We cocked it up says Gordhan

March 7, 2011

I have written often and much about the manner in which the ANC government and their stooges have messed up an industry that could’ve supplied jobs and wealth – things we desperately need but are as scarce as hen’s teeth.

Instead of facilitating investment in a risky industry they, the ANC, did everything in their power to chase potential investors as far away from these as possible. I have in the past years quoted the Fraser Institute Ratings year after year to the mirth of many.

Despite my rants and the warning signals given by departing mining investors, the ANC continued with the policies aimed at driving skills away, make mining difficult with over regulation, making labour unaffordable and making sure that ownership remained under threat with BEE policies and government sponsored piracy.

Today, none other than Pravin Gordhan stood up and admitted, by implication that the ANC government cocked it up. He admitted that we missed the resource bus and he warned that we may do so again. He assured us that Susan Shabangu was putting systems and action plans together to try and remedy the mess created by the ANC.

Having said that, Gordhan must realise that it will take more than nice words and apologies and excuses for him, or anybody else in government, to right this ship. The investor community will not forget all the other promises made and not kept by the ANC in general and the Zuma government in particular. They will not blindly believe the ANC whilst the Malema and his followers are sounding more and more like Mugabe every new day. They will watch and wait until they see the differences; until they see clear signs that Zuma and his band of pirates have changed their ways.


Business the Zuma Way

February 28, 2011

COSATU and NUM are upset about Zuma hijacking the South African Mining industry but the truth is that there is not a damn thing they can do about it. The DMR works for Zuma and the Guptas and consequently the new rulers, unlike the Rand Barons who only had economic power, also have the political power and the right to kill.

Conducting negotiations over mineral rights is not anymore conducted in boardrooms between the prospective partners. Holders of Mineral Rights, wanting to discuss commercial terms must be prepared to do it in dusty township stadiums with the Guptas, a Zuma family member (Duduzane), Lazarus Zim accompanied by heavily armed police, bodyguards and a senior official of the Department of Mineral Resources.  The heat the holder of such a Mineral Right feels during such negotiations has very little to do with the ferocity of the sun…the heat they feel will be present even on a cold and cloudy day.

The DMR do not take steps when Zuma mines pollute our water resources. Aurora, a mine belonging to a Zuma and a Mandela, has been pumping poisonous acid water into our water resources for over a year with the knowledge of the department and they will continue to do so but in future it will be paid for by the citizen.

Employees are shot and killed at Aurora mines and the DMR turns a blind eye. A woman was killed in a mine accident in December 2009, something that will cause a 48 hour or longer stoppage on any other mine with permission to continue normally only given after an in loco inspection. The mine in question was given permission to continue operations without as much as an in loco inspection by an Inspector of Mines.

Employees of Aurora cannot be legally employed by other mines since they do not have medical exit certificates from their previous employer, Aurora, a legal requirement for reemployment. The DMR tells prospective employers to employ these people with a note on their medical files (circumventing the law) yet the DMR won’t issue this instruction/permission in writing. Should the decision of an employer to employ a person based on this flimsy exemption backfires on the prospective employer,  the DMR will wash its hands and the errant employer will become liable under the law for helping the Zuma rejects.

The DMR are openly promoting the interests of Zuma and his Gupta partners, presenting them, Indians arriving in SA in the 1993, as suitable BEE entities certain to smooth the path to the acquisition of prospecting permits and Mining rights. Government sponsored fronting, or perhaps a Zuma fronting for the Guptas? Ironically Shabangu is the minister who, less than a year ago, took white mine bosses to task accusing them of fronting.

The bias of the DMR has been clearly illustrated in the Sishen affair, where not only Anglo American was short shifted, but also a BEE company connected to Baleke Mbete and Tokyo Sexwale.


Rats and sinking ships

February 7, 2011

It is official; BHP Billiton’s announced what I’ve been saying forever. They are divesting their coal prospecting and mineral rights in South Africa, in other words they are getting rid of their future in this country. They did say they will be spending $1.5 billion in streamlining her current mines. That means, in effect they will speed up their mining; get us much of that ore, in which they have already invested billions of dollars, out of the ground as soon as possible whilst the global demand for coal is booming. This strategy is also known as sweating the assets and getting the last drop from the cow.

Those easily fooled by the $1.5 billion investment in the dying cow; rest assured $1.5billion is a drop in the BHP Billiton ocean, you will be interested to learn that even Susan Shabangu has seen through the plan and warned the likes of BHP Billiton not too rape resources in their hast to depart these shores.

In the interest of completeness it may serve us well to take note that 4 years ago BHP saw the writing on the wall and flogged the best, or ,at the worst, the second biggest Chrome and Ferrochrome company in the world, South Africa’s Samancor. They followed that with the sale of all their Diamond interests in South Africa and then during the global crisis they moved South African Aluminium capacity to Brazil.

Unfortunately BHP is not the only one who decided that running is the best thing to do, Rio Tinto has done the same and so has Anglo, they are just not saying it in so many words.


Diamonds aren’t forever – not in SA

January 23, 2011

It was announced that DeBeers, the South African Company that dominated the global Diamond Market for yonks has decided to throw in the towel as far as South Africa is concerned and it was no surprise that they sold their second biggest and one of only two diamond mines remaining in South Africa.

The decision to sell Finsch Mine was an easy one. De Beers, years ago decided to get out of the country. Mining, because of labour (COSATU) and government (ANC) became too expensive and the margins to thin. The risks of tenure and other regulatory uncertainties curtailed exploration and the decision was made to sweat the assets and get out leading to the mass sell-off of mines. The Kimberley mines were the first to go with the BEE-company taking them over, KCM – loosely connected to the Zuma clan – recently suspended from the JSE. The Cullinan mine was taken over by Petra and are barely surviving – albeit at a much smaller scale with considerably fewer people than before – thanks to the find of a typically massive and “lucky” gem; luck that cannot continue for much longer.

Finch Mine does not have the luxury of huge and lucky gems. The mine depends on the mass production of cheap industrial diamonds and small low value gems. Petra no doubt will reduce the size of the mine and scavenge dumps and easily accessible ore of which there is little left. Going deeper will require huge investment, investment DeBeers baulked at for good reasons.

The sad thing is that in 2005/6 Finsch Diamond Mine became one of the most technologically advanced hard rock underground mines in the world; a true pioneer. The technology employed at Finsch was critical in ensuring the viability of sustainable continuing operations.

Because of the South African skills shortage it became increasingly difficult to support the advanced mining technology at Finsch mine and future investments in this technology became just too risky given the deviancy of the Department of Minerals. In the end the selling price of Finsch Mine of $200 million hardly equates to the cost of the Mine Automation Project.

Sadly many of the excellent engineers developed in this process have left South Africa. They work abroad for DeBeers and for the companies involved with DeBeers in the development of the technology.

With Finsch gone, Venetia Mine remains the last Bastion of the erstwhile DeBeers South African Empire, in South Africa – an empire destroyed by transformation. The mine will be retained by DeBeers until the easy resources are exhausted, the assets have been sweated properly upon which it will be flung aside to be used by unscrupulous BEE companies, like KCM, to fleece unsuspecting investors.

Resources are not inexhaustible and for that they must be recovered effectively and investments must be made in finding new resources. In South Africa this cannot be done because of inflated labour costs, ineffective training and education, a government threatening ownership, a ruling party prepared to steal mineral rights for the benefit of a select few in the top party echelons.


The Great Resource Scam

July 6, 2010

We recently witnessed, without to much fanfare and hardly a whisper of gnashing teeth, one of the biggest robberies off, in Malema’s words; “the mineral resources lying below the South African soil”, belonging to the people – in a truly socialist sense – of South Africa. The resources robbed was not diamonds, or indeed platinum and gold; it was lowly iron ore – the feedstock of the ferocious Chinese and Indian industries. The robbers, ironically, was not evil white colonialists neither were the vile Apartheid era oppressors; they were not even mighty imperialist raiders from Europe and North America – no; in this case the robbers were local people; heroes conspiring with new age Moguls to relieve the people of their hard fought wealth.

In this intriguing tale of robbery and deceit a whole chunk of iron ore reserves were stolen from an unsuspecting Kumba iron ore by master of deceit Jagdish Parekh – agent of the Gupta brothers, big friends of; you guessed it; Jacob Zuma and partners. Parekh and his cohorts in Imperial Crown Trading – Kgalema Mothlanthe, Duduzane Zuma and others – invariably with the help of loyal cadres in the Department Minerals – illicitly used stolen Kumba documents to apply for the mineral rights which was conveniently allowed to lapse by another company run by modern day moguls; Accelor Mital. The chairman of the company – victim of the scam; Kumba Iron – was none other than Lazarus Zim, co-owner; with the Guptas; of a company called Afripalm.

For those not grasping it all yet; besides the shenanigans of the politicians and their appendices – Mothlanthe, Zuma and others – which is anyway expected and par for the course, we have a situation where the honourable Mr. Zim seems to be closely connected to the band of raiders – RCT and stand to gain handsomely from this latest scheme to enrich and reward the select few with the spoils of the struggle. Whilst Zim plots with the raiders, he remains the chairman – receiving a handsome fee for his efforts – of the company, KUMBA Iron, which will be irreparably harmed by the actions of its chairman and friends. Now, unless I’m mistaken, to be the chairperson of a public company requires a high level of integrity and the chairperson of such companies are expected to have the best interest of the company at heart.

This case presents a clear conflict of interest and to call Zim a man of integrity would be stretching the truth. Instead of taking the honourable route and resign as chairman, Zim, after being pushed, agreed to recuse himself from KUMBA board discussions involving the ICT issue – a very convenient arrangement. He can use that time and over a cup of coffee, can discuss ICT strategy with the Guptas, young Zuma and Parekh.

My gripe today however is not with Zim; after all his actions are not extraordinary. Truth be told, I would’ve been extremely surprised; even shocked had he acted in a different manner. My gripe is with the board of Kumba who, petrified of being called racist or anti-transformation, accept the untenable situation; the only sign of resistance; an odd cowardly remark dropped in passing by board members hoping to placate their nagging consciences.

Board members fearing the racist label are the same people running around claiming, after the fact, their innocence and rabid opposition to apartheid. Today these captains of industry are as silent as their predecessors in the apartheid years; a silence then, that only broke when they saw the writing on the wall. Once again these brave men of integrity are carefully watching for the writing to appear; the sign for them to allow their integrity to once again burst into the open.

My message to these captains of industry; moral pillars of big business; stock up on bully beef and candles, fill up the water cans; there is a long wait ahead – I hope you will find your integrity and values at the end of your vigil.


Scabs, Warthogs and the Economy

October 16, 2009

I mentioned my recent visit to the Pilansberg National park and the lessons in behavioural science I learned, specifically on guiding the impetuous youth on their journey through life.

I also learned some very important lessons in business and economic sciences on the day. As we approached the Pilansberg I heard that the Minister of Trade and Industry say we will not allow South Africans to do menial tasks for poverty wages. Good for him, we cannot allow our labour to become enslaved by capitalist bloodsucking vampires. Around me in the villages I saw our people, sitting around their huts, unemployed, hungry – but happy; happy in the fact that, even though they are poor they are nobody’s slave.

There were of course the normal rogue elements that were trying to get gardening jobs at ridiculously low rates, why; one even had his own lawnmower. I could see on his face and his demeanour, the way he bore himself – a scab of note he was. He had that sick, subservient air of a worker permeating and polluting his surrounding personal space. I turned away in disgust and fortunately we entered the park soon afterwards where we were, thankfully surrounded by proud animals.

Later in the day, arriving at the restaurant and information centre, I was reminded of the creature with the lawnmower. I also remembered the minister’s assurances that we will be innovative and overcome the negative impact of high wages on our global competitive position. There, before my eyes I saw the entrepreneurial spirit and innovative nature of park management at work. Where once there were degraded noble people pushing lawnmowers around the place, there were now Warthogs, on their knees, cropping the lawns, quite happy to do this demeaning and meaningless work to please the imperialist pleasure seekers.

I think Minister Davies should honour the park management with an award. Imagine the impact this will have on the world cup tourists.

We can only hope the bunny huggers and Kortbroek van Schalkwyk does not get wise to, what they will certainly consider animal abuse. In no time they will have Greenpeace ships sailing up the Crocodile River, brandishing paint bombs and burning car tyres teaching the idle unemployed outlandish things such as rioting, street trashing and the fine art of property destruction.


A One-Eyed View

September 16, 2009

If I was a Deputy President in any organisation remotely associated with the ANC Alliance, I’ll be afraid, very afraid, as the saying goes. First, Petrus Mothlanthe, Deputy President of South Africa and the ANC, has a dicey experience during a scheduled landing in Bangui, en-route from Libya. What was he flying in that couldn’t manage a non-stop flight? A single prop micro-light, fitted with a second-hand lawnmower engine? I suppose we must be grateful for small mercies. Didn’t his predecessor, the fat lady with the funny name, charter a Gulfstream to fly to Dubai to watch the “Dances of Cranes”?

Mothlanthe’s reported “mishap” resulted in the arrest of the air-traffic controller in Bangui. Makes you wonder. Could the controller be a Zimbabwean with close ties to Robert Mugabe? Could Mbeki be calling in favours?

The most astounding event however, remains the unfortunate and unplanned removal of the NUM Deputy President’s eye by striking NUM members. The botched operation, which was somehow kept out of the media for more than 24 hours, was apparently, like many botched circumcisions, performed by an unqualified witchdoctor. In this case, a Xhosa rock drill operator who was kicked out of Witchdoctor School after three failed attempts at the anatomy exam. A lecturer, wishing to remain anonymous for obvious reasons, said the man could not tell his backside from his elbow. Despite his inability to pass, the examination authority continued attempts to close the knowledge gap—that is the gap between the student’s knowledge and the examination standards—a process, uniquely South African and commonly known as “dumbing down”. Apparently, training authorities reached the end of their tether when the candidate failed to hand in a clean sheet of paper in his final chemistry exam.

The unfortunate aspirant witchdoctor, Doktela Coldset Uthuli, found a job on the mines but never abandoned his dream of becoming a doctor. It is here where he stole some stone-age cutting tools and other “magical” artifacts, from a display cabinet in the Geology Department, which he used in the operation on poor Piet’s eye. In the meantime Piet told associates he now has a different view of the world, a lot less complicated with fewer dimensions…a lat earth view so to speak.

To crown an eventful week , the Deputy President of the South African National Taxi Council, said to be instrumental in the MOU signed on Friday, was murdered. The Piccanin President, Juliaas, was quick to ride the BTI in honour of the fallen hero, and great ANC hope in deliberations aimed at solving Taxi/BRT fracas.

Patrick Craven, having seen the violence and mayhem, expressed his dismay at the violence perpetrated, an un-expected reaction in itself, coming from a leader who, in the past, was unable to find any indication of violent tendencies amongst COSATU members. It may just be possible that there are some unhappy people lurking around, expressing their displeasure in the only way they learnt during the struggle, and, as prominent leaders of the Alliance often reminds us, “The struggle continues, the revolution is alive and so is its methods”.