Zuma Handed The Reins In South Africa

The biggest geopolitical event in the mining world during the 16th trading week was the changing of the guard in South Africa.

• The African National Congress returned to power with a very strong general election win, but this time around with 67-year-old political survivor Jacob Gedleyihlekisa Zuma as president-elect, replacing the unpopular Thabo Mbeki who was ousted as leader last September. A highly divisive figure with the ANC, Zuma will have his hands full after he is officially sworn in on May 9. Against a backdrop of South Africa’s first recession in 17 years, expectations are high for Zuma to deliver improved basic services to poor black South Africans who have grown disaffected after the first 15 years of ANC rule.

In addition to numerous corruption charges (which were dismissed) and a rape trial (where he was found not guilty), Zuma is known in North America for his ebullient singing of the ANC’s “Lethu Mshini Wami” (Bring Me My Machine Gun) song during political rallies. The performance is well worth a YouTube viewing, showing his weird mix of populist warmth and unbending hostility to political opponents. How it will all turn out is anyone’s guess, as Zuma’s real intentions have remained unclear after a campaign where he tried to be all things to all people.

Of more direct interest to miners and investors is the ANC’s plan to set up a state mining firm that would compete with private mining companies. The party has stated that it is not seeking to nationalize mining assets, but may focus the proposed state miner on strategic minerals such as uranium, coal and platinum, and run it in a manner similar to state-owned oil firm PetroSA.

• Miners in Canada were dealt a blow with a federal court ruling that the federal Environment Ministry must collect and report data on the release and transfer of pollutants to waste rock and tailings disposal areas. Data from 2006 onward will now be stored in the publicly available National Pollutant Release Inventory, which has been around since 1993. The application for review was brought forward by the anti-mining environmental groups Great Lakes United and Mining Watch Canada.

Obviously, it’s never been a great mystery to government regulators how much waste rock, ore stockpiles and tailings a mine will produce over its lifetime; the numbers are easily gleaned from widely available technical data.

Rather, the problem here is twofold. Yes, there’s the usual time and money-wasting problem of the federal government sticking its nose deeper into what is constitutionally a provincial jurisdiction, i. e. mining. But far more important is the way anti-mining groups will wield this kind of data as a political club against miners by wildly exaggerating the amount of pollution generated by mining.

Look no further than the U. S., where a similar reporting regime has been in place since 1998. There, the millions of tonnes of waste rock handled each year — which is for the most part wholly benign rock that has been simply picked up and moved a few hundred metres — is routinely described as “toxic pollution” by anti-mining activists.

That’s how the American greenies, as they fundraise aggressively among the caring but credulous, come up with their ridiculous assertions that mining creates, by tonnage, one quarter of all the industrial pollution in the U. S. despite accounting for less than 1% of industrial activity.

• Down Under, there was a resolution in sight for troubled OZ Minerals, the world’s second biggest zinc miner. The Australian government has given the nod to China Minmetals’ offer to buy all of OZ Minerals’ assets for US$1.2 billion, except for several exceptions including the Prominent Hill copper-gold mine and related leases, which are near a sensitive Aussie military installation, and the Martabe gold-silver project in Indonesia.

The next day, OZ struck another deal to sell Martabe for US$211 million in cash to Hong Kong-listed China Sci-Tech Holdings.

Minmetals’ original US$1.8-billion offer for all of OZ in March was rejected by the Australian government owing to national security concerns relating to Prominent Hill, which will now continue to be operated by a publicly traded OZ Minerals.

However, the revised offer compels Minmetals to run the newly acquired Australian mines as separate businesses with genuine commercial objectives and using commodity prices benchmarked to world markets.

And that’s not all: the latest rumour is that OZ CEO Andrew Michelmore may soon depart and join China Minmetals.