The appointment of Ben Magara as CEO of Lonmin is the best decision made by the Lonmin board since they got rid of former CEO Brad Mills in September 2008. 
Mills, a self-confessed mechanization zealot, whose attempts to mechanize Lonmin’s mining operations were unsuccessful, stepped down by mutual consent and was soon followed by his chairman, John Craven, who retired in January 2009. 
Prior to this, Craven had famously declared Mills had the full support of himself and the Lonmin board for his policies. 
Mills was replaced by former chief financial officer Ian Farmer, who made major changes. He was making good headway when he resigned last year because of ill-health at precisely the same time the labor mayhem erupted at the group’s Marikana mine. 
Forty-six-year-old Magara is a highly-experienced mining engineer and, up until now, an Anglo American Corporation ‘lifer’. He worked for the group for 22 years, starting on the Wankie Colliery, now known as Hwange, in Zimbabwe, before coming to South Africa in 1994. 
He has occupied a string of top positions in Anglo’s coal division and is currently head of engineering and capital projects at Anglo American Platinum (Amplats). Magara will assume his position at Lonmin on July 1. 
The obvious question is: why is Magara leaving Anglo? You don’t have to look too far for the obvious answer. Sources indicate he was overlooked for the top position at Amplats, where last year Chris Griffith was appointed to replace former CEO Neville Nicolau. 
That’s the second time Magara has been overlooked for a top spot at Anglo, after being shifted into Amplats during a group management reshuffle in 2009, from his previous position as CEO of Anglo’s South African coal operations. 
Magara ticks all the boxes for the top position at Lonmin starting with his profession, because a criticism frequently voiced by analysts over mining company CEOs with a financial background, is that they don’t have the technical background to stop their mine managers pulling the wool over their eyes. 
But he also comes with plenty of experience in the areas that have been increasingly crucial to running a mining group in South Africa—black economic empowerment (BEE), safety and health issues and, arguably most important of all, dealing with politicians. 
In his position at Amplats Magara was responsible for bringing the group’s Unki platinum mine in Zimbabwe on stream. It was developed successfully and with little confrontation with the Zimbabwe government over indigenization. 
At Anglo Coal, Magara made his name running the New Denmark Colliery, where he introduced a new and highly successful safety program dubbed “Smarty”—an acronym for ‘safety must always relate to yourself’. He was also closely involved with the creation of Anglo Inyosi Coal—a BEE joint venture setting up a major domestic coal company, which holds the contract to supply the new Kusile power station being built by Eskom—South Africa’s national power supplier. 
Magara is also no stranger to crisis management, having been appointed head of the working group created to deal with the coal supply crisis early in 2008, when Eskom’s mismanagement of its coal stockpiles triggered a temporary shutdown of the South African power grid. 
He pulled no punches at the time declaring in an interview that: “Had Eskom placed orders for extra coal sooner, we could have done something about it sooner.” 
I singled out Magara in the 2010 edition of Rainmakers and Pot Stirrers: Your Guide to the 100 Most Influential People in SA’s Mining Industry as a man destined for bigger things. 
So I am not surprised to see him moving to the top slot at the world’s third largest platinum producer. He faces some huge challenges but I have no doubt he’s going to crack it

Ben on the button

Just how much is the South African government interfering with the operations of the country’s major mining groups through undue political pressure to save jobs at all costs?
The question has to be asked after the climb down by Anglo American Platinum (Amplats), in May, over its restructuring plans to cut 14,000 jobs. The company bore the brunt of a full-scale political assault and subsequently revised its plans to cut 6,000 jobs. There is also speculation that AngloGold Ashanti (AGA) had been denied permission by government to restructure its South African mines into a separate unit.
The bottom-line is that this level of interference could hurt both business prospects and share prices.
In the case of Amplats—the world’s largest producer of platinum—interference by government risks are not only keeping the group’s working costs higher than they should be, but also prolonging the oversupply in the market.
That is because the South African mines, which account for more than 75% of world platinum production, are being hampered in their actions to chop back on uneconomic output and so reduce the metal surplus, which is holding the platinum price down.
Holding platinum prices lower for longer would affect the entire platinum industry and not just Amplats.
The point was made clearly by GFMS research director, Will Tankard, in the consultancy’s 2013 Platinum and Palladium Survey.
Tankard says the platinum market was in a delicate position with any production recovery in South Africa likely to be very restrained. He expected mine supply to rise by “a small two percent provided restructuring is allowed to take place”. The situation on the gold mines is not as crucial for the gold price because the days when South Africa dominated the gold market, as the world’s largest producer, are long gone.
Investors would dearly love to know if the South African government blocked a proposal by AGA to separate its South African operations from its international ones, after allowing Gold Fields to go ahead with such a restructuring in February.
Newly appointed AGA CEO Venkat Venkatakrishnan is not telling.
“That’s market speculation and we never comment on market speculation,” he says.
That was in reply to questions at the group’s presentation in May, regarding its March quarterly results, which stated that AGA was reviewing its assets and that there might be another asset sale later this year.
Venkatakrishnan also drew attention to the poor response from investors to Gold Fields’ decision to split off its high-cost South African mines into separately listed Sibanye Gold, although he did not mention Gold Fields by name.
Assuming that AGA tried to split off its South African operations there is an immediate question: Why was it blocked but Gold Fields was able to carry out its restructuring with minimal hassle?
There are various reasons for that according to Gold Fields CEO, Nick Holland. He reckons it could have depended on the kind of restructuring AGA was trying to do, although he stressed that he also did not know whether AGA had approached government for permission.
“It all depends on what kind of deal AngloGold might have proposed. With Sibanye, we made sure we left those assets with plenty of financial juice and put them in a position where they could finance their own future growth. We were very sensitive to the issues around ensuring the sustainability of those assets into the future,” says Holland.
Holland added that Gold Fields had one major advantage in that the mines which the group formed into Sibanye—Kloof, Driefontein and Beatrix—were already housed in a separate company within the Gold Fields corporate structure, apart from the group’s foreign operations.
That restructuring was carried out a decade ago when Mvelaphanda Resources became the BEE partner for Gold Fields’ South African operations.
“As a result we did not need to get a whole lot of regulatory permissions to do the deal,” says Holland.
But Holland described undue interference in the mining sector as a hot potato, saying that restructuring of the industry and the way it does business was essential for its survival.
Last year, Holland reckoned the South African gold industry would largely cease to exist within five years, unless major changes were made to improve productivity.
“We are going to go down the slippery slope, that much quicker, if government does not listen to the industry,” he says.

Slithering Down  The Slippery Slope

Guinea, a mining capital in West Africa, faces great economic problems as it heads into parliamentary elections next month. The country faces ethnic tensions, threats to democracy and economic instability.
When it comes to resources, Guinea could be regarded as one of Africa’s richest countries. Rich in minerals, hydropower and agriculture, Guinea also holds almost half of the world’s bauxite as well as substantial amounts of iron ore, gold and diamonds. These resources remain under exploited.
Reforms are underway with tighter monetary policy and budget. According to the African Economic Outlook, in 2011 the Guinean economy progressed after the return to constitutional government. This saw real GDP peak at 4%. Despite government’s strict budget policy and determination to curb credit, inflation remained at a high of 21.2% in 2011. It is predicted to drop to 10.1% in 2013.
The International Monetary Fund (IMF) and World Bank’s International Development Association (IDA) have supported Guinea in its effort to gain debt relief. Combined, the IMF and IDA contributed $2.1 billion to the country in 2012.
In October 2011, the African Development Bank (AfDB) backed 77 Guinea operations which were worth approximately $818 million. These operations included: 58 projects, nine studies, seven institutional support operations and three non-project loans.
With the economic challenges faced by Guinea, this year’s elections will be regarded as a beacon of light for the country and will hopefully bring change to the nation. The eyes of the world will be on the country as they vote for their president.
President Alpha Condé, 75, was elected in 2010 in the first credible democratic elections since the West African nation gained independence from French rule in 1958, but parliamentary elections that would see Guinea’s full transition to civilian rule have been delayed for almost two years. The vote was originally scheduled for May 12 but elections have now been delayed until June 30, 2013.
In late February thousands of supporters of the leading opposition party, Union des Forces Démocratiques de Guinée (UFDG), took to the streets accusing Condé and his ruling Rassemblement du Peuple Guinéen (RPG) of attempting to rig the vote. Nine were killed in clashes with security forces and hundreds injured in the riots. The UFDG is backed by the Peul, the largest ethnic group in Guinea, whose supporters accuse Condé’s government of politically favoring the Malinke, the second largest ethnic group in the country.
With the opposition walking out of talks with the government that were organized in the aftermath of the violence, and calling for further protests and strikes, international observers are concerned that Guinea could further descend into violence and derail the nation’s journey to democratic rule.
Guinea’s main opposition leader, Cellou Dalein Diallo, who lost to Condé in a tight presidential run-off in November 2010, said the opposition would do everything to stop the election if it was held without them, according to a report by Reuters. Analysts say this is a troubling sign.
Vincent Foucher, a senior analyst for West Africa at International Crisis Group told FORBES AFRICA that the political standoff could setback Guinea’s economic gains.
“If they blow this one there is a very serious possibility that people in the armed forces could say, ‘You politicians are not able to handle those democracy things so we [will] step back in,’ and that would bring us back to 2008 which would be a real shame,” says Foucher.
He adds that basic consensus on the electoral process must be achieved for the elections to go ahead.
“The situation is so tense that I do not believe that full consensus is possible.”
Ahmed Sékou Touré, Guinea’s first president, was a firebrand socialist who rejected Charles de Gaulle’s offer of integration into the Franco-African community. Touré ran an authoritarian government for over 20 years in which torture, arrests and executions were commonplace.
After an unsuccessful invasion led by Portuguese Guinea, now Guinea-Bissau, Touré became increasingly paranoid, accusing the Peul population of attempting to overthrow the government. After his death in 1984, a group of army generals staged a military coup and Lansana Conté became president, and was followed by Moussa Dadis Camara in 2008.
Guinea came into the international spotlight in the aftermath of the September 28, 2009 massacre of some 150 opposition protestors and the rape of more than 100 women by security forces during the military regime of Dadis Camara. The International Criminal Court is currently investigating the case but Human Rights Watch has said the government needs to do more to bring those responsible to justice.
Due to mounting international pressure, Guinea held its first democratic presidential election in 2010. International observers deemed the elections free and fair but they were marred by ethnic rivalry and clashes between civilians and security forces.
Foucher says there have been significant moves away from the tyranny and turmoil of the past but that Guinea still has a long way to go.
“There are some interesting developments and you could say there is a dialog about electoral institutions.”
In addition to its bauxite reserves, Guinea has large iron ore, gold and diamond deposits and has long been on the radar for international investors and multinational mining companies. Upon taking office, Condé promised to redevelop the mining sector and review existing mining contracts signed under previous military dictatorships.
In 2011, Condé revised Guinea’s mining code to allow the government to take a minimum of 15% of shares in mining companies operating on its soil, with an option to buy a further 20%. The government has set up a review body to look into previous mining contracts and overhaul the mining code that determines the role the state plays in governing the industry.
Resources watchdog Revenue Watch Institute, funded by billionaire George Soros, is advising the Guinean government on transparency and how to better negotiate with large mining companies. Leading development economist Paul Collier is also an advisor to the government and Tony Blair’s Africa Governance Initiative has a presence in the country.
In an interview last year with The Guardian, president Condé, a former pro-democracy activist, said he would be “The Obama and Mandela of Guinea” and that he would transform the nation into a stable and developed democracy. But analysts say Guinea’s future stability will largely depend on his ability to negotiate with the opposition and build trust around the electoral process.
Guinea is emerging from a long period of political instability and the socio-political situation remains uncertain. Political differences concern the future of the electoral process and financial and logistical problems.

A Test For  Guinea’s  Fledgling  Democracy

Sam Jonah has broken rocks miles underground and brokered deals over the boardroom table. He’s advised world leaders and discovered a passion for parrots. He is probably one of the few men in the world to be knighted in London nearly 30 years after sweating as a miner in the searing heat, miles beneath the country of his birth.
It all began in 1949, Jonah was born in a military camp in Kibi, Ghana; his father—a sergeant major and World War II veteran, served in the Royal West African Frontier Force. Soon after, Jonah Senior left the army and set up a construction company. The family moved to Obuasi where Jonah went to school. It was after high school that Jonah made the surprising decision to work underground at Ashanti Goldfields Corporation’s (Ashanti) Obuasi mine, the only mine in Ghana. Jonah’s classmates were going into law and medicine, while he was going to work shoulder-to-shoulder with men who had barely gone to school.
“My business was breaking rock,” he says.
Jonah saw that mining was run by whites and wanted to change it. There were tough days underground. Jonah calls it his most humbling experience and with merely a high school certificate and no experience, he had to sink to the bottom of the barrel to learn to survive.
“You learn quickly how to get what you want from people who are better equipped, who are better skilled, who are better experienced, who are much older than you are,” he says.
In his quest for more, Jonah won a scholarship to study mining engineering at the Cambridge School of Mines, in England, which later awarded him an honorary doctorate. He returned to Ashanti and moved up the ranks. Then he returned briefly to London to study business at Imperial College, now the University of London.
It was during these exciting days at Ashanti that tragedy struck. One day, Jonah was underground when the chamber’s ceiling fell in, trapping and killing miners. It was time for quick thinking. Jonah saw a man trapped under rubble who showed signs of life by muttering softly. Under Jonah’s guidance, a team worked to pull the man free and carry him to the lift. The miner, whose legs were crushed, drew Jonah close and thanked him. Four hours later the miner was dead. This was the life Jonah chose as a young man; a life he likens to that of a soldier.
Jonah’s life was moving apace. In 1979, air force officer Jerry Rawlings, then 32, led a coup in Ghana and nominated Jonah, who was the same age, to be Ashanti’s vice president. In 1986, the late Tiny Rowland, the founder of Lonrho, which owned Ashanti, appointed Jonah as managing director. This was at a time when production at the company’s single mine had deteriorated and the industry had yet to see a black man at the helm.
Jonah’s father had once said that the day Ashanti was run by a black man, would be the day he left town. Jonah had the pleasure of telling his father that the day for him to pack his bags had come.
In his new position, Jonah introduced his ‘Africanization Policy’. He wanted to change an industry that was run by whites. He wanted to attract his countrymen to the industry to prosper like he had, by forcing expatriates to fulfill their contractual obligations to impart skills. Moreover, Jonah wanted to cut the expense of expatriates. Why pay a foreigner four times what you would pay a Ghanaian to do the same job?
This policy was unpopular among expatriates but it was all about the big picture in a growing company.
“Glass ceilings were punched through,” says Jonah.
Jonah considers business to be all about people. He feels that it is a leader’s responsibility to identify talent and harness it, to set aside one’s ego and surround oneself with the very best, to make one look good.
“Wisdom does not reside in the head of only one person,” warns Jonah.
Jonah says his parents taught him all he knows about leadership. They encouraged humility, told him that good days are not forever and that he should never give up.
In 1999, Jonah needed all these skills when Ashanti faced a liquidity squeeze. It came at a bad time for the company as it was trying to raise $125 million to build a mine in Tanzania.
The root of the problem was hedging done by the company when the gold price was low. This was viewed as a risk management tool and a price protection mechanism. Unfortunately for Ashanti, a decision taken by global central banks saw a sharp increase in the gold price. The market price was greater than the hedged price and the company did not have enough cash for margin calls because it had pumped a lot of money into new mines. Jonah says this was a bruising time for the company and the most difficult of his career. The company’s share price fell to the point that the New York Stock Exchange was considering delisting it. It took eight months to recover and years to prosper.
Jonah, the driving force behind Ashanti’s growth, sees opportunities where others don’t. In his time, Ashanti grew from a single mine in Ghana to the second largest gold producer in the world.
The company was public until the Ghanaian military government under General Acheampong, took 55% share in 1972—making it a partnership between the government and Lonrho. In the quest for growth, Jonah and his team convinced the partners that better days were ahead if the company went public again. Once Ashanti listed in both Ghana and London, the government held 17% of the company and Lonrho 27%. Between 1994 and 2004, Ashanti went on the acquisition hunt in an attempt to be both an entrepreneurial as well as a conservative company. It extended its operations in Ghana, Australia, Zimbabwe, Guinea and Tanzania. In 1996, Ashanti became the first African-based company to be listed on the New York Stock Exchange.
There is a saying that goes: “No good deed goes unpunished.” As Ashanti grew, the hunter became the hunted. Success attracted the interest of numerous companies.
Jonah felt the choice was to grow from within, or agree to be part of a bigger outfit. It proved difficult trying to convince partners that issuing shares, thus diluting power, was best. The government was faced with a competitive demand for its money, while Lonrho wanted to focus more on platinum. With no other defense, a merger was the only option.
The $1.48 billion merger between Ashanti and AngloGold, then the seventh and second largest gold producers respectively, was far from a merger of equals.
“We were punching beyond our weight,” says Jonah.
Despite this, Ashanti’s management secured key positions within AngloGold Ashanti, with Jonah becoming the executive president of the merged entity.
After his time at AngloGold Ashanti, Jonah became a serial director. Some junior mining companies approached him to guide them to success, as he had done for Ashanti. Equinox Minerals, a mining exploration company based in Zambia, was at the feasibility stage when it approached Jonah. Years later, in 2011, the company that had a market capitalization of $63.1 million in 2006, was sold to the Barrick Gold Corporation for $7.4 billion. Moto Goldmines, in Ghana, grew from a $50 million market capitalization company and was sold to Randgold Resources and AngloGold Ashanti in October 2009.
Since AngloGold Ashanti, Jonah has sat on at least 18 boards of companies.
Jonah currently sits on the boards of a few companies, including Vodafone Plc. He is also the founder and chairman of Jonah Capital, a private investment holding company, based in South Africa, with interests in mineral resources, real estate, agriculture, construction materials, financial services and oil and gas services.
His counsel has extended beyond the business world. When former South African President Thabo Mbeki set up the International Investment Advisory Council in 2000, Jonah was the first and only African to sit on it. He has also been an advisor to Nigerian Presidents Olusegun Obasanjo, his successor Umaru Musa Yar’Adua and Goodluck Jonathan. He was a founding member of Ghanaian President John Kufuor’s investment advisory council and advised the late president of Zambia, Levy Mwanawasa, on investment promotion. Jonah was also on Kofi Annan’s UN Global Compact Advisory Council. Three years ago he helped the president of Togo put together a team that would formulate strategy for the country.
According to his biography, Sam Jonah and the Remaking of Ashanti by Ayowa A. Taylor, Jonah turned down the position of Ghanaian vice president twice.
On June 25, 2003, Jonah received an Honorary Knighthood in recognition of his achievement as an African businessman at St. James’ Palace, in London. Knighthoods conferred to foreign citizens are done so on the advice of the Foreign and Commonwealth Office. They are bestowed on those who have made an important contribution to relations between their country and Britain.
It came from the blue. Jonah took a call from the British high commissioner in Ghana who, after making sure that he had sat down, told him that he had received a call from the British prime minister’s office informing him that Jonah’s name had been put forward for a knighthood. The high commissioner asked Jonah if he would accept the honor, should the Queen approve. The final word came two weeks later, while Jonah was in Guinea. Since Russian President Vladimir Putin was on a state visit on the day of the ceremony, the knighthood was conferred by Prince Charles.
In 2006, Jonah received the Order of the Star of Ghana, the nation’s highest award, and the Commonwealth Business Council Lifetime Achievement Award in 2010.
More recently, Jonah has been appointed—along with 12 other internationally recognized business, academic and public policy leaders—to sit on the newly formed Bank of America Global Advisory Council.
A lifetime away from his days of breaking rock underground, Jonah says: “I saw no barriers. I was determined to get to the highest [level] in anything that I did.”
This sentiment is echoed in his biography where Taylor writes: “Jonah was determined to build a ‘First’ World company, to dispel the unspoken belief that coming from the ‘Third’ World implied that he would be a third-rate businessman.”
Jonah acknowledges the big part that mentorship played in his success and feels that it is important that those that have found success pass down their knowledge and not have the arrogance to think that they did it all on their own. Jonah has, through the years, been approached by those seeking guidance and says that there is nothing more fulfilling.
“You must be humble enough to know what you know and to appreciate what skills you don’t have, and to have a plan.”
Jonah says it’s sad that young people are no longer as keen to serve apprenticeships.
It hasn’t all been smooth sailing for Jonah. In 2008, a conflict of interest arose when Jonah became a non-executive director at Metropolitan Holdings Ltd while on the board of the Standard Bank Group’s Liberty Life. He stepped down after holding the position for a month. Jonah refers to this as the shortest directorship in South Africa and says he failed to see the conflict from the onset as Liberty Life had a separate board to Standard Bank.
Also making it into the news that year were claims of insider trading and the resignation of senior staff in a company chaired by Jonah. Sentula Mining was accused of misdeeds worth R242 million ($29.7 million).
Jonah says he was approached by the family with the controlling interest in a company called Scharrighuisen to become the chairman and shareholder, buying in on concessionary terms, at around R2 ($0.25) a share. Jonah went to distressed shareholders, and some potential ones, and sold them his vision to rebrand Scharrighuisen as a new mining services company to be called Sentula Mining. Jonah Capital and Coronation Capital were the two largest shareholders when they sold some of their shares, at around R21 ($2.60). The combined sales were reported to amount to R680 million ($85.4 million). The share price subsequently fell to around R1 ($0.12) before recovering slightly.
The parties were thought to have had knowledge that the market did not. The Financial Services Board opened up an investigation into the possible insider trading and trading was suspended for a few months. During this time Jonah resigned as chairman of the company but maintains that there was no wrong doing and that they were cleared.
With his focus on the many possibilities the future holds Jonah’s Iron Mineral Beneficiation Services (IMBS) is using industry changing technology for processing super scrap, metallic iron, from the waste dump at Phalaborwa Mining Company, in South Africa’s Limpopo Province. The super scrap replaces traditional scrap in steel making.
Jonah says that when he told Lakshmi Mittal, of ArcelorMittal—the world’s largest steel making company—the chairman and CEO asked: “Sam, what do you mean? I have 77 PhDs in Chicago and New York looking for this technology, and you’re telling me that two South Africans have found the technology?”
Jonah is proud of the fact that while big companies around the world were writing off lots of money in search of this technology, two South Africans beat them to it. Jonah Capital has the largest stake in the company, with South Africa’s Industrial Development Corporation (IDC) and Russian company, OAO Severstal, as partners. The R120 million ($15 million) pilot plant will be up and running by May.
Despite all this success Jonah maintains that he is not a wealthy man and that he is merely comfortable. He has been reported, by African journalists and bloggers, as having a net worth of between $500 and $600 million and has been celebrated as the richest man in Ghana. His worth remains a mystery but Jonah says that he is appalled by the speculation, adding that his father would be upset by people saying such things about him.
“We were not brought up that way,” says Jonah.
Evidence of this is the inscription by Jonah’s father placed on the house he built for his family in 1950. It read: Wobisa wo din enye wo sika, which translates to: They ask about your name, not your money.
“I’d like to be defined more by what I have done, than what I have…” he says.
Jonah says that having earned a monthly salary from the age of 19 until his retirement from AngloGold Ashanti, at 58, and sitting on boards and owning shares, means that he has done well for himself but he denies being the richest man in Ghana.
Jonah may not be pleased by some of the reporting about him, but what pleases him is the way business is going on the continent.
“Africa is all about entrepreneurship,” he says.
Jonah feels that people are now being given the space to grow, that businessmen like Aliko Dangote, Mike Adenuga and Patrice Motsepe, are world-class.
Jonah is also adamant that the world’s attitude towards Africa has changed. He feels that Africa’s potential is now being appreciated and harnessed, which, he says, is coming on the back of political and social change.
The world’s eyes and markets were on South Africa when the Lonmin mine workers’ strike in Marikana turned violent. As the longest serving director of Lonrho, Jonah doesn’t want to weigh in too heavily on the matter but points out that there are philosophical differences in the style of management and his own, influenced by his time underground.
“I came to appreciate the roles of these people [miners], how backbreaking the job was, how hardworking they were, how committed they were,” says Jonah.
He believes there will always be a future in mining as long as there’s a demand but that miners’ living conditions are shocking and that South Africa needs to focus more on the social aspect of the business.
Jonah has enough thoughts to fill a book but jokes about not being literate enough to write it.
Jonah does, however, have a more relaxed side. The jet-setting entrepreneur enjoys fishing. His eyes light up as he talks about it. He took up golf once again, four years ago. It brought back memories of a battle around the golf course nearly 40 years earlier. Jonah challenged the exclusively white Obuasi Golf Club, where he was not welcome. He was determined to learn the game and when none of the other members would teach him he went to the caddies. After 10 lessons, no-one wanted to play with him. Jonah used to go early to the golf course and play slowly, deliberately, to irk the white golfers backed up behind him. It worked and eventually the invitations to play grudgingly arrived. On the other side of the coin, some of his fellow Ghanaians couldn’t see the victory and sneered that Jonah now thought he was white.
It is no surprise that decades later his children tease him about becoming obsessive about his hobbies. When Jonah discovered squash, playing twice a day was not enough so he built a court at his home. When he took to the gym, he was there every morning at 5AM and then built himself one.
You could have guessed that buying a parrot in Guinea would lead to an aviary being built back home. It is now filled with a collection of parrots from South Africa, Ghana and Brazil.
An avid reader and big fan of Rudyard Kipling, Jonah recommends the poem If.
In a speech to inspire leadership Jonah closed with an extract from Henry Wadsworth Longfellow’s A Psalm of Life: “Lives of great men remind us that we can make our own lives sublime and departing we can leave our footprints in the sands of time.”
At the very least, Jonah proves that if you can keep your head while others are losing theirs and blaming it on you… you can be a man, my son.

THE MAN  WITH THE  GOLDEN TOUCH

Umuntu ngumuntu ngabantu—this age-old Zulu proverb explains the spirit of ubuntu; translated it reads “A person is a person through others” but many paraphrase it to “I am because we are”.
You’ll find Ubuntu in any close-knit community where neighbors help each other with anything from sharing sugar and bread to babysitting and mourning. Ubuntu in business is called philanthropy. The Latin origins of the word means the love of humankind; the desire to promote the welfare of others, mostly, through the generous donation of money to good causes.
In a historic press event in a plush Sandton hotel in Johannesburg, South Africa’s richest black man, Patrice Motsepe announced that he and his wife, Precious, would donate half of their family fortune to philanthropic causes during their lifetime and beyond.
The room was full, from clergymen and traditional leaders to South African businesses’ top brass as well as ministers and union leaders. Among them were Pamodzi CEO, Ndaba Ntsele; Jessica Motaung, daughter of Kaizer Chiefs FC owner Kaizer Motaung; chairman of Shell SA, Bonang Mohale; Zulu nation Monarch, King Goodwill Zwelithini; basic education minister, Angie Motshekga and Archbishop Tutu’s daughters to name a few.
<div id="attachment_7" style="width: 209px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-7" class="size-medium wp-image-7" src="/wp-content/uploads/2017/03/280-261_1-199x300.jpg" alt="" width="199" height="300" />Patrice Motsepe, Johannesburg; 19 August 2011 &#8211; Photo by Brett Eloff</div>
“We want to build a track record where ordinary South Africans feel we’re making a humble contribution,” says the 8th richest African.
He assured the audience that he would make sure his children continued the tradition.
The move put the Motsepes on a list of elites who have pledged to give a majority of their wealth to philanthropy. They are the first Africans to join the Giving Pledge, founded by Bill Gates and Warren Buffett in 2010. Today, it has nearly 100 members including New York mayor, Michael Bloomberg; world-famous designer, Diane von Furstenberg; Facebook founder, Mark Zuckerberg and PayPal co-founder, Elon Musk.
Is this pledge a new trend in business or just an age-old tradition of ubuntu under a new light?
This is not the Motsepes’ first contribution, in 1999 they started the Motsepe Foundation, which to date has donated around R40-R50 million ($4.5-5.6 million) to business development. Last year alone they gave R20 million ($2.3 million) to major churches in South Africa. They say this move is just an acceleration of what they’ve established.
While the Motsepes have had a lucky turn of fortune, it wasn’t always that way.
“There were times when we had nothing… When I came back from America we had so many loans that we couldn’t pay our children’s school fees [and] we had to send them to good schools. But there was always belief because we come from parents who succeeded during the years when there was no black economic empowerment,” says Motsepe.
But many ask themselves whether other African entrepreneurs and companies will follow in Motsepe’s footsteps.
Philip Fauré, head of Citadel Philanthropy Advisors, says there are many wealthy entrepreneurs who are philanthropists but prefer to remain under the radar.
“Africans are more private than Americans,” says Fauré.
He also says that they avoid requests for money and security risks by doing things privately. However, he is quick to emphasize the difference between philanthropy and charity by using a fishing analogy—philanthropy is teaching one how to fish.
“Charity is never going to go away; aid is not the solution,” says Fauré.
He also says that philanthropy is a major industry worldwide, mostly in the States. He hopes that more prominent South African families will give publically.
There are a number of other African billionaires who are active philanthropists.
In 2012 alone, Johann Rupert, the third richest African and CEO of luxury goods group Richemont, gave his R3.6 million ($406,700) annual salary to charity. The Oppenheimers—the second richest family in Africa—donated R1 billion ($112.9 million) to support education in South Africa. In Nigeria, Africa’s richest man, Aliko Dangote, gave away around $35 million and Zenith Bank founder, Jim Ovia, gave away an estimated $6.6 million. And Zimbabwe’s richest man, Strive Masiyiwa, gave away around $6.4 million.
According to wealth management company Galileo Capital, if Motsepe plans to give away half of his wealth—bearing in mind his current net worth of $2.65 billion, interest and inflation—he will give away around $40 million annually to his philanthropic missions.

To Earn Is Human;  To Give Divine

Virtually all that stuff has to be dug out of the ground. Mined. Then manufactured, transported, sold and consumed.
First, it has to be found, where it hides, mostly deep underground. So, exploration companies with their massive machines, technology, geologists, agronomists, hydrologists, geophysicists and acoustical engineers flock to the Mining Indaba at Africa’s Southern tip. As do prospectors, who tell exploration companies where to look.
Then come the investigative drillers, reserve definers, junior miners and risk assessors, metals analysers, remote camp builders and computer software writers. Feeding at the edges, as always, are the lawyers.  Next come those who do actual mine construction. Here, the big boys get involved: banks, investors, partners, governments, fund managers, engineers, employment agencies. Lawyers move in. And we still have nothing tangible, nothing yet taken out of the ground to feed metals and minerals to a hungry populace.
<div id="attachment_1586" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1586" class="size-medium wp-image-1586" src="/wp-content/uploads/2013/03/Minister_Shabangu-300x200.jpg" alt="" width="300" height="200" />Minister, Susan Shabangu</div>
Once gold, copper, coal, iron ore, bauxite and a hundred other elements surface from undergound, a new breed of people get involved, until the cars, jewellery, electricity or cellphone gets the stuff into consumer hands.
The extracted total of mining production is worth two trillion dollars, putting the worth of the whole industry and associated ones at about $2,000 trillion.
The Indaba itself? Probably worth $20 million. And its value to Cape Town? Ten times that.
There are 3,000 listed exploration and mining companies, half of them in Canada. The three deepest mines are in South Africa. Coal is easily the most valuable mined commodity, with 7,700 million tons a year worth an annual $693 billion. The next three are iron (2,000 million tons worth $238 billion), gold (257,000 tons worth $132 billion) and copper (16 million tons worth $122 billion). All these numbers from Chris Hinde of IntierraRMG, who ran “A three-hour PhD in Mining” at the 2013 Indaba.
Besides the 7,532 people registered for this year’s event, there were around that number again hanging around, often in suites near the venue, organising meetings with those who are registered.
One top chief executive of a mining company told me: “I don’t bother to go in anymore, otherwise I have to say ‘hi’ to a lot of people instead of just talking to the ones I need to meet. I take a room and get investors to see me privately.”
In the Cape Town International Convention Centre (CTICC) itself are hordes of people in black suits and red ties, anxious looking if they need money, urbane if they are investors or lawyers. Milling about, chatting, drinking, eating and of course networking.
Oh, and there are speeches as well. As a fraction of total delegates, the audience for scheduled addresses seldom exceeds half, which is still close to 4,000 listeners in the hall. Yet the talks are fascinating, especially the women this year. South Africa’s minister of mines, Susan Shabangu, tried to allay investors’ fears about real nationalization but failed to convince them that creeping resource nationalization in the form of taxes, labor laws, fees, licences, community demands and union demands were not a threat to investment. One mine owner muttered: “We’ve already been nationalized, we just didn’t notice it…”
Anglo American CEO, Cynthia Carroll, responded by telling the minister and her Cabinet colleagues: “Mining companies need to work in partnership with their employees and trade unions, to move on from conflict and to build positive relationships for the future. Partnership between business and government is also critical, particularly in ensuring that development objectives and initiatives are aligned. Partnership is essential. But it isn’t easy. Partnership is about dialogue—not monologue. It requires listening as well as talking. And above all it requires understanding and acceptance. Companies need to understand that in a vibrant democracy there will always be a lively political debate, in which not all the views expressed will be to the liking of business. In return, governments and political parties need to accept that business has an important role to play and a legitimate voice that deserves to be heard. Business is a partner, not a pariah.”
The third tough woman speaker was Mamphela Ramphele, who told delegates to be patient when asked if she was creating a new political party.
Her substantive address damned the current government by saying, to a ripple of laughter: “For the most, mining tax revenues vanish in the black hole that is the central fiscus and end up funding large rural estates for presidents.”
She took the audience on a tour of the key issues needing frank discussion if a viable and sustainable future for mining is to be forged. How do you build a mine to best share the resource? How do you deal with legacy issues to enable co-ownership of risk and reward? What needs to change to create sustainable economies and socio-political systems?
There were many speakers, each with platinum-plated wisdom to convey. It can get too much, so I took a tour of the 400 stalls in the exhibition center, mostly manned by Australians—who love Cape Town, seem to despise their government and see Africa as the future of mining globally.  Every single one told me they were happy to be at the Indaba ($12,500 per stand), would be back next year, and did not expect to do business but were there to collect leads for future business.
Jonathan Moore, MD of the Mining Indaba, said because it attracted investors and mining chief executives, it should probably not grow to be very much bigger as quality could suffer.
“It was started by a bright female entrepreneur, Sandy Lawrence, who realized when SA came out of apartheid there would be an opportunity. The first one only had about 200 people, but after it grew bigger she sold it to a private equity firm who held it for about five years, and Summit Business Media, based mostly in New York, bought it in 2007. She thought the intent of the event should be to drive foreign dollars into African mining.”
It has certainly done that.
“I bring 15 people from the USA but employ locals for PR, tech, IT, printing, signage, transport, bags, building stands, some 50 to 60 temps, security. We fill hotels, flights, restaurants, the CTICC, taxis, shops.”
“The CTICC is world-class, as are the staff. Everyone is happy to have it in Cape Town, and the city benefits big time. The world is still waking up to what this continent of Africa has to offer. The Indaba has moved in unison with that awakening and in a few decades things will be very different from now. We haven’t come close to tapping Africa’s mining resource.”
Levels of optimism are high, despite Marikana and the platinum recession. New finds everywhere, all bigger, better, richer, higher grade. Only the Australians seem unhappy, probably because they have to return to a depressed economy coupled with boring politicians.
Africa is on the move. Most of the stuff that has to be dug out of the ground, metals and minerals and increasingly oil and the gas, will come from Africa. Those who will reap the rewards of doing that are the people who people the corridors of the Mining Indaba. It is simply one of the world’s most successful conferences.

Digging For Profits

It has been another wounding month for Africa’s biggest mining industry that it is likely to take years to recover from, despite efforts by unions and mine owners to heal the rift.
Tens of thousands of mine workers spent the month marching and protesting in wildcat strikes, across South Africa, for more pay. There were so many, it was difficult to keep track.
<div id="attachment_1349" style="width: 210px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1349" class="size-medium wp-image-1349" src="/wp-content/uploads/2017/04/AV_00024554-200x300.jpg" alt="" width="200" height="300" />CARLETONVILLE, SOUTH AFRICA ñ SEPTEMBER 11: Disgruntled mine workers gather to be addressed by expelled ANC Youth League President Julius Malema at Gold Fields Mine on September 11, 2012 in Carletonville, South Africa. The South African Defence Force has been put on high alert following Malemaís visits to various mines in the country. (Photo by Gallo Images / Sowetan / Antonio Muchave)</div>
Fifteen thousand workers were on strike at Gold Fields, stopping production at KDC Mine, in Carletonville 79km west of Johannesburg; hundreds of workers downed tools at ferrochrome miner Samancor; thousands went on strike at AngloGold Ashanti’s operations, 80% of Anglo Platinum’s workforce stayed away and at Aquarius Platinum a mob of 200 illegal strikers forced their way into the mine and threw petrol bombs.
On October 8, the head of Aquarius, the ebullient Stuart Murray, became the third platinum CEO to resign this year.
At least three people died in October in South Africa’s mines and 20 were injured. Police, soldiers and union leaders struggled to keep control amid the tension of nearly three months of wildcat stoppages that would have been unthinkable five years ago when the mines were booming.
Economists talked of the danger of drifting into recession as the losses piled up. By the second week of October, Gold Fields had lost at least 35,000oz of gold from its KDC Mine, while Angloplats, the world’s largest platinum producer, had lost 67,000oz and revenue estimated at R1.1 billion ($125.8 million).
Mines have been closing shafts, cutting costs and firing staff as the losses have grown. Twelve thousand workers lost their jobs at AngloPlats on October 8; at Gold One—where a strike began on October 1—1,435 of 1,900 employees were fired at its Ezulwini Operation and at Bokoni Mine, in Limpopo, 2,000 workers lost their jobs.
More shafts are likely to close in the next few months, at the cost of even more jobs, according to mining analyst at Cadiz Corporate Solutions, Peter Major.
“In August, when the platinum price was down to 1,400 [dollars], half of the mines in South Africa were losing money. The price may have gone up, but now they have to cope with an unstable workforce. The price is only good if your mine is working and I can see more mining companies closing shafts to try to survive,” says Major.
“I was in a telephone conference with Indian investors this week and they were saying they are avoiding all of the mining and resources stocks here. They only wanted to talk about finance and industrial stocks. It was the worse phone call we have had for years.”
Christo Fourie, the CEO of PCC, South Africa&#8217;s biggest quantity surveyors and consultants to mining capital projects, agrees that there is likely to be long-term uncertainty in the industry.
&#8220;A lot of people are concerned right now. We have had a lot of projects put on hold or cancelled,&#8221; he says.
While the mining industry fretted over its future, the custodians of its once robust wage negotiations tried to put the wildcat strike genie back into the bottle.
Unions and mining companies met at the Chamber of Mines in Johannesburg to agree upon new pay scales for the gold mining industry. They include: doing away with Category 3, as an entry level and adjusting all newcomers’ pay up to Category 4; an allowance for rock drill operators; a new category for locomotive, loader, winch and water jet operators and adjustments to pay to preserve the integrity of the current job grading framework.
&#8220;It is critical that all the parties show leadership in restoring stability to the mining industry and bringing an end to the unprotected industrial action that is besetting the industry,” says Elize Strydom, the chief negotiator for the Chamber of Mines.
<div id="attachment_1346" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1346" class="size-medium wp-image-1346" src="/wp-content/uploads/2017/04/ED_0016111-300x199.jpg" alt="" width="300" height="199" />CARLETONVILLE, SOUTH AFRICA ñ SEPTEMBER 13: Gold miners gather at Gold Fields KDC West Mine under the watch of police members on September 13, 2012 in Carletonville, South Africa. Miners have embarked on an illegal strike to air their labour grievances and their unhappiness with the leadership of the National Union of Mineworkers. (Photo by Gallo Images / Dino Lloyd)</div>
The long-term aim is to bring platinum, which has always settled its own pay deals, into the collective bargaining talks in which unions, representing 300,000 gold and coal workers, strike a pay deal every two years with the mining companies through the Chamber of Mines. It is a process that promises certainty and parity for the workers and a chance to plan for costs for the next two years.  Wages make up 50% of mining costs.
The next wage talks are set for June, but talks will have to begin sooner rather than later if they are to bring platinum into the fold. Even then, there are few certainties to comfort the mine owners in the face of an open revolt against low pay.
“Wage talks are not going to do much good, these disputes are all about politics,” says one official from the National Union of Mineworkers.
There are wild whispers doing the rounds that this is an orchestrated grassroots campaign to bring the mines of South Africa to their knees to usher in nationalization, a radical course of action that has all but been abandoned by the government.  Concrete evidence of this is unclear; what is clear is that it is likely to be a bleak Christmas in Africa’s largest mining industry.

It’s Going To Be A Bleak Christmas

South African mining is in tatters after weeks of spreading violence and chaos that has cost R4.5 billion ($544 million) in lost production and threatened many of the country’s erstwhile prosperous mines.
More than 1,000 soldiers have been posted to Marikana and a tight police cordon thrown around the operation.The Lonmin strike has seen one shaft mothballed and 1,200 contract workers sacked.
This is the bitter aftermath of the shootings at the Marikana operations of Lonmin, near Rustenburg north west of Johannesburg, in which 45 people were killed. In the weeks that followed, the wildcat strikes and wage demands spread. It is a sign of dangerous times that Anglo American Platinum (Angloplats) decided to suspend its Rustenburg operations, on September 12, to protect its workers from intimidation—a blow to the international image of South African mining.
“Well, it has been hurt, it has been damaged. You can’t have such a serious incident during a democracy. We have to work towards making sure that we bring back the image and the sanity of the industry,” says Susan Shabangu, South Africa’s minister of mineral resources.
Then there were more wage demands at nearby Implats, strikers stopped workers going underground at Royal Bafokeng Platinum, there was a wildcat strike by 15,000 workers at Gold Fields in Carletonville, 79 kilometers west of Johannesburg; at Marikana 28,000 thousand workers refused to go back and marched with weapons as peace talks failed and wage offers were rejected. The workers want a minimum of R12,500-a-month—triple the current wage.
The unions couldn’t call the workers back and the management appeared powerless to dismiss—often a swift way of squashing an illegal strike—for fear of even more unrest.
The biggest upshot of all this is the highly regulated labor relations procedures—which has helped keep the number of mine strikes down over the years—has been bypassed, at best, mocked at worst. In the past, under the eye of independent mediators, the Commission for Conciliation, Mediation and Arbitration, wage demands went through extensive talks and delicate mediation. Only an irrevocable breakdown would lead to a strike certificate and a legal walk out. Even then, at best there would be at most a day or two of posturing on the picket line, or even a last minute deal before a drill was downed.
“They are opening up the entire mining industry to pay demands and illegal strike action, you are not going to be able to control illegal strike action&#8230; My biggest fear is that we are not working towards a long term solution,” says the national spokesman of the National Union of Mineworkers (NUM), Lesiba Seshoka.
The first bitter legacy of Marikana is growing distrust and animosity between workers and management in an industry where the deeper underground you work, the less you get paid.
“Let’s be fair, when CEOs get millions we say nothing, when miners ask for twelve thousand Rand everybody make a noise. The manner the economy is structured doesn’t benefit everyone,” says the president of the Association of Mineworkers and Construction Union (AMCU), Joseph Mathunjwa, on August 31.
During question time in Parliament in Cape Town, on September 13, President Jacob Zuma blamed Lonmin for the unrest at Marikana saying the living conditions in the hostels left a lot to be desired and the company should have built family homes instead.
“Lonmin acknowledges that living conditions are not ideal but it is working towards better living conditions. We accept the criticism, but improving living conditions is a long process,” says Lonmin spokeswoman Sue Vey.
The second legacy of Marikana will be higher costs for mining companies, at a time when they can ill afford it, as workers appear to have proved they can ask for more wages when they want. In mining, most pay negotiations are run, in an orderly fashion, through the Chamber of Mines every two years. Gold and coal miners do this; there are proposals to bring platinum into these pay talks, but it may be too late.
Peter Major, a mining analyst with Cadiz Corporate Solutions, who has studied South African mining for more than 30 years, believes costs in platinum mining are likely to soar.
“Profit margins have fallen from 50%, a few years ago, to 10% now, quite simply the industry is running out of rope… We are getting to a point where people won’t be able to make money even at these platinum prices&#8230; It is terrifying, costs have been going up around 20% a year and these wage demands are likely to send these costs soaring even higher,” says Major.
In the angry chaos of South Africa’s mine, costs may prove the least of its problems.

The Jewel In The Dirt

The African National Congress (ANC) policy conference, held in Midrand at the end of June, has finally canned the proposed nationalization of the South African mining industry but mining executives and investors cannot relax just yet.
That’s because it remains as clear as mud: precisely what government intends doing about the far-reaching policy proposals contained in the document known as the State Intervention in the Mining Sector (Sims).
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The outcome is that the pall of uncertainty—which has hung over investors in the mining industry since nationalization was put on the ANC’s official agenda in September 2010, at its national executive meeting in Durban—is going to continue at least until the electoral conference schedule for December.
The reason for this is that Sims makes a number of proposals with far-reaching consequences for the mining industry—platinum miners in particular—with platinum group metals (PGM) being declared “strategic” along with others such as coal and iron ore.
Those proposals involve potential major changes to the way in which the mines are taxed as well as other measures aimed at increasing local beneficiation of certain minerals; greater black economic empowerment (BEE) stakes in mining companies and greater participation by the state in mining through the state-owned mining company (SMC).
The proposals include a Rent Resource Tax (RRT) targeting “windfall” profits which would be levied at a rate of 50% during times when mining companies earn more than a 15% rate of return on their investment.
“Let’s give the ANC leadership credit where it is due. My understanding is that the various fiscal proposals in Sims were not adopted at the conference and have been kicked into touch,” says Peter Leon, a Webber Wentzel legal expert.
“They will now be the subject of further debate between government and the mining industry ahead of the December conference. But the other proposals on beneficiation, the role of the state miner and the increase in BEE stakes in mining companies to 30% were all adopted and are now floating around. That creates more uncertainty which investors do not like, but I would rather have this situation than one where the conference had adopted the fiscal measures proposed in Sims.”
Such uncertainty is toxic to investment in the country’s mining business which typically requires the up-front expenditure of billions in capital projects over a period of years before any returns are made.
Government’s aim—as stated at the head of the Sims document—is to: “Maximize the developmental impact of the People’s Mineral Assets.”
But any regulations imposed which hold back mining development in South Africa will have severe negative impacts on the economy and unemployment if the all-important platinum sector is hit.
The mining industry remains a key component of the South African economy. The most important sector is platinum, which has taken over as the largest employer and biggest earner of foreign exchange, following the decline of the formerly dominant gold sector.
According to South African Chamber of Mines’ statistics, the mining sector spent R484 billion ($58.2 billion) during 2011: R430 billion ($51.7 billion) of which was spent locally with R88.7 billion ($10.67 billion) going to salaries and R47 billion ($5.65 billion) being spent on capital expenditure.
Mining corporate tax payments last year totaled R25.8 billion which amounted to 17.2% of total South African tax receipts.
In 2010, the mining industry employed 498,141 people of which 181,969 worked on platinum mines; gold mining ranking second with a workforce of 157,019.
Despite the development over the past decade of various open-pit operations as well as some shallow, mechanized mines the platinum business remains labor-intensive.
The reason for this is that, as with the country’s gold mines, attempts to apply mechanized mining to deep-level platinum mines have been unsuccessful.
The most notable example was Lonmin which—under previous CEO Brad Mills—tried to implement mechanized mining on some of its shafts. The results were disastrous as costs soared and production dropped.
Mills—who proclaimed himself to be a ‘mechanization zealot’—eventually quit. Most of the operations mechanized have been returned to “conventional” mining systems.
So any setback to the platinum industry is going to have a sharp impact on job levels which is anathema to the ANC—let alone the various unions.
According to the Chamber of Mines, the RRT is “unwelcome and insupportable” because it will impose a significant increase on the industry’s tax burden. It will also have a major detrimental impact on the ability of some mining companies to sustain their operations.
Profits earned in boom times are frequently used to invest in the expansion of existing operations and the construction of new mines.
Stuart Murray, CEO of Aquarius Platinum, spelt it out when I interviewed him last year.
“This is a boom and bust industry. The cycles are getting shorter, the volatility is getting greater and it’s getting harder to get a decent return out of new investments. A platinum mine these days starting out of the blocks probably needs to show a 40% gross margin. That kind of margin may appear obscenely high to someone who makes fridges but it’s not. You need it to cover the risks involved in a project in which you have to sink capital over a 10 year period,” he says.
Aquarius has been the worst hit by the current downturn in the platinum sector, which has forced it to close three of its mines. Other juniors such as Eastern Platinum have delayed expansion programs.
A potentially major development still pending is the outcome of the operational review being carried out at Anglo American Platinum (Amplats): the world’s biggest platinum producer.
Anglo American in its submission to the ANC over Sims said, “The Sims proposals will harm the mining industry without necessarily securing its envisaged benefits.”
In Anglo’s opinion, “with the exception of some noted proposals…the Sims report relies fundamentally on the wrong approach to achieve some laudable goals.”
Despite all the doom and gloom, various junior start-up miners—such as Lesego Platinum; Nkwe Platinum and Sable Platinum—remain intent on entering the business, on the basis that the platinum game is cyclical and the good times will return.
It remains to be seen what they will do should their perception change to one that the outcome of the Sims negotiations results in a higher risk profile because of lower returns in those good times.
Some observers believe the industry should cut production in the face of the current global oversupply of platinum, which has driven down prices but it’s clear the major producers are reluctant to do so. So far, only mid-tier producer Aquarius has been prepared to “bite the bullet”.
Apart from the industrial relations and political consequences there are major costs involved in shutting shafts as well as material financial risks if overhead costs are not removed completely but, instead, get passed onto the remaining operating shafts threatening their viability.
The other key deciding factor revolves around management’s assessment of how long the bad times may last. Lonmin management made it clear, during a recent media visit, that they were reluctant to shut down shafts if they expected the platinum downturn to last only a year.
Lonmin is currently reviewing its position with an announcement due later this year on whether it will hold back on future planned capital expansions.

The Platinum Problem

Deep in the heart of the hot and dry mining town of Carletonville, west of Johannesburg, is the modest headquarters of a small company trying to move mountains.
Natalie Killassy grew up in Carletonville—the heart of South Africa’s gold mining industry—and knows the often harsh life of mines and miners. Her family have lived there for generations and when she was a child, she often felt the grief of mining accidents. The deep mines of Carletonville burrow down around 4km into the earth and are prone to lethal seismic activity that can bring shafts crashing down.
<div id="attachment_647" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-647" class="size-large wp-image-647" src="/wp-content/uploads/2017/04/CTP2641-1024x632.jpg" alt="" width="474" height="293" />Staff working on the backfill bags in the bag factory</div>
As director of Stitch Wise, Killassy has made a business out of helping to rebuild the shattered lives of injured miners, while at the same time trying to prevent others from suffering the same fate.
Stitch Wise is a safety gear company which makes huge bags that save lives underground. Miners pour backfill—liquid mud created by blasting that solidifies—in the bags. The bags save the cost of transporting waste to the surface, as well as providing a shield against rockfalls underground.
It has taken 16 years to build up Stitch Wise, which sprang from an 18-month study into the world’s deepest gold mines. For the first eight years, the business did not pay dividends as every cent was reinvested.
“We come from humble beginnings where we couldn’t afford forklifts to lift the bags as they surfaced. We only had one sewing machine and today everything is automated,” says Killassy.
Nearly a third of her workers are injured miners who are trained to make the bags and patented safety equipment. The company is 26% owned by its employees through a broad-based black economic empowerment trust.
<div id="attachment_649" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-649" class="size-large wp-image-649" src="/wp-content/uploads/2017/04/CTP2689-680x1024.jpg" alt="" width="474" height="714" />Stitch Wise Director, Natalie Killassy, standing next to her patented bag material</div>
“Businesses are built on people and we need to add value to people’s lives—that helps you build a business. You need to allow them to take ownership, through that you develop pride… Social entrepreneurs are people who do things that touch their hearts,” says the softly spoken Killassy.
The mining companies—AngloGold  Ashanti, Gold Fields and Harmony Gold—have poured money into the idea and Killassy is trying to get companies to spend more on safety.
The company was chosen by Endeavour, an Oppenheimer family funded NGO, and became part of the group in 2004. Endeavour selects promising entrepreneurs, assists them in improving their business models and has so far picked 300 in 25 countries.
“It is quite a rigorous process; they basically panel beat your business and you as an entrepreneur.”
<div id="attachment_650" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-650" class="size-large wp-image-650" src="/wp-content/uploads/2017/04/CTP2724-1024x680.jpg" alt="" width="474" height="315" />Knee and arm pads produced by disabled staff at the safety gear factory</div>
With innovation and experienced mentors backing her, Killassy’s Stitch Wise is setting its sights on the rest of the continent and South America’s Chilean mines.
“Mining is going to be around for a long time and we need to grow with it.”
Killassy grew up in the tough world of mining in Carletonville. She has grown to be as tough in business.

Angel of The Underground

When Daphne Mashile Nkosi woke up one day, she was told by her lawyers that she had been removed as a director and wasn’t even a lowly shareholder of the multi-billion dollar company she had built from scratch, she thought someone was playing a joke on her. A sick joke at that, for not only did Kalahari Resources have billions in the bank, after securing loans to develop a manganese mine, executive chairperson Mashile Nkosi was still in mourning after burying her husband—who was also her business partner—just a few days earlier.
In one of the most bizarre stories in South African business history, Mashile Nkosi’s name, and those of her fellow directors, had been removed from the database of the Department of Trade and Industry’s Companies and Intellectual Property Registration Office. Things were made even more surreal by the fact that the group laying claim to the assets was led by the late Sandile Majali, a dubious character and controversial businessman who was well connected in the upper echelons of the ruling African National Congress. Majali had never been in any way connected to Kalahari, so his move was not preceded by any hostile takeover bid or shareholder revolt, or anything like that.
Mashile Nkosi brought an urgent interdict before the Johannesburg High Court.
Outside court, radio, television and newspapers were all keen to hear her side of the story. But the more she told of her hitherto unknown rise and rise in the mining industry, she says, the more doubts there were about whether she was indeed the real power behind her growing empire.
“I listened to some of the comments. The more I told my story, the more certain people doubted whether these assets belonged to me.”
Rumors and conspiracy theories started flying thick and fast.
“Some were saying nasty things like ‘you send a thief to catch a thief,’” Mashile Nkosi says. “Others thought, ‘she’s either corrupt or slept her way up to the top.’ I said to myself: ‘what did you expect? You got into a man’s world and changed the course of history. You have to go through this pain to make your gains. Stay focused.’”
About a month after the filing of the interdict, the court ruled in favor of Mashile Nkosi. Majali was arrested for fraud, and was also asked to pay Mashile Nkosi’s legal costs.
Mashile Nkosi’s foray into the male-dominated and often dangerous world of mining started long before the 2010 corporate hijacking incident.
In 1999, as a community development activist leading a women’s rights NGO at the time, she was invited by current Exxaro CEO Sipho Nkosi (no relation to her or her late husband) to form part of the Eyesizwe consortium that was to bid for four South African collieries belonging to multinationals Anglo American and BHP Billiton.
“Sipho said he wanted a very strong structure,” Mashile Nkosi remembers. “We put the structure together, went for presentations to Anglo and BHP, and got the business.”
As soon as she was in on the Eyesizwe deal—she is still a shareholder and serves on its board and those of its subsidiaries—she started being courted by other consortia. She soon discovered that many of these syndicates just wanted women “tag alongs” so that they could show that they had women in their midst.
“The men would have their own discussions and reserve 3-4% for women. I sat back and thought, ‘it’s not going to help if all I do is just scream and shout. What is it that I need to do?’
I decided to look for an opportunity that I would start from scratch, control and own, and be the one who would bring in the men.”
In 2001, the relatively unknown Mashile Nkosi applied to the government for manganese prospecting rights. She got them four years later.
Together with her husband, Dan Nkosi, they raised R12.5 million for a pre-feasibility study that confirmed the existence of manganese in the Kuruman area of the Northern Cape province of South Africa.
The following year state financier, the Independent Development Corporation (IDC), granted the company R60 million to do a feasibility study.
Once the feasibility study was successfully completed, the IDC took 20% of Kalahari, and the two entities began to search for a strategic equity partner. After receiving expressions of interest from 19 companies from all over the world, they chose Arcelor Mittal. The world’s leading steel producer now owns 50% of Kalagadi Manganese, Mashile Nkosi’s Kalahari Resources has 40%, and the rest (10%) is owned by the IDC.
Kalagadi is sitting on just under a billion tons of manganese, a commodity tipped for rapid growth in South Africa. The manganese in South Africa is of high quality, with low carbon, making it sought after by steel makers. The country holds a quarter of the world market and its manganese mines are found in the Kalahari Basin in the Northern Cape. Analysts are saying it is likely to be a boom year for manganese this year.
The Kalagadi project includes a R4.2 billion smelter that will be based at the Coega industrial development zone in the South African coastal city of Port Elizabeth. The smelter is part of an R11 billion project that includes a mine and sinter plant.
By June, Mashile Nkosi says, the company should start producing three million tons of manganese ore, 1.7 million tons of beneficiated sinter, all to be shipped to the Coega smelter for beneficiation.
While the journey has not been easy—water and electricity supply problems meant Kalagadi had to buy generators and truck in water while it negotiated with state utilities—the project is already helping to revive the local economy.
The mine employs 1,600 people, while a further 1,600 are employed by sub-contractors who are engaged in a variety of services ranging from laundry and food to engineering and other specialized services. The water pipeline currently being installed, as well as the tarred roads being erected, will assist farmers and the community.
“The difference between me and other people is not that I’m intelligent. I put in extra hours. I push. I work very hard. And as long as I am making a difference, I’m happy. When you see Africa on CNN or the BBC, it’s hungry kids with flies on their mouths. We should be using our minerals to build our countries, to build our continent. Not what some people do—get a license and then sell it to Australians or Europeans.”
Mashile Nkosi’s life has been lived through breaking rules, banishing stereotypes and confounding expectations. The youngest of four children, two boys and two girls, she says she was always different.
Growing up in the former gold rush town of Pilgrim’s Rest, in Mpumalanga, where she was born, she was inspired by her grandmother, who brought up 13 grandchildren single-handedly from proceeds of traditional brew, cakes and everything else she could lay her hands on.
When she was four or five and taken to Johannesburg to join her biological parents, she learnt just how tough and unfair life could be when she saw how her “never satisfied” father treated her “beautiful” mother—“like a second class citizen, even though she did so much for him.” Mashile Nkosi was incensed. “I told myself I will never be abused in a relationship. So in my choice of people I would later go out with, I was clear that I would never be abused.”
Any man who thought he would abuse her would have had to think twice anyway, for when she was younger she was always her “weak” older brother’s keeper, fighting for him against other boys and beating the male species in their own game.
You could argue, in mining, she is doing the same.

How The Feisty Queen Of Manganese Lost Her Crown

As a multitude of the wealthy and powerful of the mining world rubbed shoulders in Cape Town, the picture emerged of what this year holds for the industry in Africa.
<div id="attachment_434" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-434" class="size-large wp-image-434" src="/wp-content/uploads/2017/04/6830715115_459e9c16cd_o-1024x683.jpg" alt="" width="474" height="316" />Jonathan Moore, MD of Mining Indaba; Michael Katz, the chairman of ENS (Edward Nathan Sonnenbergs); Martin Kingston, executive deputy chairman of NM Rothschild’s local bank franchise and Trevor Manuel, Minister in the Presidency for the National Planning Commission at the Mining Indaba on Monday, February 6, 2012</div>
Mining represents 50% of total merchant exports in Africa south of the Sahara, says the World Bank.
From the scores of presentations, briefings and conversations it is clear that investors are still jumpy about the world economy and Eurozone contagion; they are nervous about resource nationalism—that is, people wanting a greater share of their country’s mineral wealth—and are wary of new mining regulations. The ruling African National Congress in South Africa proposes new taxes on mineral rights in South Africa, plus a windfall tax for returns over 22%.
Although South Africa’s former Finance Minister and now National Planning Minister, Trevor Manuel, conceded during the Indaba that “in the main the government has failed”, saying “we haven’t managed this process well”, he thinks the new tax proposals that were now being considered were a “sensible taxation” whose proceeds will be invested into broader development as the commodities boom was not poised to last forever.
As for beneficiation, which a lot of people thought would help create and sustain jobs, the minister thought it was a double-edged sword. Often beneficiation needed energy and capital that locals did not have.
“Nationalization is not a smart strategy,” Manual concluded.
<img loading="lazy" decoding="async" class="alignleft size-large wp-image-433" src="/wp-content/uploads/2017/04/6830713659_56e40368fb_o-1024x683.jpg" alt="" width="474" height="316" />
Zambia Chamber of Mines head, Frederick Bantubonse, thought there were lessons other African countries could learn from his country, which nationalized mining for 30 years.
Before nationalization in 1973, Zambia produced over 700,000 tons of copper, says Bantubonse. When it rolled back the nationalization program about 10 years ago, the country was producing a mere 257,000 tons. It has now gone back to the pre-nationalization production levels.
But now indigenous business people are finding it difficult to enter the industry because of the big capital investment needed.
It was small comfort that the investors’ nightmares of nationalization appeared to be put to bed by public utterances by the powerful at the conference.
“This whole nationalization story is going to be difficult to wash off. Investors won’t put another dollar into South Africa, they would sooner invest in gold in Eritrea,” says one disgruntled delegate.
Robert Besseling, senior Africa forecaster for Exclusive Analysis, said: “Gold in SA is over. It is too deep and expensive to get out of the ground and there are higher taxes on the way. Power is also a problem and the national power generator, Eskom, is warning that from April there could be new power cuts.”
“The growth of South African mining is going to be in platinum, coal and manganese, but when you bring up the idea of nationalization… the mid-level investors from Australia and Canada I have spoken to here have extreme worries.”
Rajat Kohli, the global head of mining and metals for Standard Bank, believes the Chinese will be among the main actors in resources in Africa and these worries may pass them by.
“I think they have a long-term view; the Chinese plan 10 to 20 years ahead so they do not share the same sort of short-term fears as western investors,” says Kohli.
Africa will continue to be vulnerable to market volatility, but the continent is poised to ride the storm, says World Bank operations officer, Miria Pigato. Favorable commodity prices were only one reason she felt that way.
“This confidence also comes from governments’ more sensible fiscal policies, more accountability, new ways of doing business, a new breed of younger and energetic leaders,” says Pigato.
Another cause for optimism at this mining gathering was the numbers.  In the dark days of the 2009 recession, a mere 3,200 delegates turned up in Cape Town. In 2010, the numbers improved slightly to 4,400 and this year, there were 7,000 delegates.
The organizers are encouraged enough to take the risk of expanding the Mining Indaba to Asia to take advantage of the growing interest in mining in the region.
Jonathan Moore, the managing director of the Mining Indaba, said around 500 delegates were expected to arrive at the first Asian gathering at Marina Bay Sands in Singapore on October 29.
Asked whether the name Indaba—which is an African word for gathering—will be understood in Asia, Moore says: “People there may not know what the word means, but they will know what the

The Trouble With  Mining In Africa

The chief executive of Randgold Resources, Mark Bristow, is no corporate cypher in a pinstriped suit, making decisions from afar. “I don’t believe in big offices and bureaucracies,” says the man whose company has no head office—just an operating center in the Malian capital of Bamako. With the spirit of a true entrepreneur, he likes to be on the ground and appears to relish difficult conditions.
<div id="attachment_154" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-154" class="size-large wp-image-154" src="/wp-content/uploads/2011/11/279-42-683x1024.jpg" alt="" width="474" height="711" />Mark Bristow, CEO of Randgold Resources. Johannesburg, 18 August 2011 &#8211; Photo by Brett Eloff.</div>
And from the start, following the incorporation of Randgold Resources in 1995, the acquisition of BHP Mali in 1996 and the London Stock Exchange listing in 1997, Bristow set a cracking pace. Three operations were built in just 10 years: Morila in Mali; Loulo, a four-mine complex (also in Mali); and Tongon in Côte d’Ivoire. This period also saw the confirmation of a new discovery at Massawa in Senegal and the acquisition of a 45% interest in the Kibali project in the DRC.
Bristow may have raised the eyebrows and increased the pulse rate of investors along the way, but the story of the rapid rise of Randgold Resources cannot be gainsaid, and those who have kept the faith have been rewarded amply. In the 10 years to 2009, the company was the best performing stock in the STOXX600 Europe Index, recording a stellar rise of 4,776%. In the five years to 2010, basic earnings per share increased by 63%, from $0.70 to $1.14, and dividend payments went up by 100%. In the past three years, net profits have increased by 157%, from $47 million in 2008 to $120.6 million in 2010.
Conventional wisdom would have had the odds stacked against Randgold Resources from the start. The intention was that the company would confine itself to gold, so there was no possibility of spreading risk by mining other minerals. It was driven by explorers whose only experience
Was of deep-level mining in South Africa. At the time that it needed to fund the development of its mine, Randgold Resources had no revenue-producing operations and the gold price was at an all-time low. Finally, the assets of Randgold Resources were all in Africa—not everyone’s idea of a safe investment haven. Yet this Pan-African pure gold player is on the blue chip FTSE 100 and its stock trades at a premium to the market. Bristow recalls the early days of the company. “We were attracted to Africa beyond South Africa after the postcolonial era of nationalism, socialism and nepotism. These ‘isms’ had preserved Africa’s natural resources, gold in particular. We had no money but a lot of ambition,” he says.
Randgold Resources added to its already substantial holdings in the prospective region of West Africa in 1996 with the buy-out of BHP in Mali, gaining a collection of exploration tenements and the less-than-desirable (as it turned out) Syama mine. The turning point came the next year when the world-class Morila deposit was discovered. He views the establishment of this mine as his company’s greatest achievement to date.
“We had a stressed balance sheet and we had to persuade the bank to lend us 100% of the money to develop the deposit. This was at a time when the gold price had gone from $400/oz to $260/oz. We could so easily have lost the company,” he explains. People questioned whether Randgold Resources had the expertise to build a mine. These critics were silenced when Morila (including the construction of a 30 power station) was completed on time and on budget. The first gold was poured and a profit was made in the first quarter of operation, and since October 2000, the operation has produced 5.8 million ounces of gold and distributed more than $1.6 billion to stakeholders. “It’s been the most lucrative gold mine in the world in the last two decades,” he notes.
The development of a major mine in Mali, the third-poorest country in Africa, takes some nerve but Bristow, unsurprisingly, does not hold the conventional view that the continent is a difficult place in which to operate. “It’s a fine place to work and it’s not bound by hoity-toity corporate governance janitors. It’s a place for passionate, ambitious people who want to make a difference to other people’s lives,” he says.
His first core belief about doing business in Africa is the importance of establishing relationships. “If you want to invest in Africa, you can’t do it by remote control. You have to build partnerships and to do that, you have to travel. You have to get to know your team. You have to know the political, social and commercial environment of each country.” The holder of a pilot’s license, he usually flies himself to the company’s operations—the trip from Abidjan to Tongon in a Cessna 206 being a particular favorite.
The importance of relationships notwithstanding, Bristow makes no apologies for being uncompromising when necessary. “You can’t be nice all the time. That’s a mistake that many foreign companies make. Africa is not for sissies. We don’t bribe. We stick to our values and we don’t shy away from robust encounters with stakeholders and governments.” The story of Randgold Resources in Côte d’Ivoire illustrates his approach. Before the building of Tongon started, the company had talks with the government. In a nutshell, the message was: “We’ll come and invest, but you need to keep us safe.” That said, many would question the decision to do business in a country that was split between government and rebel forces after the 2002-04 civil war and was later divided between supporters of Alassane Ouattara, the winner of the presidential elections held at the end of 2010, and Laurent Gbagbo, the former president who refused to step down.
Bristow’s response is interesting. He says that Côte d’Ivoire has a “deeper institution” or regulatory framework than most African countries. “At all times, that institution has reinforced our deal and respected our contracts.” He admits that things became very difficult at the end of 2010. “We had to deal with social unrest and people wanted to steal,” he says. However, the mine did not arm its security forces even though there was one ton of gold piled up in the safe. “We made it clear [to both factions] that we would not be used as a political football. The response of both governments was to ensure security for the operation and the community. They kept their word.”
This gave him the confidence to continue. “Other companies withdrew their expatriates. At no stage did we feel that we needed to pull people out. Our view was that ifit became too dangerous, we’d close the mine altogether,” he says. They never had to make that decision.
He concedes that the circumstances were highly complex. “We were in the middle of a conflict area under UN watch. We’ve had to manage in a social and political environment that has been turned on its head: the good guys became the bad guys and vice versa. We’ve built relationships and we talk to everyone.” These partnerships are the key to the company’s ability to operate in this type of situation and they are the nub of what separates his company from many others on the continent. It starts with a commitment to using local businesses. Apart from the difference that this makes to the economy, it makes good sense because these businessmen can open doors to government contacts and it means that the company is viewed as “local” rather than “foreign”. Since the commercial ventures in the surroundings are benefiting from the operation, it is less likely that people will interfere in its running and more likely that locals will defend it from attacks.
Bristow is scathing about the “comfort blankets” that so many foreign mining companies “drag with them” when they come to Africa. “They bring service providers, logistical support, security personnel and contractors from around the world and they build a perimeter wall around their business.” By adopting this approach, they make no real difference to the economy of the country.
That brings us to his second core belief: that if a companymines gold assets in Africa, it is beholden to create value for all stakeholders. “You don’t own the mine; you rent it. The country only begins to benefit when you start construction,” he notes, adding that the real benefits only start when profits are made and taxes are paid.
He says any one of the Randgold Resources’ mines consumes goods to the value of $10 million to $15 million a month. “If you can cycle such costs in the local economy, can you imagine what you do to that economy?” he asks. In preparation for the start of mining at Kibali, 400 kilometers of roads in the north-east DRC have been opened up. “For the first time since 1955, a bus was driven from Uganda to Doko in the DRC in August last year,” he says.
Locals are already feeling the benefits of these developments with the cost of living having fallen by 50%. He is confident that the new operation, with estimated reserves of 10 million ounces, will be a “big engine” for growth in that part of the country. Expected to be one of the largest mines on the continent, it is anticipated that first gold will be poured by the end of 2013.
The biggest sing single risk for Africa, in his view, is thepressure of poverty. His message to the anti-mining lobby and the “greenies” is that this is more destructive to the planet than everything else put together. “Poor people don’t care about rules and regulations; they just want to survive for the day. That’s why they’ll chop down the last tree. Lift them out of poverty then they’ll start looking after the environment.” And he has no doubt whatsoever that the way to liberate Africa is to create jobs. Since 1995, Randgold Resources has directly created 9,000 jobs and, at full operation, he expects Kibali to employ about 3,000 to 4,000 people.
The Randgold Resources philosophy is that local people are employed wherever possible and not only at junior levels. There is only one expatriate on the management team at Morila and local people make up well over half of the team at Loulo. He is impatient with people who hold the view that Africans cannot deliver and perform at the highest executive levels. “There are plenty of highly skilled Africans.
If you are prepared to invest in people, they are here. We’ve just been on an employment drive to the southern DRC and we had people queuing up,” he says. He makes the point that in countries like Mali and the DRC, the intellectual elite is to be found in mining.
Bristow, who holds a PhD in geology—his thesis was on the “esoteric” topic of chrome seams in the Bushveld Complex—from the University of Natal in South Africa, says he did not set out to be successful. The circumstances in which he found himself helped. So did the fact that he likes winning, loves making a difference and enjoys working in a team. Above all, he really believes in Africa and its people. “It’s got to be the place to be in the next 10 years,” he says.

Mine Building Maverick

How do you come back from this? You’ve lost the life savings of scores of poor people who trusted you; the company that was the key to your fortune has abandoned you; your dream of building a mining empire is in tatters and you are broke. What do you do? Go back to the office and go to sleep? Surely not. Tim Tebeila was used to hardship. He was born, the third of seven children, to a laborer in the remote village of Sekhukhune, in Limpopo, in the north of South Africa. From an early age, he walked barefoot through the mountains to school—15 kilometers each way.
“It was very tough. In winter you had to wake up at four o’clock andevery day you were still late. I was lashed for being late every day for two years,” says Tebeila. As he grew up, Tebeila hustled a living selling apples on the streets. “I think entrepreneurs are born, they are not made. It is a talent, like being a soccer player, but you have to nurture that talent.” To make his life even more complicated, Tebeila was drawn into politics and became one of the leaders in the South African Youth Congress. At nights, often he would sleep in the mountains near his home to avoid arrest.
At the dawn of democracy in South Africa, in 1994, Tebeila decided to quit his job to chase his dream of becoming a mining magnate and set up a company, Sekoko Resources. In those days there were very few black entrepreneurs in mining. “My dream was always to own a mine. My dream was to build a conglomerate similar to that of Anglo American. My belief was very simple; when the Oppenheimer family startedAnglo American they started the same way I did. Not by buying other companies, but getting their ownrights and developing them.”
Getting these mining rights proved a nightmare a million miles from the dream. Tebeila was turned down 10 times, and every time he rolled onto the couch in his Polokwane o­ffice and wept. In 2002, he used his last R100,000 ($13,500) to pay consultants in pursuit of yet another mining right. He found out too late that the money was non-refundable and ended up losing both the rights and the cash.
In 2004, he identified the asset he felt could make his fortune and prayed for better luck. Soutpansberg was an estimated 200 million tons of metallurgical coal, under 11 farms, covering 8,000 hectares, near Mussina on his home soil of Limpopo. On April 19, 2005, the government granted Tebeila a license for the site and he was set to chance his arm with consultants yet again. The bigger problem was that Tebeila did not have any money left to explore and the banks were refusing to lend. He needed R1.5 million ($195,000) for exploration and struck on the idea—as was fashionable in latter years of black economic empowerment—of gathering the money from the people who lived in the villages near where he grew up.
So on a crisp winter’s morning near Bela Bela, in the heart of the country’s northern Waterberg coalfields, hundreds of curious villagers gathered to hear what their brother planned to do in return for their life savings. “I remember it was a very cold day and I had a stomach problem… There were many people there that day, old people, disabled people and even chiefs from the community. I told them I needed their money and could make them all rich,” says Tebeila.
The next day, a blind woman shuffled into Tebeila’s offi­ce and handed over R15,000 ($1,950) in cash—her life savings. “This touched me a lot and it showed belief in the project. The chiefs followed and they represented the community. My feeling was at least we have got people who are backing my dreams and people who believe in my dreams. After all the long stress of turned down applications, this was going to be it.” Full of hope, Tebeila paid R600,000 ($78,000) to a firm of geological consultants and R900,000 ($117,250) to drillers to explore for coal at Soutpansberg. Little did Tebeila know that his worst day—like the coal itself—was lurking just beneath the surface.
The alarm bells started ringing when Tebeila spent weeks chasing up the paperwork from the consultants. To his horror, he found out that the consulting firm—which had been riven by strife—had dissolved almost overnight. To make matters worse, the geologist had fled to Australia with the exploration report under his arm. It meant Tebeila was mired in a project without information, money or hope; where he was landed with being the geologist, lawyer, environmentalist and engineer of a “I couldn’t phone a blind person, who had given her last money, to tell her that I had lost everything.”
“I felt I was down and I would notwake up. I felt really bad. This was my second loss. I got that money out of struggle and it had gone. I was very down, but I never thought of quitting. Every time I had hardship, I always went and slept in my office. I went back and slept on my couch. I slept for four hours. I do this because it is both meditation and praying for an answer. I woke up with the solution.”
The answer lay in a laboratory in nearby Witbank. Because Tebeila was hands-on during the exploration he knew the laboratory used by the consultants and the people who worked there. He sped to Witbank, more in hope than expectation.
In Witbank, lady luck at last cracked a smile on the Soutpansberg coal project. The laboratory was able to salvage two pages of exploration data for Tebeila. Luckily, the two pages contained the all-important drilling data. A lifeline for the coal mine; for Tebeila these flimsy pages were manna from heaven.
The struggle was far from over. Tebeila spent five months trying to sell the idea of a coal mine with his two pages in hand. There was a glimmer of hope when the Brazilian resources giant, Vale—the driving force behind Mozambique’s mighty Moatize coal project—showed interest, but there was a language barrier. Vale needed to send the proposals to Brazil for translation into Portuguese, but this was going to take months and Tebeila neither had the time nor the money.
<h3>What did he learn?</h3>
“I think I have learned the art of perseverance and how it works. I learned to persevere no matter what. I learned to stick to my dreams. I want to build a new Anglo American and I am doing that.”
At last, the sun broke through the clouds for Soutpansberg. Tebeila got a phone call, while he was driving, from Coal of Africa— an established player in the South African industry.
“Coal of Africa made me an off­er to purchase 74% of the assets for R70 million ($9.1 million). They also pledged to spending R100 million ($13 million) to take the project to a bankable feasibility study. “It’s the biggest deal I have ever closed on a cellphone while I was driving. The following day, they signed. Two years later, they o­ffered me R20 million ($2.6 million) for the remaining 26% and gave me the capital to finance my present project, Waterburg Colliery, which will mine up to 15 million tons of coal-a-year by 2019.” Sekoko Resources survived it all, diversified into iron ore, and is set to reach turnover of R10 billion a year ($1.3 billion) by 2019. And what of the people who handed over their last bundles of cash way back in 2005? “They got their dividends. They got all their money back and they made 300% back on what they gave. Some built houses out of that money. I felt very proud,” says Tebeila. So, coal’s well that ends well.

Two Flimsy Pages – The Difference Between Disaster And Fortune

Carletonville, 60km west of Johannesburg, is a town teeming with miners, but on this day there are none to be seen. The reason: a gold miners’ strike over pay for the first time in more than six years.
<img loading="lazy" decoding="async" class="alignleft size-large wp-image-106" src="/wp-content/uploads/2017/04/MINES-2_011-1024x682.jpg" alt="" width="474" height="316" />
It is a strike that cost the gold mining industry 15,900 ounces of gold production a day, meaning losses of $23 million daily, according to Kobus Nel, a mining analyst at Stanlib in Johannesburg. The strike will dent the share prices of South Africa’s largest gold miners: AngloGold Ashanti, Gold Fields and Harmony. The reason—one of the most fractious rounds of pay talks in South African mining history. The negotiations, held every two years, are crucial for planning for the industry as wages make up more than half of mining costs.
The gold companies thought they were going to have an easy ride this year with inflation at around 5%. The employers hoped to settle swiftly for between 8 and 9% and many labour analysts agreed. Employers were, however, flabbergasted in May when the National Union of Mineworkers (NUM)—the most powerful union in the land—asked for 14% and a package of costly demands. The employers calculated that these demands translated to an effective 25% increase in costs. Elize Strydom, the chief negotiator for the employers, described the demands as “disappointing and distressing”.
An opening offer of 4% was rejected with disdain by unions. To complicate matters further, the gold companies were divided. AngloGold Ashanti and Gold Fields were happy to raise the offer, while Harmony, with its old and marginal shafts, stuck to a lower offer. The unions in South Africa are on a mission, encouraged by a record high gold price, to close the wage gap between the lowest paid, toiling with shovels, and the highest paid, sitting in boardrooms. “These employers have rested on their laurels for too long—we want 14%, or we will strike,” said Lesiba Seshoka, the national spokesman for the NUM. It all boiled down to a deadlock at an offer between 8 and 9% on July 25, followed by an all-out gold strike three days later.
On the day, AngloGold Ashanti and Harmony were down about 3%, closing at R281.11 and R91.19 respectively. “If the strike lasts a week, the loss of production will represent 6.5% of quarterly production, quite a hit on the industry,” said Nel.
Surprisingly, Gold Fields closed flat at R103.50. Nel said Gold Fields may have been unscathed because it had already been aggressively sold o‑ due to its exposure to Peru where there was a threat of an increase in taxes. With stock markets forward looking, much of the negative impact of the strike had already been priced into the shares .Also on the day, investors were jittery about the European debt crisis and the political brinkmanship playing out in the United States over the great debt limit saga. These fears kept investors buying gold, pushing the price to record highs. Nel expects  the  gold  price  to  rise  and  rise  in  the months  to  come.  He  sees  it  peaking  at  $1,677  per  troy ounce  in  the  first  quarter of 2012.
AngloGold Ashanti, Gold  Fields  and  Harmony  the  day after  the  commencement  of  the  strike  were  relatively  flat closing  at  R281.00,  R103.60  and  R90.75  respectively. All  in  all,  the  last  week  in  July  proved  an  expensive one  for  South  Africa’s  three  gold  giants  and  their shareholders.

Tag: Mining

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