop the inflow of illegal immigrants, we have to try and close all these holes, the prosecution of these people is important but the main thing is that the syndicates who buy gold and sell the gold must be infiltrated and stopped,” says De Klerk.
Ngcamu disagrees.
“Government needs to rethink things; they shouldn’t listen to those who say shafts should be closed because it is risky. We know it is risky; they should stop acting act like they are in sympathy with our lives when they just want to prevent us from getting small fortunes. We’re hungry, they should let us eat,” says an irate Ngcamu.
Not far from Denver, Ngcamu takes us to a place where they first started mining. It seemed like a long day at work for the security guards who were looking out for the illegal miners. Not far away is a metals factory. Pointing towards it, Ngcamu has a story to tell.
“You see when they started operating here, they would call the police on a daily basis to come and arrest us for mining next to their company. Luckily for us, the officers were black, they were our brothers, and they understood us. Criminals used to steal their metals, but now it has all stopped. They do their business we do ours, it’s just a mutual agreement,” he says.
After some explanation and pleading, one of the security guards who didn’t want to be identified agrees to speak and sugarcoats how they deal with criminals.
“We tell them what they’re doing is not right and should never repeat it. A lot of people know what gold looks like so they would be taking chances to undermine us,” he chuckles.
“You see, if government closes these mines that would mean he has killed all of these guards and their families. That would make government responsible for deaths of these people,” says Ngcamu.
The whole country was in shock as scores of miners were rescued in an abandoned mine in Langlaagte, on the outskirts of Johannesburg. Four dead bodies were recovered in a day that proved to be the last throw of the dice for illegal mining, events there brought about a lot of public debate on how to stop it.
“What happened in Laanglagte doesn’t deter me; whenever you enter a certain job you will face challenges. Even in firms, you can die reading a newspaper; you can die even though you occupy a top position. So what happened to our brothers won’t make us cry, to our brothers’ families we send our condolences but we expect anything down there. When we go down we pray, when we return we pray,” says an unapologetic Ngcamu.
The mine in Laanglagte is abandoned by Central Rand Gold, leaving opportunities for Ngcamu and his crew to make a living. Van Wyk believes Central Rand Gold, listed on the in the London Stock Exchange, should never have received a mining licence in the first place. The mineshaft is situated at George Harrison Park which has been a national monument since 1946. Next to the park is the 99-year-old school, TC Esterhuysen Primary School, with its football pitch 10 meters from the mine pit.
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“The mine did not have water, so they used the school’s water, which is illegal as well. When we talk about illegal mining, we always blame zama zamas, but people don’t know how many big monopoly mining operations, listed on the London Stock Exchange, that are operating illegally and flaunting the laws of this country,” says Van Wyk.
Ngcamu says nothing will stop them from mining.
“If I stop, what will I say to my two kids at university? People need to be fed, for me stopping is not an option.”

They Dig, They Die

That Australian,” Sibongile Kenneth Sonjica muses, “is killing us with money. He is turning us into dogs. Two dogs can play together nicely, but throw a bone between them and they will fight.”
The 58-year-old Sonjica is a 15-year veteran of Gauteng’s gold mining industry and returned to his Mpondoland birthplace, in the Eastern Cape, after his 1997 retrenchment. His only fond memories of those times are of him in the ring – he was a useful boxer in mine hostel tournaments.
“That Australian” is Mark Caruso, a Perth-based venture capitalist and Executive Chairman of Mineral Commodities (MRC), who is going toe-to-toe with a community opposing a proposed 22-kilometer long and 1.5-kilometer wide strip mine of coastal dune titanium deposits within its midst.
“The mine will destroy the land forever; I know this from working on mines. It will not be possible for the cows to graze, there will be soil erosion and you cannot live close to a mine. I know mines,” says Sonjica.
There is no middle ground between the pro and anti-mining lobbies, this fight is all about the last man standing; there will be no split decision. Titanium is tough, lightweight and has the highest strength-to-weight ratio of any metal. It provides for the demands of the 21st century’s new technologies from the medical and sporting fields through to the aeronautic industries.
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Facing off is the Amadiba community who live on communal land with collective agency. It is a land tenure system that has survived such interlopers as Shaka Zulu, British colonialism (Mpondoland was the last territory to be annexed by the British in 1894) and patronizing apartheid-era rural improvement projects that became a catalyst for the Pondo Revolt in the late 1950s.
South African Pulp and Paper Industries (Sappi) misjudged the land arrangement in 1999 when it began to implement a tree planting project by paying some residents a cultivation rental fee. In what became known as the Gum Tree Rebellion, 14 homesteads of those participating in the initiative were razed in two weeks of violence. The community saw neither development value nor any synergy with the multinational’s land use.
Nonhle Mbuthuma, the 38-year-old spokesperson for the Amadiba Crisis Committee (ACC) that opposes the mine, went into hiding following the March 22 killing of the organization’s chairperson Sikhosiphi “Bazooka” Rhadebe.
“My grandfather was a leader during the Pondo Revolt. What I learned from him is that it is very important that if you want to live a better life, you have to protect the land,” says Mbuthuma.
The ACC wants economic development through an eco-tourism model on the economic ethos of a rising tide lifts all boats, allowing for both small-scale farming and the amaMpondo culture to flourish. The Pondoland Centre of Endemism, which will be impacted by any mine operations, is recognized as one of the world’s 235 richest eco-regions.
“People think we are poor. We do not feel we are poor. We feel richer than other people. Here we have land. You can go to other places and people have nothing. We have crops and cattle and bigger plans for tourism. In cities, people are poor. Caruso says we are poor, but he is from the city,” says Siyabonga Ndovela, a 23-year-old supporter of the ACC.
The ACC says the promise of 600 mining jobs will come at the expense of creating a strip of desert stretching between the Mzamba and Mtentu rivers, pollute the marine environment, as well as arable and grazing land far beyond its area of operation, exhaust and choke fresh water sources, displace communities and serve as nothing more than a burial mound for a community.
Zeka Mnyamana is the spokesperson for MRC’s Black Economic Empowerment partner, the Xolobeni Community Empowerment Company (XOLCO). Mbuthuma labels Mnyamana as “a traitor”, as she says he once opposed mining, saying there is no reason why mining and eco-tourism cannot co-exist. “Tourists go to Johannesburg and there are mines there.”
The decades-long struggle against the proposed mine is not without its consequences. The corrosive effect is in the acts of betrayal and alleged murder calcifying positions and redefining relationships into pro or anti-mining camps. It is no glib assessment to say this could emerge into an internecine conflict in its most sincere form – destructive, deadly, among family and inherited by coming generations as blood feuds.
Sinegugu Zukulu, the Eastern Cape Environmental Program Manager for the NGO Conservation South Africa, and originally from Amadiba’s Baleni area, about 15 kilometers inland from the proposed mining site, acts as an ACC advisor.
“The Amadiba are a clan, we are all related,” he says.
His opponent is Zamile Qunya, who head ups XOLCO.
“We are brothers, his great-grandfather was also mine. We were friends from Standard Six and beyond school,” Zukulu says of a friendship since soured.
“We have never had a direct fallout. When we meet, we meet as brothers. But we are no longer friends. It is the things he says in my absence, not in my presence, like ‘Sinegugu is a troublemaker’ and lately he has been spreading lies that I started XOLCO with him.”
“The social fabric of the community is being destroyed. When say an uncle dies and is pro-mining you are still obliged to attend the funeral. But people end up not eating the food for fear of being poisoned,” he says.
There are accounts of women being assaulted by herdboys for accepting food parcels from pro-mining interests, unexplained fires razing tourist infrastructure, reports of cash handouts by mining interests in exchange for support and anti-mining activists subjected to police raids and harassment.
Russel Hartshorne, 32, concedes the opportunity for a community lease agreement for the Mtentu River Lodge Guest House in 2011 came about when Qunya was wearing two hats, as XOLCO representative and also chair of the eco-tourism community body, the Amadiba Coastal Communities Development Association Trust. The trust was on the cusp of signing a deal with a major player in the eco-tourism field, but it was rejected at the eleventh hour by Qunya.
Hartshorne and his business partner stepped into the gap with little capital and have a written agreement with the community, including profit share and local employment, but admits it has little validity.
“If the community says go, than we go,” he says.
The pro-mining lobby claims 80% of the 2,000 to 3,000 people directly impacted by the proposed mine support it. Anti-mining activists claim the same percentage is against it. A 2007 report by the South African Human Rights Commission said “despite a chronic lack of infrastructure, the majority of the affected community are not in favor of mining.” Mbizana municipality is ranked as South Africa’s worst performing local government by the research and advocacy group Good Governance Africa.
Sebenzani Mchebi, at the age of 73, lives on a homestead among arable fields and livestock within the proximity of the proposed mining operation with 32 other adults and “I don’t know how many children”.
“If they bring the machines here where will we live? Where will the animals get their grass? Our water will be poisoned. Where do we get land like this? It will be the end of our lives. The government does not care, they are on the side of mining,” she says.
“We are prepared to die for this land, everyone is. Bazooka is not the first person to die (three other anti-mining activists are believed to have been poisoned),” says Ndovela, who is facing a charge of the possession of an unlicensed firearm after police confiscated the weapon while he was on his way to a community blockade to prevent officials gaining access to the dune site.
“We have no say about our land. Our ancestors fought for this land. Why are we going to sell our land to Australia?” says Ndovela.
Caruso did not respond to detailed questions from FORBES AFRICA.

‘Our Ancestors Fought  For This Land.  Why Are We Selling  It To Australia?’

Once upon a time, there was a poor little boy named Haile Gebrselassie in Asella, a village in Ethiopia’s dusty south. One of 10 children, he watched his father farm wheat and maize and tend to his cows and sheep. Poverty was the only constant in their life. School was 10 kilometers away, and every day, the young boy would run to his classes and back, covering the distance in minutes. Those were baby steps to global fame.
Years later, he would become Ethiopia’s most famous man entering record books as the world’s greatest distance runner.
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It all began when one day, on his father’s radio, a seven-year-old Gebrselassie heard of Miruts Yifter, the Ethiopian runner who won two golds at the Moscow Olympics in 1980. That made him decide his own course in life – he too would become a runner. The green countryside and rugged mountains of his hometown became his inimitable training ground.
While in high school, a 14-year-old Gebrselassie pleaded with his teachers to compete in the local marathon. He was the youngest in the competition, but was at least 60 meters ahead of the rest when he eventually won. The prize was a dollar – a princely sum. Overnight, he became school hero.
And in time, Ethiopia’s hero, winning two Olympic golds and eight World Championships, and setting 27 world records. The golds were for Atlanta in 1996 and for Sydney in 2000, when he competed with Kenyan Paul Tergat in an epic finish.
Many still remember the rapturous reception when he landed in Addis Ababa from Sydney; thousands thronged the streets all the way from the airport, hailing him like a king. To this day, he is known as the ‘Emperor of Long Distance’.
It’s March 2015, two months before announcing his retirement from competitive running, when FORBES AFRICA meets him for the first time.
Gebrselassie is seated on a pale leather sofa in a dapper suit, sporting a winning smile that people say is his greatest asset. He is undeniably affable. His office is on the eighth floor of the Haile &amp; Alem International building on the arterial Bole Road in Addis Ababa. There is raucous traffic below and the city is a giant construction site – new buildings coming up on either side of the road, and with them, swirling columns of dust.
The building we are in was constructed by Gebrselassie, all nine floors of it, now let out to other offices. Every business he owns has his indelible stamp: the Haile Gabrselassie Avenue in Addis Ababa (he has a road in his name) has another one of his iconic office buildings, so designed as to inconspicuously bear the letters H&amp;A on its face (A for Alem, his wife and business partner). He owns resorts in and en route to Awasa, about four hours by road from Addis Ababa, all of them five-star and named Haile.
It’s hot and Gebrselassie rues Ethiopia is not getting enough rain.
“I am the son of a farmer, I know this is not good,” he says.
He has a 1,500-hectare organic coffee farm in Ethiopia’s south, and he fears the land will be too dry.
Talk of his farm and village evokes memories of his childhood, and that first overseas trip to Belgium from there.
“In 1991, there was a cross-country race here in Addis and I finished fifth. That year, the top six finalists were taken to Belgium for the international competition. I finished eighth but I can never forget my first international trip,” smiles Gebrselassie.
The following year, he flew again, this time to Seoul in South Korea, where he won the 5,000-meter and 10,000-meter championships. The prize was a C180 Mercedes-Benz. He also won another C180 Mercedes-Benz in 1995. He says they are both proudly displayed at his resort in Awasa.
In the 2013 book Haile Gebrselassie: Emperor of Long Distance, he recounts that emotional moment when he won gold for the first time at the 1996 Olympics in Atlanta.
“…I had no worries about the sprint. I kicked with 200 meters and crossed the line with a new Olympic record of 27:07.34. My dream came true. Many things crossed my mind when I stood on top of the podium – pressure from Ethiopians, my promise to Alem, the hopes of the family… As soon as the national anthem started, I began to cry. It’s the only time I’ve cried on the podium.”
“I have run for more than 300 competitions so far. I have run for 27 years. But now, it is a different kind of running,” smiles Gebrselassie, referring to his multiple business interests in real estate, hospitality, imported cars, coffee and cineplexes.
“But I don’t think I am an entrepreneur, I am trying,” he says modestly.
He never expected his businesses to grow the way they have.
“I have built office blocks, shops, resorts, cinemas, gyms and schools,” he says.
Since 2014, he has also tried his luck at gold mining, working on exploration in Ethiopia’s southeast.
“Our geologists are working very hard. And we are investing a lot, a lot of money. We have found gold, but production will not be [now],” he says.
He has enough of the gleaming metal in his trophy cabinet too. How many gold medals, we ask.
“That is a good question. I didn’t count them, but could be more than 200. From 1992, until 2008, I have run an average of 15 competitions a year. That is a lot, [enough] to have run at least two times around the world,” laughs Gebrselassie.
The marathon man appears pensive before he speaks again.
“Because I travel a lot, I always think of how to improve my country. For example, if I walk in London, I would look around and wish we had those buildings in Ethiopia. And when I [have] the money, I would come back, and want to build. One building would lead to another.”
His drawing board includes a five-star hotel in Addis Ababa, named Haile, of course. Gebrselassie introduced local cinema to the city. His cineplexes currently showcase Ethiopian films to packed houses. He has even tried his hand at acting. In 1999, he starred as himself in the film Endurance, screened at his cinema house.
The film didn’t do well.
“It was not appreciated,” smiles Gebrselassie. “But the next film we screened was a love story [he was not in it], and that’s when the people came.”
Every November, Gebrselassie organizes the Great Ethiopian Run, commencing from Addis Ababa’s Meskel Square. The turnout in 2014 was 40,000 and growing each year; it’s a resounding success on the continent’s marathon map. In addition, in 2015, he was also part of the Two Oceans Marathon in Cape Town.
“Actually, my business [philosophy] is like this: there is business for money and business for satisfaction. I opened a school in the village I was born in and another school in west Ethiopia. The fees are minimal and I didn’t open them for profit… If you ask me how much my businesses are worth, it’s not only the property, it’s the people too. I work hard and I don’t see how much I have. I am happy,” says Gebrselassie.
He wants to make sure he’s setting the right example for the upcoming generation of athletes.
“Most runners or sportspeople; how many of them invest in business?” he asks. “I haven’t seen anyone invest money this way. And I know many sportsmen around the world. For me, the chances I have given my people, is worth more than a billion dollars. Most of the younger athletes [now] invest here. They say ‘Haile has inspired us’. To copy is not difficult, but to create something is hard. My farms, hotels and buildings give job opportunities for others. All the money has been from athletics. If you want to see a true billionaire, in terms of money, come back in five years. Don’t ask me how much money I have in currency, but the goodwill [I enjoy] is priceless.”
And who did he look up to for inspiration? “If you ask me who the world’s best long-distance runner is, I would say it is Nelson Mandela. If you have to be a runner, you have to be patient. After 27 years in prison, he forgave [his captors].” Gebrselassie met Mandela in South Africa in 1996 at a world cross-country event and they shook hands.
Addis Ababa being a small city, word, good or bad, gets around. It’s easy to see Gebrselassie is well-respected in the business community.
“He is not just an athlete, he is a smart businessman. What I like about him is he developed himself, is self-made,” says Tihitina Tutu Legesse, one of Addis Ababa’s top entrepreneurs in the furniture business.
On May 10 last year, the two-time 10,000-meter Olympic champion announced his retirement from competitive running. He ran his way to fortune, and there are now rumors that his next turn will be in politics, and that he will be running for parliament in Ethiopia in 2020. He told the BBC in an interview in February this year that he would like to be a politician.
“I think he is very brave. I really admire his strategy,” says Saba Kahsay, the Managing Director of REVO Construction in Addis Ababa. “He knows which fights to pick in terms of business. He has a very strong advisory committee. He does not do everything by himself. He has people doing it for him. He is not just a businessman but also a community man.”
Gebrselassie is expected to be at the Olympic Games in Rio in August where he will be television commentator.
But he is not packing away his running shorts, even though he has changed track to the boardroom. His sprawling hilltop home, where the 43-year-old lives with his wife and four children, overlooks the city. He wakes up before dawn every day to run on the hills of Entoto and their verdant paths. He cannot do without it; he says running is his life.

Farmer. Marathon Man. Businessman.

The Birchwood Hotel in Boksburg was an apt choice for these talks for two reasons: firstly, Boksburg is a mining town built on the digging of gold; secondly, it is a venue for boxing and home to former world heavyweight champion Gerrie Coetzee. The Friday before gold mining pay talks began in earnest, on June 16, there was a boxing tournament at Birchwood. At least the Friday fight night was fought under Queensberry rules.
The Association of Mineworkers and Construction Union (Amcu) led with its left. It may be merely the second largest union, representing 30% of the 93,000 gold miners compared to the majority National Union of Mineworkers’ 54%, but what it lacks in numbers it makes up for in chutzpah.
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“We are a serious union,” says Manzini Zungu, the spokesman for Amcu.
When the major gold producers in South Africa, the leading gold producer in Africa, made one of the best opening offers in history on July 6 – of between 7.8% and 12.96% – Amcu was the first to despise it. To rub salt in the wounds, in rejecting the offer, Amcu presented slides showing the salaries of the top mining bosses, of up to $1.7 million a year, juxtaposed with the salaries of underground miners.
“That was brilliant,” says an official from a rival union as he emerged impressed from the negotiating room.
“You can’t compare a CEO to a man who carries a shovel,” scoffed another.
Amcu put pressure on the gold employers to make a counter offer two days later. The employers stuck to their guns and Amcu deadlocked on July 8, taking a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA), the independent arbitration body. It was enough bad news to drive the value of mining stocks down by 10% on the day on the Johannesburg Stock Exchange.
The next step is a strike and Amcu proved, in 2014, this is not too difficult. In that year, the union took the platinum mines out for an unprecedented five-month stoppage that cost more than $2 billion.
“The problem is the employers fear Amcu,” says a former member of the NUM negotiating team.
The rest of the unions, NUM, UASA and Solidarity, stayed at the negotiating table but are equally disgruntled.
How the gold employers are going to close the gap, with pay demands that go up to 80% from NUM to 100% from Amcu, is anyone’s guess.
The employers plead poverty. Figures released by the Chamber of Mines show the demands would load R16.5 billion ($1.32 billion) onto the wage bill of South African gold mines. The wage bill, in 2014, was R23.5 billion ($1.88 billion), making up 55% of gold mining costs.
“If all of the wage demands are granted, nearly all of the mines in South Africa would be under water. It could be the end of the gold mining industry,” warned Elize Strydom, the chief negotiator for the employers.
The employers also set great store by what it calls social compact – a package of pensions and welfare benefits to complement the pay. Like the opening offer, this too fell on stony ground.
“We don’t want packages, we want pay,” says David Sipunzi, the general secretary of NUM.
The employers also tried to link a pay deal to profit share if the gold price goes up. They promise there will be bonuses if profit margins, after costs have been deducted, stay above 6%. Clearly, there will be talk about retrenchments and pay cuts if profits turn to losses.
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“Will the bosses take a pay cut?” asks one of the more cynical officials at the talks.
The unions’ argument is simple. They want to use these talks to close the pay gap between the boardroom and the bottom of the damp shafts, miles underground where the gold is.
You could argue that a secretary answering a telephone in an air-conditioned office in Johannesburg earns twice as much as a miner who spits and sweats in the clammy heat, more than four kilometers underground for as little as $600 a month.
Amcu and NUM also want to close what they call the “apartheid gap” in pay – a legacy from the old days when the cheap labor of black miners made vast profits for both the mines and the state.
“We don’t fear the threat of retrenchments made by the employers, they are retrenching at Doornkop (a Harmony Gold mine) as we speak,” says Sipunzi.
Analysts have warned rising costs and falling productivity in the gold mines could cost the industry 20,000 jobs before the end of the year. The number of workers in the gold mines has fallen from 180,000, 10 years ago, to a mere 120,000, an alarming decline in a nation that has mined nearly half of all of the gold in the world.
The only jab in the eye for Amcu so far is its dismal attempt to boost its numbers represented at the talks. It claimed an extra 6,500 members, but independent auditors say 6,000 of those could not be verified. A source among the employers says of the 1,000 members claimed at AngloGold Ashanti, a mere seven turned out to be true.
What is clear is that whichever of the two main unions, Amcu and NUM, is seen to get the best deal in these talks will attract a legion of new members to their corner. Seconds out.

Gloves Off In Gold

I have always been intrigued by sub-Saharan trade. In the interest of understanding caravan journeys better, I made trips to Mali and Morocco to observe their most famous routes. Goods such as gold, ivory – and regretfully, millions of  slaves – were moved from sub-Saharan Africa to Timbuktu, then through the desert and over the Atlas mountains to Marrakech and onto the port of Essaouira, which served as Morocco’s principal port, offering the cargo of the caravans to the world.
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My journey from Casablanca airport to Essaouira was a 400-kilometer ride that passed along the Atlantic sea coast and then inland along plateaus dotted with argan trees endemic to the region and known the world over for its use in producing aromatic oil. It was late in the night when I arrived in Essaouira, an Arabic/Berber medina contained within a European fortress with winding alleys and streets. Finding my seafront hotel was an adventure in itself, in a town with many dead-end alleyways.
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It was a moment of great excitement when I opened my windows, illuminated by the Maghreb sunlight, and realized my room was right on top of the ramparts of the fort overlooking a broad seafront. Later, while walking along the crenellated ramparts of the cannon-lined fort, I could see the city wake up on one side while the finest fisheries off the waters of Morocco were coming alive with boats and attendant gulls on the other. Upon reaching the port, I caught a glimpse of the lives of fishermen who were unloading their large catches of sardines and conger eels; a haul big enough to sustain its economy.
The historic charm of the UNESCO World Heritage listed city is evident in every twist and turn in the maze of pedestrian-only streets that make up the medina. Broken facades and decorative doors open to reveal ancient Kasbahs lined with courtyards and fountains. Essaouira has been in existence in recorded history since the days of imperial Rome, where the purple stripes of the senatorial toga (garment of ancient Rome) came from a dye factory, made from sea snails found here. Ruled by Romans and then by Berber kings, it was swept up under the influence of Islam in the eighth century and ruled by Arab kings until the Portuguese captured it in the 16th century. This was followed by French occupation and it finally came under Moroccan rulers in 1777 when it was declared an independent nation.
This rich history of occupation has provided Essaouira with a French-designed fortress, Genoese-designed port citadels, a classic Arabic medina complete with a royal Kasbah, Jewish mella or quarter and a European enclave.
Walking through its winding streets I could see Arabic, French and Spanish influences in the architecture.
Essaouira’s real beginning as an import-export center came in the 1770s when the sultan of Morocco appointed families from Casablanca, Marrakech and other northern cities to settle here and become official royal traders to conduct trade with Europe and the Americas. It has been noted that seven of the town’s leading families in the 19th century were Muslim, while 25 were Jews, who once comprised 40% of the population.
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The homes of former Jewish traders and the synagogue reveal themselves through Hebrew carvings on the door lintels.
The souk area was quite interesting with many shops selling spices, wood carvings and cabinetry. Unlike the bustle found in the souks of Marrakesh, the pace here was very relaxed under the warm sunlight and a steady breeze from the ocean. The fort area has more upscale shops while the souks had a classic Arabic atmosphere. The delicious seafood available in restaurants around the harbor was absolutely amazing and at very reasonable prices. I found men here wearing the classic djellabas and women walking around in colorful qmis (long jacket) covering their baggy pants.
Essaouira is best reached from Marrakesh by road and can be covered as a day trip. Emirates Airline can fly one to Morocco from any big African city via Dubai.
With its unspoilt beaches, luxurious hotels, wonderful cafes and seafood restaurants, Essaouira is fast becoming a must-visit destination. Morocco has a lot to offer. In this context, Essaouira is often ignored. But for the intrepid traveler, it offers a special place where the caravans of the Sahara finally emptied its wares for the world to consume.

137-Forbes

Where Africa’s Caravans Were Headed

The world’s second largest exporter of cocoa is currently experiencing serious economic pain.
Proceeds from Ghana’s cocoa, timber and gold exports have not been enough to cater for its national lifestyle. Add liquid gold to the mix and suddenly this regional champion is showing symptoms of the proverbial Dutch disease so early in its crude oil career.
Ghana’s financial system is now frequently constipated, coping with low savings and high borrowing rates. Its also is characterized by unsustainable appetite for foreign goods, resulting in missed spending targets, inflation and dollar-denominated thinking. Sustaining real economic growth has therefore been difficult. In a nutshell, West Africa’s second largest economy is engulfed in a failing currency crisis.
The Ghanaian cedi is suffering its worst humiliation against major trading currencies in decades. Consumer price inflation peaked at 14.5% in April. Public sector spending has remained way above the regional sub-Saharan average for many years, even as the country continues to record fairly strong growth.
By contrast, the cedi has depreciated in recent years. As a result, equities on the Ghana Stock Exchange (GSE) have also been losing weight, shedding about 16% of their value in US dollar terms this year alone.
The business community and ordinary Ghanaians feel helpless. Their view is that politics now threaten to transform their currency into ordinary tissue paper.
“Notwithstanding the fact that Ghanaians are resourceful and resilient people, local businesses have been hit hard by this currency crisis… the authorities need to cultivate public empathy, they need to involve the business community in their fiscal planning process,” says Albert Ngumba, general manager of e-commerce firm Cellulant Ghana.
The crisis has induced a total slowdown of the once stable polity and left politicians and economists puzzled on how to stop this once bubbling economy from drifting away.
How is it that Ghana now finds it difficult to pay its bills after years of sustained economic growth and after commercial production of crude oil began in 2010? How can a nation be growing into poverty?
For those interested in the fortunes and foibles of African nations over the last five centuries, this is an old tale. The logic of the international marketplace is a simple linear equation: if weaker economies have weak currencies then stronger currencies will produce stronger, more robust economies. This is the turf of the world’s central banks.
Of course, beyond the currency conundrum, one of the reasons why economies fail is fiscal indiscipline. This has been the bane of Ghana’s current economic woes. Its current account deficit, according to the Bank of Ghana (BoG), the banking industry regulator, was a whopping 12.30% of its GDP, as at December, 2013. Debt-to-GDP ratio is forecast to reach 51.2% by the end of 2014. If this figure ever gets to the 60% mark, Ghana might lose its status as a lower middle-income country, according to the IMF.
Government’s quest to increase teachers and civil servants pay blew up in its face: public sector salaries now gulp 70% of internally generated revenue. These civil servants represent less than 1% of the population. With falling commodity prices, and energy supply hiccups, the fiscal deficit is expected to persist for at least another five years.
To stem the negative currency tide, the BoG outlawed companies from maintaining domiciliary accounts and engaging in foreign currency denominated transactions in February. It also limited withdrawals to approximately $10,000. The plan did not work. The cedi has depreciated by more than 6.4% since then. The BoG promptly unfastened the guidelines in July. The effect of this policy flip-flop on the psychology of the markets has been mixed: macro- and micro-level economic pains, heightened currency and sovereign risk ratings, faith in the ability of the economy to turn around in the long term, and erosion of confidence in government’s economic management capabilities.
The matter is threatening Ghana’s hard won reputation as a magnet for foreign investment. Ghana’s share of Africa-bound FDI ($3.3 billion per annum) needs to grow. The value of exports also needs to grow. Ghana’s business and political elite need to be stimulated to increase their appetite local products.
For most Ghanaians, whose outlook on life has been defined by decades of mass penury and perseverance, this is proving to be a bitter pill to swallow, especially after President John Mahama made promises of steady and sustained economic progress.

Growing Into Poverty

The French-speaking country, perched on the western tip of the continent, boasts one of the best developed tourist industries in Africa, with six major game parks and reserves. Senegal is home to nearly 13 million people and has remained stable even as neighbors Mali and Guinea and nearby Côte d’Ivoire suffered military coups and political upheavals.
But Senegal had its share of political violence in January 2012. Dakar burnt when the constitutional court allowed incumbent Abdoulaye Wade to seek a third term in office. The 85-year-old’s decision violated the country’s constitution; protestors set fire to large parts of the city. In the end, Wade was defeated by Macky Sall.
In June, on his first official visit to Sub-Saharan Africa, United States President, Barack Obama, visited Senegal to strengthen business relations and encourage investment. Obama’s visit recognized the United States’ commitment to democracy, in a region where dictators and civil strife are common.
A few weeks later, in July, rating agency, Standard and Poor’s (S&amp;P) revised Senegal’s sovereign credit rating outlook to stable from negative. S&amp;P believes the Senegalese government will succeed in cutting its fiscal deficit and carrying out reforms that will lead to faster economic growth. Moody’s Investor Services rated the West African nation B1, before its planned sale of $500 million of Eurobonds in 2011. Moody’s rating is equal to the B+ rating by S&amp;P, along with Nigeria, Kenya, Mozambique and Zimbabwe to name a few.
Senegal earns most of its foreign exchange from fish, groundnuts, phosphates, tourism and services. The phosphate industry has struggled for two years to secure capital and its reduced output has hurt GDP.
In 2007, Senegal signed agreements with foreign companies for new mining concessions for iron, zircon and gold. Various foreign investors have agreed to modernize Dakar’s port and create a new special economic zone.
Its agricultural sector is subject to rainfall and changes in world commodity prices. Following droughts that cut agricultural output in 2011, the West African nation’s economic growth is expected to accelerate this year. According to a Reuters poll, Senegal’s GDP should expand to 4.4%; the International Monetary Fund (IMF) hopes the completion of infrastructure projects, recovery in its agricultural sector and mining projects will boost it further.
The IMF also expects Senegal’s current account deficit to decline, but remains fearful it could go high because of imports associated with investments in the energy and mining sectors. In September, the IMF urged the Senegalese government to maintain its budget deficit target—expected to be reduced to less than 5% of GDP this year—in order to ensure fiscal sustainability.
Senegal relies heavily on donor assistance and foreign direct investment, which in 2000 represented around 32% of overall government spending. Under the IMF’s Heavily Indebted Poor Countries debt relief program, Senegal will benefit from eradication of two-thirds of its bilateral, multilateral and private sector debt.
The country rose from the ashes through an economic reform program following its economy’s contraction by 2.1% in 1993. A year later, with the help of the international donor community, Senegal began a 50% devaluation of the country’s currency; government price controls and subsidies were steadily dismantled. It made for a real turnaround with a real GDP averaging over 5% annually over a decade. Annual inflation was pushed down to low single digits.
Following the country’s 2012 growth at an estimated 3.7%. The African Development Bank (AfDB) believes that growth will accelerate this year and is projected at 5.1% in 2014. AfDB says the growth projections are calculated in the hope that the government’s socio-economic program will be implemented along with the continuation of a toll motorway, the construction of Blaise Diagne International Airport, which is expected to handle around 10 million passengers by 2020, and other infrastructure projects.
Dakar, the melting pot capital city, is one of the busiest cruise ship ports in Africa and is home to around 1.5 million people. It’s impossible to miss the imposing Monument of the African Renaissance statue, when in the capital. As the tallest statue on the continent it stands at 49 meters on one of the twin hills, known as Collines des Mamelles.
Just off of Dakar’s coast is Ile de Gorée—the small island is a big tourist attraction because of its history as a slave trading port.
Dakar also lends its name to the Paris-Dakar rally, which was established after Thierry Sabine got lost on his motorbike in the Tenere Desert during the Abidjan-Nice Rally, in 1977. He came up with a new route starting in Europe through Algiers, in Algeria, crossing Agadez, in Niger, before finishing in Dakar. Most rallies took this route, until security threats in Mauritania forced organizers to cancel the 2008 rally. The following year it moved to South America and has stayed there.
As a member of the West African Economic and Monetary Union, Senegal is working towards greater regional integration with a unified external tariff and a more stable monetary policy.
The economy continues to suffer from an unreliable power supply, with widespread blackouts in 2006, 2007 and 2011, which led to public protests and unemployment. The government is working hard to solve the problem. High unemployment forces many to flee the country in search of jobs.
The country is one of the few on the continent to have issued a Eurobond, that is debt issued in a currency other than the that of the country or market in which it is issued. Eurobonds are attractive to investors because of their small par values and high liquidity. Senegal issued a $500 million 10-year Eurobond in May 2011 at a coupon of 8.75%, to raise funds to improve infrastructure.
In June, Reuters said the country is likely to issue another $500 million 10-year Eurobond this year at an interest rate of around 6%. The IMF said the bond would help the country close its financing gap and reduce its reliance on costly short-term financing from the regional market.

Ashes To Eurobond

When gold is poured it doesn’t glitter. It drips out in thick globs of orange. If a small amount splashes you, it will burn a hole right through your hand. Yet, the moment it is out of the furnace, you can feel your hand drawn toward it. This is the allure of gold: the most sought after commodity in the world.
In the sooty recesses of the 93-year-old Rand Refinery, to the east of Johannesburg, South Africa, almost 50,000 tons, a third of the world’s gold, has been melted by craftsman clad in singed overalls. In a place that never sees the light of day, where the churning of machinery can deafen you and the light and gas from furnaces can blind you if you don’t wear safety glasses; no one leaves without a full-body x-ray.
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It takes 15 minutes to pour 10 bars, each worth R5.7 million ($570,000). By the time it’s cooled, the rising price of gold makes it worth a million more.
“In this industry no day is the same as the previous day, especially right now when gold is so volatile,” says Howard Craig, CEO of Rand Refinery.
The refinery turns raw gold, flown in from the mines by a fleet of heavily armed helicopters and trucks, into bullion. In churning out the wealth of nations, these men are able to do what machines cannot; pour molten metals into casts to a perfect weight of 12.6kg. The refinery makes its money by this smelting and refining of the metals.
In October, things were cooking when gold was selling at $1,790 an ounce. Since then, the gold industry has hit a downward spiral of fluctuating prices, ending $300 lower at around $1,400.
“I’m still very bullish about gold and a lot of people panic when they see the gold price drop by $150, like it did in the last couple of weeks. But for me what was really encouraging was [when] people came into the market and we have seen such massive purchasing and demand as a result of the price going down. I think, as a leader at a gold refinery, you have to believe in it. But I think there are some good fundamentals that underpin that belief,” says Craig.
Adrian Saville, an investment analyst from Cannon Asset Managers, believes that, this year, gold’s role as a buffer against economic uncertainty has waned.
“First, the US has a much firmer footing in its economic recovery. Second, through 2012 there was a huge question mark over the survivorship of the euro, especially surrounding Greece and the so-called Grexit [Greece’s possible exit of the Eurozone]. Today, some of this anxiety has been taken off the table and the euro appears to be on firmer ground. Third, in early 2013, investors have been encouraged by Japan’s massive liquidity boost, which has helped reflate the Nikkei and restore some lost confidence,” says Saville.
The analyst says that, as the price has decreased, the historical relationship with other precious metals has revived.
“At first glance gold has no inherent investment value. Gold has no real industrial application; it is a lump that people want or desire. In this way, the gold price is largely sentiment driven, which is hardly the basis for successful investing. But, at the same time, when countries are wildly printing money, gold offers people a stable store of wealth and that makes it very appealing. In 2000, two million Zimbabwean dollars would have bought you a wheelbarrow of gold. In 2008, you would have had a wheelbarrow full of paper,” says Saville.
They say, get too close to a fire, or molten gold, and you will get burned. It seems, for the moment, the allure of the shiny yellow metal is worth the risk. The trick is, getting out before you get a hole in your hand.

Tag: Gold

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