Ed Stoddard http://blogs.reuters.com/ed-stoddard Ed Stoddard's Profile Mon, 09 Nov 2015 15:45:21 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.5 ANC may pay as drought withers black South African farmers’ dreams http://www.reuters.com/article/2015/11/09/safrica-drought-idUSL8N1313OE20151109?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/11/09/anc-may-pay-as-drought-withers-black-south-african-farmers-dreams/#comments Mon, 09 Nov 2015 15:08:21 +0000 http://blogs.reuters.com/ed-stoddard/?p=1025 AMAJUBA, South Africa, Nov 9 (Reuters) – Cattle are the
traditional asset by which Nampie Motloung, a subsistence black
South African farmer, has long measured his wealth. But a
blistering drought has made them a liability.

“I have no choice but to sell some of my cows. I must do it
before they die,” Motloung, 62, told Reuters as his 30-strong
herd ambled in the distance across the parched landscape.

“It pains me to do so. My cattle are my family’s
inheritance,” he said.

The wealth of small-scale farmers and the dreams of emerging
black commercial farmers are evaporating as South Africa’s worst
drought since the end of apartheid rule in 1994 scorches the
land.

The state’s response could be politically crucial. The
ruling African National Congress (ANC) government relies heavily
on rural areas and local elections loom next year.

KwaZulu Natal province, an ANC stronghold where Motloung
resides and the Zulu heartland where President Jacob Zuma hails
from, is one of the worst affected.

It has already been declared a disaster for water shortages,
which will allow it to access some of the 364 million rand ($26
million) the National Treasury has allocated this financial year
for immediate disaster relief.

Driving through the rolling hills of the province’s Amajuba
district reveals a stark landscape, the green foliage of hardy
thorn trees unfolding over brown and withered fields.

Along one dusty road, a Reuters crew saw a dying cow stuck
in the hardening mud, its head beneath the wire of a fence where
it had tried to get a last drink from a vanishing puddle.

SELL OR STARVE

After drought last year cut South Africa’s staple maize crop
by a third, a powerful El Nino weather pattern – which typically
heralds poor rains for the region – is forecast to persist for
most of the summer and perhaps extend into the autumn.

South African livestock farmers were urged by the government
last week to cut herd sizes as sizzling temperatures suck
moisture from pastures, leaving them without the grass or
nutrients to accommodate numbers that in some cases have been
built up for decades as a store of family wealth.

Commercial agriculture is also affected, including new black
farmers who have benefited from a government drive to redress
the racial imbalances of the past by buying white-owned farms
for redistribution to Africans.

Critics say many of the transferred farms have failed as
new-comers lack capital and skills. But there have been success
stories, notably in KwaZulu Natal.

Analysts say if some of them start failing because of the
drought it could erode the ANC’s rural base.

“Some of the medium-sized farmers in KwaZulu Natal have been
a success story and so it would be quite a blow to the party if
they failed now even if it doesn’t seem fair because it is
weather-related,” said political analyst Nic Borain.

Talent Cele, an affable 27-year-old Zulu with a
self-proclaimed passion for working the land, is one of the new
black farmers who is desperate for rain.

The almost 600-hectare farm he manages – formerly
white-owned, being worked by a black cooperative – is bleeding
its cattle in a vicious cycle.

“I have to sell cattle to buy feed because we have been
advised to reduce the numbers. But feed is expensive and I also
want to plant maize to feed the cows but I cannot. It is too
dry,” he told Reuters.

Yellow maize, used mostly for animal feed, has been
hitting year highs above 3,000 rand a tonne, according to
Thomson Reuters’ data, because of the weather.

Cele has been selling 25 cattle a month, bringing his herd
size to 225 from around 350. The average price for a good animal
has also fallen to 6,000 rand from 10,000.

PERFECT STORM

The ANC’s political problems are also rooted in its
perceived failure to deliver basic services such as water and
decent roads to many black communities, a situation that has
given rise to regular riots by frustrated residents.

Decaying infrastructure in water utilities has also become
glaringly apparent recently, raising the risk of shortages.

By contrast, in parts of rural KwaZulu Natal the ANC has
delivered admirably, solidifying its political support in the
Zulu countryside. But its remaining shortcomings there may be
amplified by the drought.

“It’s a perfect storm for the ANC as the evidence of the
state of the water supply and a natural catastrophe converge,”
said Borain.

Back at Motloung’s plot, he complains that his family must
fetch water hundreds of metres (yards) away from a pump at
Cele’s farm. And his dam has dried up, so his cattle have to be
watered laboriously by hand.

“I have gone to the local council but they have done
nothing,” he said.

($1 = 14.1445 rand)

(Additional reporting by Siyabonga Sishi; Editing by James
Macharia and Susan Thomas)

]]>
http://blogs.reuters.com/ed-stoddard/2015/11/09/anc-may-pay-as-drought-withers-black-south-african-farmers-dreams/feed/ 0
African vultures targeted by poachers, headed for extinction -report http://www.reuters.com/article/2015/10/29/africa-vultures-idUSL8N12S44J20151029?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/10/29/african-vultures-targeted-by-poachers-headed-for-extinction-report/#comments Thu, 29 Oct 2015 00:01:01 +0000 http://blogs.reuters.com/ed-stoddard/?p=1023 CAPE TOWN, Oct 29 (Reuters) – Africa’s vultures are
vanishing, according to a report released on Thursday, a
situation that could affect human health and livestock since
populations of other scavengers such as rats and jackals could
rise as a result.

The assessment, carried out by conservation group BirdLife
International, found that six of Africa’s 11 vulture species
were at risk of extinction.

Deliberate targeting by poachers is one of the reasons as
the birds, which circle the sights where they feed, can alert
authorities to the carcasses of illegally slain animals.

Africa’s elephant and rhino populations are being
relentlessly poached for their ivory and horns to meet red-hot
demand in newly-affluent Asian economies.

“Vultures are important. They come in, they clean up and
they leave,” said Ross Wanless of BirdLife South Africa.

“Other scavengers like rats and jackals will eat a carcass
and then will go after livestock or become a pest to humans. And
if vultures are removed their numbers can increase.”

Vultures also help to stem the spread of disease on the
world’s poorest continent by eating carcasses that would
otherwise rot.

Other reasons behind the decline of the big birds include
indiscriminate poisonings and the popularity of vulture parts
for traditional medicine.

Since the late 1980s, 98 percent of West Africa’s vultures
outside protected nature areas have disappeared, while half the
population of the Gyps vulture species in Kenya’s Masai Mara
park have gone, the report said. In South Africa, cape vultures
have declined by 60-70 percent over the past 20-30 years.

The assessment was conducted for the International Union for
Conservation of Nature’s (IUCN) “Red List of Threatened
Species”, which is considered to be the most authoritative
estimate of wild bird and animal populations.

(Editing by Mark Heinrich)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/29/african-vultures-targeted-by-poachers-headed-for-extinction-report/feed/ 0
Tullow delays Uganda oilfield sanction to early 2017 http://www.reuters.com/article/2015/10/27/africa-oil-tullow-idUSL8N12R2E520151027?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/10/27/tullow-delays-uganda-oilfield-sanction-to-early-2017/#comments Tue, 27 Oct 2015 14:24:50 +0000 http://blogs.reuters.com/ed-stoddard/?p=1021 CAPE TOWN, Oct 27 (Reuters) – Britain’s Tullow Oil
plans to take a final investment decision (FID) on a new
oilfield project in Uganda in early 2017, later than planned,
Chief Executive Aidan Heavey told Reuters on Tuesday.

Tullow discovered oil in the East African country in 2006
and had planned to make an FID on its oilfield by the end of
2016.

“You need a pipeline route firmed down and then you need to
get FID. So FID probably in early 2017 and then three years
later, you would have first oil,” Heavey said at the Africa Oil
Week conference organised by Global Pacific & Partners.

He added Tullow expected to obtain a production licence this
year in Uganda and to start oil output there in 2020.

The pipeline route to move oil from landlocked Uganda to the
Indian Ocean has not yet been determined.

Uganda has been pushing for an earlier production date
around 2018, citing work by other investors. But previous
targets have slipped.

“If Tullow is talking of 2020, that’s their business,” said
Ugandan Energy Ministry spokesman Bukenya-Matovu Yusuf. “CNOOC
which has a production licence has been doing a lot of work
toward production and our 2018 target still stands.”

China’s CNOOC is also investing in Uganda,
alongside France’s Total.

Crucial to any investment decision will be the decision on a
route for an export pipeline out of the land-locked nation.

A proposed northern Kenyan route has raised security
concerns as it lies near war-torn Somalia. Total has said it is
considering a pipeline through Tanzania.

(Additional reporting by Elias Biryabarema in Kampala; Editing
by James Macharia and Karolin Schaps)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/27/tullow-delays-uganda-oilfield-sanction-to-early-2017/feed/ 0
Platinum fails to fill breach left by gold in South Africa http://www.reuters.com/article/2015/10/21/safrica-mining-platinum-idUSL8N12K35420151021?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/10/21/platinum-fails-to-fill-breach-left-by-gold-in-south-africa/#comments Wed, 21 Oct 2015 13:54:37 +0000 http://blogs.reuters.com/ed-stoddard/?p=1019 BRITS, South Africa, Oct 21 (Reuters) – When South African
miner Papi Soke went from gold to platinum, he thought he was
trading a sunset industry for one with a brighter future.

This month, the National Union of Mineworkers (NUM) shop
steward was one of over 800 workers laid off at the Eland
platinum mine, closed by Glencore.

“I don’t know what to do now. I am thinking of maybe going
to a diamond mine,” the 34-year-old father of two, whose wife is
expecting in December, told Reuters as he sipped juice in a mall
in the mining town of Brits north of Johannesburg.

Glencore is not alone. Platinum producers Lonmin and
Anglo American Platinum are also planning to cut jobs
and the government has held meetings with companies and unions
to try and prevent widespread lay-offs.

Impala Platinum is closing operations that will
affect 1,600 jobs but it has said it hopes to absorb many of
those workers elsewhere in its business.

As South Africa’s gold industry – which has produced a third
of the bullion ever mined – began a steady slide in the 1990s,
platinum was expected to fill part of the gap. But platinum’s
prospects are now as dire as that of gold.

The local industry is still recovering from a five-month
strike last year, and an oversupply and low demand has pushed
the price of the metal used in autocatalysts and jewellery down
almost 40 percent from 2014’s peak.

This month it slid to seven-year lows below $900 an ounce on
worries about a drop in demand for diesel cars after carmaker
Volkswagen admitted rigging diesel emissions tests.

Diesel autocatalysts account for 40 percent of global
platinum consumption, so weaker demand for diesel cars will
further hurt the metal’s price. It’s now trading over $1,000,
but is still less than half the $2,290 peak it hit in 2008 and
the outlook remains bleak.

“At current prices, fully 70 percent of the platinum shafts
in South Africa are losing money, across the industry, by our
calculations,” said Implats spokesman Johan Theron.

A Reuters poll last week pegged an average platinum price
forecast for 2016 at $1,105.50 an ounce, 12 percent below the
forecast of a similar poll conducted three months earlier.

Further job losses are certain, a sensitive issue in
Africa’s most advanced economy, where the unemployment rate is
around 25 percent, the mining workforce is restive, and income
disparities are glaring.

The layoffs may prove a serious test for the ruling African
National Congress (ANC) in local elections next year, as it
counts on a declining base for much of its political support.

“The industry is in a tough space and the companies have to
do what’s necessary to ensure they survive,” said Roger Baxter,
the chief executive of South Africa’s Chamber of Mines.

Lonmin said on Wednesday it planned a $400 million rights
issue of new shares, a last-ditch effort by a company on the
brink.

CHANGING FORTUNES

In 1987, according to Chamber of Mines data, there were
almost 554,000 people working in South Africa’s gold sector.
Platinum that year employed around 83,000.

But as the century-old gold mines around Johannesburg
plunged deeper into the earth for lower grade ore, pushing up
costs, the industry began shedding jobs.

Soke’s father was among those.

“He worked in the gold mines for 25 years, but in 1996/97,
when the price went down, he lost his job. I now support him.”

As the fortunes of the industries changed, platinum began
employing more miners, picking up some of the men who lost their
jobs in gold.

In 2006 for the first time, platinum’s employment levels
exceeded gold’s, reaching 168,500 compared to 160,000.

In early 2008, when platinum scaled its record peak of
almost $2,300 an ounce, its premium over gold was $1,257. Gold’s
premium over platinum is now $165.

Soke made the switch in 2008, after five years at a mine run
by Harmony Gold.

“Harmony offered a voluntary retrenchment package and I
switched to platinum to advance my career,” he said.

South Africa sits atop about 80 percent of known reserves of
platinum. The industry still has a larger labour force, but its
numbers peaked in 2008 at almost 200,000. It was 188,400 last
year and will almost certainly decline from here.

In 2014, only Anglo American Platinum among the big
producers had a positive return on equity (ROE) – which measures
a company’s profitability – of 1.2 percent, according to
Thomson Reuters’ data.

Northam Platinum’s was -10.1 percent, Impala
Platinum was at -7.1 percent and Lonmin was -5.7
percent.

In gold, Harmony was -15.1 percent but two of the big gold
producers were positive – Gold Fields was 0.3 percent
and Sibanye Gold was 12.9 percent.

Sibanye, the most profitable bullion producer in South
Africa, offers a bright spot for platinum, having snapped up
Aquarius Platinum and Amplats’ labour intensive assets.

Its chief executive Neal Froneman has said that, with the
right market conditions, he might even expand the workforce.

“I wish an investor would come and invest in Eland,” Soke
said.

(Additional reporting by Clara Denina and Jan Harvey in London;
Editing by James Macharia and Susan Thomas)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/21/platinum-fails-to-fill-breach-left-by-gold-in-south-africa/feed/ 0
Lonmin aims for $400 mln rights issue, proceeds with job cuts plan http://www.reuters.com/article/2015/10/21/lonmin-issue-idUSL8N12L10V20151021?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/10/21/lonmin-aims-for-400-mln-rights-issue-proceeds-with-job-cuts-plan/#comments Wed, 21 Oct 2015 07:01:25 +0000 http://blogs.reuters.com/ed-stoddard/?p=1017 JOHANNESBURG, Oct 21 (Reuters) – Platinum producer Lonmin
plans a $400 million rights issue of new shares
and will proceed with a planned restructuring to cut 6,000 jobs
in the face of depressed prices, it said on Wednesday.

Lonmin also said in a statement it had slashed its capital
expenditure for the year through Sept. 30 to $136 million from
an original target of $250 million.

The company had already said it might trim its workforce by
up to 6,000, including voluntary severance and early retirement
programmes. It said the restructuring is now expected to be
completed by the end of September 2016.

The embattled platinum producer, whose Marikana mine was the
scene of the police slaying of 34 wildcat strikers three years
ago, also said it planned to amend its debt facilities “for a
total of $370 million, maturing in May 2020.”

It said this would be conditional on the raising of $400
million in new equity funding through the rights issue.

“The amended debt facilities will replace the existing debt
facilities commitments which as at 30 September 2015 were
approximately $543 million and which are maturing in May and
June 2016,” it said.

Lonmin’s plans will likely be fraught with difficulties.

The company had to rely on an $800 million rights issue to
shore up its battered balance sheet in November 2012 and
investor sentiment is sour towards platinum and South African
mining.

Lonmin and its peers, reeling from sinking prices and still
recovering from a five-month strike last year, have been dealt a
further blow by the emissions-scandal at Volkswagen.

Platinum fell to seven-year lows this month below
$900 an ounce after the United States accused the German firm of
using software for diesel cars that deceived regulators
measuring emissions.

Also jobs are a sensitive issue in Africa’s most advanced
economy, where the unemployment rate is around 25 percent, the
mining workforce is restive, and income disparities are glaring.

(Editing by David Holmes)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/21/lonmin-aims-for-400-mln-rights-issue-proceeds-with-job-cuts-plan/feed/ 0
Oscar Pistorius to be released on parole on Tuesday http://www.reuters.com/article/2015/10/15/us-safrica-pistorius-parole-idUSKCN0S91H420151015?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/10/15/oscar-pistorius-to-be-released-on-parole-on-tuesday/#comments Thu, 15 Oct 2015 13:50:45 +0000 http://blogs.reuters.com/ed-stoddard/?p=1015 JOHANNESBURG (Reuters) – Oscar Pistorius will be released on parole on Oct. 20, about a year into his five-year sentence for killing his girlfriend Reeva Steenkamp, authorities said.

The department of correctional services said in a statement on Thursday the Olympic and Paralympic track star would be placed under house arrest from Tuesday.

Pistorius is behind bars in the capital, Pretoria, after being convicted in September last year at the end of a seven-month trial.

He was found guilty of culpable homicide, the equivalent of manslaughter, when he fired four shots through a locked toilet door on Feb. 14, 2013, killing model and law graduate Steenkamp.

Pistorius was due to have been freed on parole in August after serving 10 months but Justice Minister Michael Masutha blocked his release, saying the parole hearing had been held prematurely.

The department of correctional services said parole conditions would include him undergoing psychotherapy. Pistorius, a gun lover, will be subject to firearms prohibitions.

Tania Koen, a lawyer for the Steenkamp family which has opposed early parole, told state broadcaster SABC: “Nothing is changed in their lives. Reeva is not coming back.”

At a globally televised trial Pistorius argued that he had mistaken Steenkamp for a burglar.

Prosecutors are appealing the verdict of culpable homicide, arguing it should be one of murder because Pistorius must have known that the person behind the door could be killed. The appeal is due to be heard on Nov. 3.

The state will argue that the trial judge misinterpreted parts of the law and ignored vital evidence. A murder conviction would result in a minimum sentence of 15 years in prison.

A panel of five judges will hear the appeal. They could either reject the prosecution’s appeal, order a retrial or convict Pistorius of murder themselves, legal experts say.

The Paralympic gold medalist, known as “Blade Runner” because of his carbon-fiber prosthetic legs, became one of the biggest names in athletics at the 2012 Olympics when he reached the semi-finals of the 400-metre race against able-bodied athletes.

(Editing by James Macharia and Andrew Roche)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/15/oscar-pistorius-to-be-released-on-parole-on-tuesday/feed/ 0
South African union signs wage deal to end coal strike http://www.reuters.com/article/2015/10/13/safrica-coal-strike-idUSL8N12D2EY20151013?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/10/13/south-african-union-signs-wage-deal-to-end-coal-strike/#comments Tue, 13 Oct 2015 14:14:59 +0000 http://blogs.reuters.com/ed-stoddard/?p=1011 JOHANNESBURG, Oct 13 (Reuters) – South Africa’s National
Union of Mineworkers (NUM) signed a wage deal with coal
producers on Tuesday, ending a strike by the sector’s biggest
union that started over a week ago, workers and mining companies
said.

The strike by around 30,000 NUM members had affected
operations at Exxaro, Glencore, and Anglo
American, and some smaller producers.

South Africa, the continent’s most advanced economy, has
been beset by power shortages, and relies heavily on coal for
most of its electricity. The country also exports large
quantities to Europe and Asia.

“The parties have now concluded an agreement after a lengthy
and dynamic process. It wasn’t easy. All of us had to steer the
ship through the rocky waters,” said Peter Bailey, NUM’s chief
negotiator in the coal sector.

“The parties will now bury the hatchet,” Bailey added.

The deal will see the lowest paid workers receive wage
increases of up to 1,000 rand ($75) per month in the first year,
and another 7.5 percent raise in the second year.

The NUM had initially sought a 50 percent rise for its
lowest paid workers, who make about 6,000 rand ($445) a month in
basic pay, before scaling those back demands.

Higher earning employees will receive increases of between 5
percent and 7.5 percent in both years.

NUM members will return to work tonight, the union said.

However, South Africa’s Association of Mineworkers and
Construction Union (AMCU), which represents less than 1 percent
of South Africa’s coal mining sector workers, rejected the wage
offer, a union official said.

AMCU says 200 of its members went on strike on Oct. 5 at a
small coal operation east of Johannesburg. The Chamber of Mines,
which represents coal producers, however, says that AMCU only
has 83 members at the mine.

(Writing by Joe Brock; Editing by James Macharia and Raissa
Kasolowsky)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/13/south-african-union-signs-wage-deal-to-end-coal-strike/feed/ 0
South Africa court to decide on silicosis class action against gold sector http://uk.reuters.com/article/2015/10/12/uk-safrica-gold-lawsuit-idUKKCN0S61IW20151012?feedType=RSS&feedName=everything&virtualBrandChannel=11708 http://blogs.reuters.com/ed-stoddard/2015/10/12/south-africa-court-to-decide-on-silicosis-class-action-against-gold-sector/#comments Mon, 12 Oct 2015 14:06:46 +0000 http://blogs.reuters.com/ed-stoddard/?p=1009 JOHANNESBURG (Reuters) – A South African court on Monday began two weeks of hearings to determine if gold miners suffering from debilitating lung diseases they say they contracted at work can proceed with a class action lawsuit against the industry.

The stakes are high with miners seeking damages that could amount to billions of rand at a time when South Africa’s gold industry is in a state of steep decline in the face of depressed prices and soaring costs.

The industry is opposed to the lawsuit proceeding as a class action, which would enable plaintiffs to join forces as a “class” as opposed to thousands of individual cases.

Plaintiffs, many from neighbouring countries such as Lesotho, are suing for compensation on the grounds that they contracted silicosis and tuberculosis through neglect.

Working deep underground for years without proper protection, countless South African miners inhaled silica dust from gold-bearing rocks and later contracted silicosis.

A disease which causes shortness of breath, a persistent cough and chest pains, it makes people highly susceptible to tuberculosis, which kills.

“If the court cer­ti­fies the class, the law­suit will pro­ceed as the largest ever class action law­suit in the coun­try and on the con­ti­nent,” the Legal Resources Centre, a human rights group which has joined the case, said in a statement on Monday.

The planned suit, which has little precedent in South African law, has its roots in a landmark ruling by the Constitutional Court in 2011 that for the first time allowed lung-diseased miners to sue their employers for damages.

Attorney Richard Spoor, whose legal battle against a South African asbestos-mining company led to a $100 million settlement in 2003, told Reuters he had signed up more than 30,000 former miners and their dependants for the lawsuit.

Spoor would not be drawn on the specific amount he expects his clients to extract from the industry but said “we are certainly talking billions of rand.”

Another law firm, Abra­hams Kiewitz, has also joined the suit, which targets AngloGold Ashanti, Harmony Gold, Sibanye Gold, Gold Fields, Anglo American, DRDGold, and African Rainbow Minerals.

Industry officials would not comment on the case and the ruling on whether it can proceed as a class action may not be made until next year.

(Editing by James Macharia)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/12/south-africa-court-to-decide-on-silicosis-class-action-against-gold-sector/feed/ 0
Sibanye raises platinum gamble with Aquarius deal http://www.reuters.com/article/2015/10/06/sibanyegold-aquarius-ma-idUSL8N12612R20151006?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/10/06/sibanye-raises-platinum-gamble-with-aquarius-deal/#comments Tue, 06 Oct 2015 12:57:11 +0000 http://blogs.reuters.com/ed-stoddard/?p=1007 JOHANNESBURG, Oct 6 (Reuters) – South Africa’s Sibanye Gold
has offered $294 million to buy Aquarius Platinum
, making its second big bet on a platinum sector
hammered by falling prices and rising costs.

The deal, announced on Tuesday, would put South Africa’s
third-largest gold producer by value into the global top five
producers of platinum group metals with annual output of more
than a million ounces.

It is the second big deal in the sector for Sibanye, which
bought the labour-intensive and costly Rustenburg operations of
Anglo American Platinum last month.

Sibanye, a spin-off of Gold Fields, is capitalising
on a platinum sector shake-up following an unprecedented
five-month strike last year and weakening platinum prices that
have hit profitability and raised costs in much of the industry.

Under the terms of the deal, Sibanye offered 19.5 U.S.
cents, or 2.66 rand, per Aquarius share, a 56 percent and 60.3
percent premium to Monday’s closing prices in Johannesburg and
London respectively. The offer values Aquarius at $294 million.

Aquarius’ shares in Johannesburg soared 40 percent at one
point to 2.48 rand, slightly below the offer price, and was 34
percent higher at 1230 GMT.

The stock was up 37 percent in London. Shares in Sibanye
advanced over 10 percent to 19.74 rand.

The offer is backed by Aquarius’ board but requires
shareholder approval.

In Aquarius, Sibanye would be taking on two low cost and
mechanised mines in South Africa and Zimbabwe, which together
holds the world’s largest platinum reserves.

For Aquarius, the deal would allow its shareholders to exit
the industry whose gloomy outlook was compounded late last month
by disclosures Volkswagen AG falsified U.S. vehicle
emission tests. Platinum was trading at $916.75 an ounce
on Tuesday, having hit a near seven-year low of $888 on Friday.

SHAKING THINGS UP

“Everybody is saying prices cannot stay this low forever.
Sibanye is shaking things up in the sector, they are taking
advantage where everybody is saying there is value but nobody is
doing anything about it,” said Richard Hart, an analyst at
Arqaam Capital.

Sibanye Chief Executive Neal Froneman said he saw no job
cuts on the horizon at his new asset. Lay-offs are
politically-sensitive in South Africa, where unions say up to
22,000 mining jobs are current on the line and the unemployment
rate is over 25 percent.

There are about 1,500 employees at Aquarius’ Mimosa mine in
Zimbabwe and 8,500 at the Kroondal operation in South Africa,
where the hardline Association of Mineworkers and Construction
recently ousted arch rival the National Union of Mineworkers as
the dominant union in the shafts.

Froneman said “we remain on the lookout” for assets but he
did not expect to acquire anything else in the short term with a
focus now on “bedding the new acquisitions down.”

Asked specifically if he wanted to snap up any assets from
rival Harmony Gold, which is battling to stay
profitable, Froneman said he was not interested.

He also said the company remained committed to its policy of
paying a steady dividend of between 25 and 35 percent of
normalised earnings.

Sibanye’s gold assets are older mines that generate good
cash flow even at current prices and because of their age do not
need huge investments, freeing money for shareholders.

The group’s production profile will now be about 60 percent
gold and 40 percent platinum.

HSBC, which was the financial advisor to Sibanye, agreed to
arrange a $300 million acquisition funding package.

($1 = 13.6725 rand)

(Additional reporting Tiisetso Motsoeneng and Zandi Shabalala;
Editing by James Macharia)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/06/sibanye-raises-platinum-gamble-with-aquarius-deal/feed/ 0
S.Africa mine unions divided on wage offers in troubled gold sector http://www.reuters.com/article/2015/10/02/safrica-gold-wages-idUSL5N1220QC20151002?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/ed-stoddard/2015/10/02/s-africa-mine-unions-divided-on-wage-offers-in-troubled-gold-sector/#comments Fri, 02 Oct 2015 12:35:07 +0000 http://blogs.reuters.com/ed-stoddard/?p=1005 JOHANNESBURG, Oct 2 (Reuters) – South Africa’s National
Union of Mineworkers (NUM) said on Friday its members had
accepted the latest pay offer from gold producers covering the
next three years.

“Our members have accepted the offer,” David Sipunzi, NUM’s
general secretary, told Reuters. NUM is the biggest union in the
sector, representing over 50 percent of the industry’s workers.

Two smaller unions which represent mostly skilled workers
have also accepted the offer.

But the Association of Mineworkers and Construction Union
(AMCU), which represents close to 30 percent of workers in the
sector, has not and an industry source said the union had
received a certificate from the government mediator allowing it
to call a strike.

“AMCU has indicated it will go to its members on the issue
of a strike to get their mandate,” the source said. AMCU could
not be immediately reached for comment.

AMCU’s decision not to accept the offer will complicate
matters as Sibanye Gold, one of the four companies
involved in the talks, has said it will only sign the deal if
all the unions agree to it.

Such a scenario could also stoke tensions in a sector that
has seen waves of labour unrest and dozens of deaths in the past
three years in violence rooted in a vicious turf war between
AMCU and NUM.

The offers vary from company to company but will see pay
hikes on the basic wage for the lowest-paid, entry-level members
of up to around 14 percent in the first year.

Including allowances, the deal ensures that entry-level,
underground employees will receive guaranteed pay of between
13,728 rand and 14,611 rand per month in the third year.

This would equate to increases for the entire package by the
third year of between 26.5 percent and 32 percent.

The other companies involved are AngloGold Ashanti,
Harmony Gold, and Evander Gold, a unit of Pan African
Resources.

They made it clear that they could not afford big hikes as
they grapple with depressed prices and soaring costs in the
world’s deepest mines.

South Africa has produced a third of the gold ever mined but
the industry is in a state of accelerating decline.

According to the Chamber of Mines, costs between 2008 and
2014 rose on average by over 20 percent per year. Production
over the past decade has declined by almost 8 percent annually.

(Reporting by Ed Stoddard; Editing by James Macharia and Susan
Thomas)

]]>
http://blogs.reuters.com/ed-stoddard/2015/10/02/s-africa-mine-unions-divided-on-wage-offers-in-troubled-gold-sector/feed/ 0