|
|
|
|
|
|
| ||||
Transnet fails to stop the bleedin... Mobutu's men live the high life in SA... 'Anomalies' thwart effective affirmativ... From candle-making to compute... Buyers' market in second-hand cars... Hot new leisure zone taking shap... Advisers beware: negligence will boomera... Growth expected in SA marke... New niche finance group open... SADC slams SA trade policie... SADC countries clear way for dual listin... Liberty Life takes the bull by the horn... Imagination not what exploited workers a... Technology is the key to succes... Pragmatic mining houses discover the val... |
Pragmatic mining houses discover the value of marriageLooks at the changing face of the industry in South Africa BY THE end of this year, South Africa's mining industry will differ radically from only a few years ago. The changes began in 1992 when the moribund Rand Mines was semi-unbundled into a gold and a coal arm. The coal arm soon went to Gencor's Trans-Natal and became Ingwe. The gold arm Randgold struggled for two years until a shareholder coup instigated by London investors resulted in the appointment of a new management team led by Peter Flack. Randgold had four mines at the time: Free State giant Harmony, lease-bound Blyvoor at Carletonville, Durban Roodepoort Deep on the West Rand and East Rand Proprietary Mines. Among the other mining houses, Gencor had a dozen separate mines, Gold Fields of SA had six, JCI three, Anglovaal four and Anglo American six. Until recently, about the closest relationship any mining house had to another was to approve tribute mining over an inaccessible reserve closer to another mine's infrastructure. Yet following an unprecedented period of consolidation and rearrangement of mining leases, the picture looks very different today. The ball began to roll when Randgold's Durban Deep arranged the takeover of independent neighbour Rand Leases, and then of other adjoining mines such as Roodepoort Gold and West Wits. (Incidentally, Rand Leases was a former Anglovaal mine taken over and run by a succession of entrepreneurs during the 1980s and 1990s. It was typical of the mini-boom in small mines during the 1980s - Sub Nigel, Modder B, Southgo, South Roodepoort etc - run by junior miners, but they came to nought, probably because the major mining groups kept the best assets for themselves. ) Then Blyvoor made an offer to GFSA for the contiguous Doornfontein, a proposal which was accepted by shareholders. By early last year, Randgold had grown even bolder and made an offer to Gencor for three of its mines - Grootvlei, Buffelsfontein and Stilfontein - as well as a package of mineral rights which meant that Harmony could buy the now contiguous Unisel from Gencor. Harmony also bought mineral exploration group Lydex, and later bought the Saaiplaas No 3 shaft from Anglo's Freegold. Harmony did not stop there. It opened its own gold refinery and won permission to market directly a third of its production and a jewellery manufacturing business is not out of the question. This year, Harmony made an offer for Grootvlei and Grootvlei's neighbour Consolidated Modderfontein, managed by Loucas Pouroulis's Salene. These offers are now close to being sanctioned and Harmony has become a mini-mining and exploration house in its own right under the leadership of Bernard Swanepoel. Durban Deep has proposed to incorporate Buffels and Blyvoor into another mini- mining group on the northwest arc of the Wits Basin, this one led by Randgold director Roger Kebble. The principle of mineral-rights exchanges was quickly embraced by the other houses, notably Anglo and Gencor, which undertook several important transactions resulting in more sensible entitlement. Gencor's non-listed Weltevreden Mines also went to Anglo's Vaal Reefs. So, free of all its investments other than at Evander and in the Free State, Gencor's Gengold chief executive Tom Dale then consolidated three operating mines Kinross, Winkelhaak and Leslie, and the worked-out Bracken into a single entity, Evander Mines. This gives Gengold two operating regions: Evander, and three mines in the Free State, St Helena, Beatrix and Oryx. If Oryx ever reaches the aspirations of management and shareholders, a merger of Gengold's Free State mines will probably take place. Under the guidance of Rick Menell, the grandson of co-founder Samuel Menell, Anglovaal has effected the most radical change. It consolidated all its gold mines (Harties, Loraine and Eastern Transvaal Consolidated) and Free State exploration sites Sun and Oribi via the Target Exploration vehicle into a single listed entity, Avgold. The balance of its mining interests have been brought together under the Middle Wits umbrella into another quoted vehicle Avmin, which also owns half of Avgold. This month, Gencor sold its Fairview Mines - which had not been considered part of its SA business because of its different ore body and operations - to Avgold as it lies next to ET Cons and will be operated from there. Three years ago, GFSA consolidated the operations of Libanon and Venterspost into the Kloof company - the country's richest mine. GFSA has lately accepted a proposal from Anglo American's Elandsrand to take over neighbouring Deelkraal, which is losing money and requires infrastructure to tap its deeper reserves: Elands offers the best chance for Deelkraal's future. This leaves GFSA with only two local gold mines, Kloof and Driefontein. It also has coal and base metal operations, the desperate Northam platinum mine, and a portfolio of commercial investments it describes as a war chest - assets realisable pending a better opportunity. Driefontein is directly north of Anglo's Western Deep Levels. Kloof is a stone's throw to the east. Anglogold managing director Bobby Godsell has greater plans for the Western Deeps/Elandsrand southerly extension, but technological advances will be required to make the dreams a reality. The original Johnnies was split into three in 1995 - JCI, Anglo American Platinum and Johnnic. Anglo has sold de facto controlling stakes to black empowerment groups and JCI is now chaired by Mzi Khumalo of the African Mining Consortium. JCI has three gold mines - near-neighbours Randfontein and Western Areas on the West Rand and HJ Joel in the southern Free State. It also oversees former independent Lindum Reefs, formed out of a part of the Randfontein lease area. There has been plenty of speculation about merging Joel with Beatrix, particularly when Joel was underperforming. But talks came to nought and Joel is finally looking a little better. Western Areas first split off, then reconstituted, the South Deep mine, whose reserves are expected to endure for 65 years. It could be said that Anglo American started the modern-day consolidation trend in 1986 when it merged its several mines in and around Welkom into Freegold, undoing the complicated holding- company structure later. Anglogold - still the world's most important gold producer - manages the Freegold, Vaal Reefs, Western Deeps and Elandsrand underground mines and dump-retreatment giant Ergo (East Rand Gold & Uranium). Retreatment of the dumps is also undergoing a hefty face-change. Randgold announced the formation of a partnership with independent dump company Knights with the intention of bringing together all the dump retreatment centres and dump owners to optimise the reprocessing of dumps under a "Crown Consolidated Recoveries"-style banner. Randgold hopes to get RMP Properties aboard - one of the major players changing the Johannesburg city horizon. It is not beyond the realms of possibility that Ergo - itself having brought East Dagga and Simmer & Jack into its fold over the years - could co-operate with Randgold to form a Witwatersrand-wide company. From well over 40 quoted mines a decade ago, there will be fewer than 20 listed on the JSE by the end of this year. Outside SA, the mining houses have keenly pursued prospects and three houses have operating mines: Anglo at Sadiola in Mali, Randgold at Syama also in Mali and GFSA at Tarkwa in Ghana. JCI is also in Ghana, and has reached agreement with Australia's Star Mining to develop the Sukhoi Log gold deposit in Russia. Gencor is active in South America, Africa and Indonesia and Avmin has pitched heavily for copper in Zambia. There have been changes at the coal face too. JCI's Tavistock export mines this month bought the coal businesses of Shell SA, including its allocation of the export terminal at Richards Bay. In other developments, Anglo American Coal is to invest jointly with Anglo's offshore arm Minorco in a Chilean coal venture; Gencor's Ingwe bought Coal Mines of Australia a few months ago to establish a foothold in South-East Asia; Avmin is opening two small coal mines in Mpumalanga, and Gold Fields Coal is again investing in production.
|