Mining Weekly

Mining major Anglo American chairperson Stuart Chambers and CEO Duncan Wanblad have both expressed disappointment with the company’s financial results for 2023, which were released on February 22. Chambers opened the presentation of the company’s results by candidly describing the company’s performance as "poor" owing to various factors including significant headwinds in platinum group metal (PGM) prices and diamond prices and volumes.

Eskom insists the performance of its unreliable generation fleet is on an improving trajectory, releasing a graphic-heavy statement on February 22 disputing a recent report stating that its performance continued “going backwards”. The statement, which was published only hours after loadshedding was ramped up to Stage 4, also asserts the decline in the generation fleet’s energy availability factor (EAF), which has fallen consistently for the past six years, has been arrested.

Posco Future M Co, which produces battery materials for companies including General Motors Co, is preparing to import graphite from Africa to reduce its dependence on supplies from China. “Graphite is the most troubling part when making batteries,” CEO Kim Jun-hyung told reporters on Thursday. “We are importing 100% of natural graphite from China. But we are planning to bring natural graphite from Africa, such as Madagascar, and process it in South Korea.”

JSE- and NYSE-listed Gold Fields has declared a total dividend of R7.45 a share for the year ended December 31, with $703-million in attributable profit having been generated. The attributable profit amounts to $0.79 apiece, compared with profit of $711-million, or $0.80 apiece, in the prior year. 

JSE-listed Harmony Gold's share price rose by more than 5% on February 22 after the company reported that its earnings per share (EPS) for the six months ended December 31, 2023, were likely to increase by more than 100% year-on-year to between R9.37 and R9.76 in rand terms and between $0.50 and $0.52 in dollar terms. That compares with the EPS of R2.98, or $0.17, reported for the six months ended December 31, 2022.

Finance Minister Enoch Godongwana maintained focus on fiscal discipline and balancing the need to address socioeconomic challenges facing the country, industry organisation the Minerals Council South Africa said in response to the Minister’s Budget speech on February 21. South Africa, however, needs faster growth of private and public sector fixed investment, and rapid implementation of deep structural reforms to allow the private sector to participate in key areas of the economy, it stressed.

The board of Rio Tinto has given the nod to the Simandou iron-ore project, in Guinea, CEO Jakob Stausholm has revealed. The approval is contingent on meeting outstanding conditions, including securing approvals from joint venture partners and obtaining regulatory nods from China and Guinea.

With various commodity prices taking a nosedive over the past year, windfall tax gains from high commodity prices over the preceding two years have come to an end, resulting in a sharp fall in mining tax revenue, National Treasury has said. In the 2024 Budget Review released on February 21, it was revealed that, for the first 10 months of the 2023/24 fiscal year, provisional corporate tax collections from the mining sector fell by R39.2-billion or 50.4% year-on-year.

The Portfolio Committee on Defence and Military Veterans has claimed that the deployment of the South African National Defence Force (SANDF) in support of the South African Police Service to counter illegal mining at an estimated cost of R492-million is currently unfunded as of November last year. In the 2024 Budget Review, released on February 21, the committee said that this deployment remained unfunded owing to no funds being allocated in the 2023 adjusted estimates.

The South African government is proposing to reduce its planned allocations to Eskom under a previously announced R254-billion debt-relief package by R2-billion a year for the 2023/24 and 2024/25 periods, owing to the utility’s failure to dispose of the Eskom Finance Company (EFC) by the agreed timeframe of March 31, 2024. Allocations of R78-billion in 2023/24 and R66 billion were announced previously.

Finance Minister Enoch Godongwana unveiled a far-reaching reform in relation to government’s treatment of the Gold and Foreign Exchange Contingency Reserve Account (GFECRA), which will result in R150-billion in drawdowns from the account over the coming three years to reduce government borrowings. The settlements will be in three tranches, including R100-billion in 2024/25 and R25-billion apiece in the subsequent two financial years, and the proceeds will help reduce government’s gross borrowing requirement from R553.1-billion in 2023/24 to R428.5-billion in 2026/27.

Multinational mining and metals processing group Sibanye-Stillwater has incurred impairments of $2.58-billion, or about R47.45-billion, for the 2023 financial year, on the back of the deterioration in metals prices and certain operational factors. In a trading update ahead of the March 5 publication of its full results for the year, CEO Neal Froneman said 2023 was a challenging year as a result of a steep decline in the prices of most commodities the group produces, with the notable exception of gold.

Global mining company Glencore has recommended a $0.13 a share, or $1.6-billion, base cash distribution to shareholders for the 2023 financial year, comprising $1-billion from marketing cash flows and the balance from industrial attributable cash flows. This is despite a 50% year-on-year decrease in the group’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) to $17.1-billion.

Canada-headquartered Lucara Diamond Corp, which owns and operates the Karowe mine, in Botswana, expects its revenues to rebound to between $220-million and $250-million this year, after a "challenging" market in 2023 resulted in revenues of only $177.4-million, compared with the $212.9-million in revenue generated in 2022. "Changes in global economic conditions, consumer demand, geopolitical events and industry-specific dynamics resulted in a challenging market in 2023, with reduced demand and downward pressure on both polished and rough diamond pricing, especially in the smaller size classes," the company states.

The biggest port in Mozambique that’s become a key hub for global chrome exports will upgrade a railway link, bolstering a planned $2-billion capacity expansion. The African Development Bank is financing the purchase of $40-million of locomotives and wagons and another $30-million is under consideration from the Development Bank of Southern Africa for improvements on the line that connects the Port of Maputo with South Africa, according to the AfDB. The DBSA declined to comment.

Diversified mining major Rio Tinto CEO Jakob Stausholm on Wednesday reported “resilient” financial results for 2023, with free cash flow of $7.7-billion and underlying earnings of $11.8-billion. Balance sheet strength enabled Rio Tinto to invest with disciple, while also playing an ordinary dividend of $7.1-billion, which equated to a 60% payout, he said.

Canada-headquartered First Quantum Minerals, which is facing a major challenge with the closure of its flagship Panama mine, is making progress with its balance sheet initiatives. These include, among others, selling some of the copper miner's smaller assets and minority stakes in its larger assets, as well as a $500-million arrangement with its second-biggest shareholder, reported CEO Tristan Pascall.

Canadian miner First Quantum Minerals is re-shuffling top-tier personnel at its Zambian operations in a bid to tackle production and safety shortfalls in the South African country, an internal memo seen by Reuters showed. The latest action comes as the company continues to deal with fallout from the sudden closure order of its flagship Panama mine late last year. FQM has lost more than half its market value since public protests against the Cobre Panama project started in October.

Anglo American subsidiary Kumba Iron Ore delivered solid operational and financial results for the year ended December 31, 2023, despite macroeconomic challenges; however, about 490 jobs could be at risk owing to a proposed reconfiguration to mitigate the logistics challenge, CEO Mpumi Zikalala said on February 20. “Macroeconomic volatility and uncertainty continued to weigh on global markets with geopolitical tension escalating and persistent cost inflation amidst multi-year-high interest rates. Domestically, businesses were further impacted by loadshedding and logistics constraints, increasing the cost of doing business in South Africa,” she explained.

JSE-listed Aveng, which recently relocated is management epicentre to Australia and changed its reporting currency from South African rands to Australian dollars, has no immediate intention of listing in Australia but acknowledges that such a move is possible in future. Incoming CEO Scott Cummins, the Australian civil engineer who succeeds South African Sean Flanagan on March 1, reiterated that governance and control of Aveng will continue to be in South Africa, where it will remain listed on the JSE.