Diamonds aren’t forever – not in SA

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.

Nationalisation – A Matter of Life and Death

The nationalisation debate or non-debate, depending on your perspective, could become a matter of life and death it seems. Given the quarters in which the discussion rages at it fiercest, where stabbings and burnings are at the order of the day, some statements by major protagonists could  turn out rather prophetic.

I am referring of course to the spat between the Minister of Mines and the ANC kindergarten. Malema started this dice to death when he stated that nationalization of mines will happen in his lifetime, which means – given the average life expectancy of the South African male being down to 47 – the window for this envisaged nationalization of mines, particularly gold and platinum mines – Malema’s stated target – cannot be too far away. Those having false hopes that the window may be enlarged by Malema’s longevity, think again – the tsotsi’s obesity problem is likely to make the window even smaller and he,  realizing the risk,  are upping the ante on this matter.

Susan Shabangu, in reply to the Tsotsi, and in a desperate attempt to calm the nerves, told mining investors – already suffering jitters when they hear the words South Africa  mining and investment spoken in the same sentence – that nationalization will only happen over her dead body.

Shabangu’s statement are contrary to her position only a few months ago when she made her “State of the Industry” address, stating emphatically that mine owners will wish her dead for various reasons. Ironically, that same mine owners are now praying that she outlasts Julius.

However, those naively pinning their hopes on Shabangu, dare I remind you that the same Shabangu has made a number of U-turns on this subject? The statement by the DMR that state ownership of strategic mineral mines is just another form of nationalisation – nationalisation by stealth so to speak.

Anyone trying to get clarity from Gwede will be left justifiably confused, as Chris Barron found when he interviewed the “Jumping Jack” last week.

As for the leading fornicator, he is too busy building a nation to care about insignificant and boring little debates amongst the minnows. That is the stuff that his “Loottenants” deal with.

Anglo America, hedging their bets will not be derailed by the confusion and Cynthia Caroll, whilst promising a bail out for ESKOM and a great partnership in “strategic” coalmines, are reportedly consuming copious amounts of Chivas with the Tsotsi, discussing compensation for nationalised mines – anything rather than getting into bed with Mick Davis.

A Travesty and a Fairy Tale in One

And so the wheel eventually turns, or perhaps I should say; “As the stomach turns”

 It feels like yesterday when NUM members took hostages at the Two Rivers Mine in an attempt to reinforce their noble attempts at transforming the mining industry. The action by NUM at the time was not surprising, after all, one could say they invented and perfected the art of underground hostage taking. As a matter of fact, I am surprised that they, like the taxi drivers in the case of taxi routes, do not claim intellectual property rights.

Be it as it may, a rival union, on the self same Two Rivers Mine, has now had the audacity to infringe on the irrevocable and sole right – bestowed on NUM by the leaders they proudly spawned, Mantashe and Mothlanthe – to take hostages on mines.

To make matters worse and more insulting, the hostages taken are NUM members, more likely than not, the same people responsible for the previous hostage drama at Two Rivers. No wonder then the exasperation of NUM officials condemning this travesty of justice.

I could not help thinking about an hostage taking event not so long ago which has subsequently become the stuff legends are made off. The legend goes;

The Emperor and the Miners

Once upon a time at a Platinum Mine – in the far west of a country, well known for its dancing emperor and Clown Prince, the ruler saving money by multitasking the prince to fulfil the role of court jester and stand-up comedian – the workers, having been told, by the emperor that they were special and feeling they were entitled to all the riches of the platinum mine, an idea mooted by the Clown Prince, decided to cease work until their wages were higher than in any other place in the world.

The workers, quite rightly, believed they were solely responsible for bringing the ruler to power and anyway, he did promise them wealth and comfort beyond their wildest dreams should they carry him to power. The workers fought hard and dirty and got the emperor to power and this was payback time.

Much to the shock and surprise of the workers, now refusing to work in support of their demand for their promised rewards, the evil Mine Boss dismissed them, banished them from the mine banishing them to a life of hardship, a life without DSTV and washing machines. The Evil One brought in other workers; workers who promptly and without hesitation took over the meaningless jobs with great proficiency. Imagine the confusion, humiliation and surprise of the Banished, having been chased away like worthless dogs, witnessing the cockroaches that have been begging for jobs day-in and day-out at the mine gates, taking the jobs that rightly belonged to them, the members of the guild of miners, who swept the Emperor to power.

They were understandably upset and appealed to their guild and the Clown Prince and the Emperor to assist them with reinstatement but to no avail, because friends of the Emperor were also friends of the Evil One. When they saw there was no deliverance from the fate delivered upon them, they slinked back to their houses. There they lay about, drank beer frolicked with their wives, when mentioned wives returned from the fields, where they were trying to eke out a living.  However during lonely moments they, the Banished got together and counted there remaining and fast dwindling cash resources with great concern.

And so it came to pass. Whilst they were sitting around drinking beer and bemoaning their financial woes, having realised the money promised by the Emperor for the unemployed was barely enough to buy food, a scary short little man of demonic appearance arrived, as if out of nowhere, in their midst. This little man of much power declared himself to them as the Tokoloshe – master of malevolence

The Tokoloshe, having listened to doleful lamentations, presented them with a plan so evil, it almost froze the blood in the veins of the bravest warriors amongst them, one of them, Funa Pumile, so-called because of his urge to rest often, afterwards swore the HIV viruses in his body instantly died. The Tokoloshe as is his want, did not only give them a plan, his servant, dressed in a splendid blue uniform, not dissimilar to that worn by the Emperors Police, gave them short sticks that fired very small arrows at great force and velocity. One of the banished workers fired a test arrow at the wall of his hut to find his recently born baby as dead as a dodo. Strong muti indeed.

The Tokoloshe also had his personal witchdoctor at hand and he promptly supplied the banished workers with a potion, made from wondrous herbs blended with body parts of the now dead baby using a machine – borrowed from a workers kitchen, they haven’t reached the pawning phase of hardship yet – blessed by Russel Hobbs himself, to give them immense strength and make them impervious to the weapons of their enemies.

After drinking their potion, mixed with copious amounts of alcohol, and smoking lots of magical herbs the banished and rejected workers proceeded to the mine with sticks, dancing and singing, jubilant in the knowledge that they will regain their positions, and more. After all, did the Clown Prince not ask for the seizure of mines by the people? Did the emperor’s councillor on gold, gems and fabulous mineral wealth, not threaten the evil mine owners to fit-in-or-fuck-off? They marched with the knowledge that, as in the past, their ruler expects them to act strongly and take, with necessary force and commensurate trashing, what is rightfully theirs.

Soon after they arrived at the mine, whilst they were singing and dancing, summoning the great spirit of the Machine Gun and focussing their minds, now slightly befuddled by a haze of intoxicating herbs, a few rotund policemen, not dissimilar in appearance to Mr. Plod, good friend of Noddy, arrived and prevented them from approaching the Evil One where he was sitting in his sumptuous office sipping coffee and counting his fortune.

Having recognised friends and allies amongst the police and not wanting to hurt friends, they used tactics taught by the Tokoloshe and some of the Emperor’s advisers many years ago and staged a fake retreat. The police, not seeing any killing opportunities, promptly withdrew, signalling the opportunity for the banished workers to attack and breach the defences.  

And children, that is what they did.

They broke through the barriers of steel and concrete and proceeded underground. There they secured an area and promptly proceeded to, using the skills passed on by guild leaders and Emperor’s advisors, construct pipe bombs using pipes and explosives liberated underground. They secured a comfortable area, not to cold and not to warm, a suitable sleeping place, for those that do not have watch or bomb making duty, where they could dig in so to speak.

Once they secured their control centre they did what they do best underground; they promptly went to sleep, all of them except one, a man by the name of Katalile Minadagiwa, who, due to his inability to participate in logical debate and being a fan of the Clown Prince, having studied every speech ever made by the crown prince, was chosen to negotiate with the Evil Owner.

In the meantime, the police were called back and arrived with the police’s newly trained special forces, flown in by special jet, in tow. Whilst the suitably obese police commissioner shouted instructions, Katalile spoke to The Evil One on the telephone, demanding the presence of the ruler, the Clown Prince or the big cheese of the guild. 

Whilst this hullabaloo was carrying on the task force proceeded underground armed with rifles, grenades flame throwers and all manners of violence perpetrating equipment, to back up their newly acquired licences to kill, proudly displayed on cards contained in a little pouches hanging around there necks. Positively professional, reminding somewhat of the ID tags of conference-delegates, all very smart.

Yes children; they were ready and well prepared to marinate, tenderise and roast their adversaries. The scene was set for an epic battle. A fight to death – a battle for the hart and soul of the economy.

The first bomb was set off by the rebel miners, a policeman was pole axed by shrapnel from the pipe bomb and all hell broke loose. After the lapse of a suitably long period of time to justify the description of ‘epic battle’, surpassing in length and intensity of the well publicised turf wars of the Zama-zamas having produced a sufficient number of wounded on both sides, the begrudged miners were subdued and hauled away to be drawn and quartered by the Emperor’s men, at the behest of the Evil One, who, it was learned, made a sizeable contribution to the “Welfare of the Emperor” fund.

The mine owner subsequently liberated his money and moved it to a far of land with an honest Emperor and peaceful hard working people. There he started a new mine and became immensely rich.

The Clown Prince became bloated and fat, and his head – like a black hole, dark, empty and dense – imploded and he became rather pleasant blabbering incoherently day in and day out in the process, driving the Emperor insane, prompting him to embark on a crusade against fair-weather friends.

The mines in the once great land quietly died and the workers returned to the land where they tried to eke out a living and eventually succumbed to famine and pestilence.

Ed. What a load of non-sense. You certainly have a wild imagination

The Emperor and the Miners

Once upon a time at a Platinum Mine – in the far west of a country, well known for its dancing emperor and Clown Prince, the ruler saving money by multitasking the prince to fulfil the role of court jester and stand-up comedian – the workers, having been told, by the emperor that they were special and feeling they were entitled to all the riches of the platinum mine, an idea mooted by the Clown Prince, decided to cease work until their wages were higher than in any other place in the world.

The workers, quite rightly, believed they were solely responsible for bringing the ruler to power and anyway, he did promise them wealth and comfort beyond their wildest dreams should they carry him to power. The workers fought hard and dirty and got the emperor to power and this was payback time.

Much to the shock and surprise of the workers, now refusing to work in support of their demand for their promised rewards, the evil Mine Boss dismissed them, banished them from the mine asigning them to a life of hardship, a life without DSTV and washing machines. The Evil One brought in other workers; workers who promptly and without hesitation took over the meaningless jobs with great proficiency. Imagine the confusion, humiliation and surprise of the Banished, having been chased away like worthless dogs, witnessing the cockroaches that have been begging for jobs day-in and day-out at the mine gates, taking the jobs that rightly belonged to them, the members of the guild of miners, who swept the Emperor to power.

They were understandably upset and appealed to their guild and the Clown Prince and the Emperor to assist them with reinstatement but to no avail, because friends of the Emperor were also friends of the Evil One. When they saw there was no deliverance from the fate delivered upon them, they slinked back to their houses. There they lay about, drank beer frolicked with their wives, when mentioned wives returned from the fields, where they were trying to eke out a living.  However during lonely moments they, the Banished got together and counted there remaining and fast dwindling cash resources with great concern.

And so it came to pass. Whilst they were sitting around drinking beer and bemoaning their financial woes, having realised the money promised by the Emperor for the unemployed was barely enough to buy food, a scary short little man of demonic appearance arrived, as if out of nowhere, in their midst. This little man of much power declared himself to them as the Tokoloshe – master of malevolence

The Tokoloshe, having listened to doleful lamentations, presented them with a plan so evil, it almost froze the blood in the veins of the bravest warriors amongst them, one of them, Funa Pumile, so-called because of his urge to rest often, afterwards swore the HIV viruses in his body instantly died. The Tokoloshe as is his want, did not only give them a plan, his servant, dressed in a splendid blue uniform, not dissimilar to that worn by the Emperors Police, gave them short sticks that fired very small arrows at great force and velocity. One of the banished workers fired a test arrow at the wall of his hut to find his recently born baby as dead as a dodo. Strong muti indeed.

The Tokoloshe also had his personal witchdoctor at hand and he promptly supplied the banished workers with a potion, made from wondrous herbs blended with body parts of the now dead baby using a machine – borrowed from a workers kitchen, they haven’t reached the pawning phase of hardship yet – blessed by Russel Hobbs himself, to give them immense strength and make them impervious to the weapons of their enemies.

After drinking their potion, mixed with copious amounts of alcohol, and smoking lots of magical herbs the banished and rejected workers proceeded to the mine with sticks, dancing and singing, jubilant in the knowledge that they will regain their positions, and more. After all, did the Clown Prince not ask for the seizure of mines by the people? Did the emperor’s councillor on gold, gems and fabulous mineral wealth, not threaten the evil mine owners to fit-in-or-fuck-off? They marched with the knowledge that, as in the past, their ruler expects them to act strongly and take, with necessary force and commensurate trashing, what is rightfully theirs.

Soon after they arrived at the mine, whilst they were singing and dancing, summoning the great spirit of the Machine Gun and focussing their minds, now slightly befuddled by a haze of intoxicating herbs, a few rotund policemen, not dissimilar in appearance to Mr. Plod, good friend of Noddy, arrived and prevented them from approaching the Evil One where he was sitting in his sumptuous office sipping coffee and counting his fortune.

Having recognised friends and allies amongst the police and not wanting to hurt friends, they used tactics taught by the Tokoloshe and some of the Emperor’s advisers many years ago and staged a fake retreat. The police, not seeing any killing opportunities, promptly withdrew, signalling the opportunity for the banished workers to attack and breach the defences.  

And children, that is what they did.

They broke through the barriers of steel and concrete and proceeded underground. There they secured an area and promptly proceeded to, using the skills passed on by guild leaders and Emperor’s advisors, construct pipe bombs using pipes and explosives liberated underground. They secured a comfortable area, not to cold and not to warm, a suitable sleeping place, for those that do not have watch or bomb making duty, where they could dig in so to speak.

Once they secured their control centre they did what they do best underground; they promptly went to sleep, all of them except one, a man by the name of Katalile Minadagiwa, who, due to his inability to participate in logical debate and being a fan of the Clown Prince, having studied every speech ever made by the crown prince, was chosen to negotiate with the Evil Owner.

In the meantime, the police were called back and arrived with the police’s newly trained special forces, flown in by special jet, in tow. Whilst the suitably obese police commissioner shouted instructions, Katalile spoke to The Evil One on the telephone, demanding the presence of the ruler, the Clown Prince or the big cheese of the guild. 

Whilst this hullabaloo was carrying on the task force proceeded underground armed with rifles, grenades flame throwers and all manners of violence perpetrating equipment, to back up their newly acquired licences to kill, proudly displayed on cards contained in a little pouches hanging around there necks. Positively professional, reminding somewhat of the ID tags of conference-delegates, all very smart.

Yes children; they were ready and well prepared to marinate, tenderise and roast their adversaries. The scene was set for an epic battle. A fight to death – a battle for the hart and soul of the economy.

The first bomb was set off by the rebel miners, a policeman was pole axed by shrapnel from the pipe bomb and all hell broke loose. After the lapse of a suitably long period of time to justify the description of ‘epic battle’, surpassing in length and intensity of the well publicised turf wars of the Zama-zamas having produced a sufficient number of wounded on both sides, the begrudged miners were subdued and hauled away to be drawn and quartered by the Emperor’s men, at the behest of the Evil One, who, it was learned, made a sizeable contribution to the “Welfare of the Emperor” fund.

The mine owner subsequently liberated his money and moved it to a far of land with an honest Emperor and peaceful hard working people. There he started a new mine and became immensely rich.

The Clown Prince became bloated and fat, and his head – like a black hole, dark, empty and dense – imploded and he became rather pleasant blabbering incoherently day in and day out in the process, driving the Emperor insane, prompting him to embark on a crusade against fair-weather friends.

The mines in the once great land quietly died and the workers returned to the land where they tried to eke out a living and eventually succumbed to famine and pestilence.

Ed. What a load of non-sense. You certainly have a wild imagination

An(c) Economy of Lies

             

ANC party secretary-general Gwede Mantashe yesterday announced that the ANC national executive committee, which met at the weekend, has decided to refer the nationalisation debate to its economic transformation committee, which will then develop the party’s position on the matter.

 In three weeks, we saw this unfolding drama develop from a position of “No nationalisation of Mines to the current position.

Malema, at an ANC Youth League conference three weeks ago, called for the nationalisation of mines, invoking the requirements of the “Freedom Charter”. He was quickly backed by Vavi, Cosatu, Vavi and the SACP.

Gwede Mantashe, in his capacity as Secretary General of the ANC reacted, saying that; “Nationalisation of the Mines are not on the ANC agenda”. Susan Shabangu said a few days later that state owned mines are a possibility.

The youth league reiterates its demand for Nationalisation, again backed by Vavi and Cosatu.

Gwede Mantashe in his real skin as President of the SACP makes another one of his famous U-Turns and agrees to that Nationalisation should be considered. At the same time, Duarte tells the media that the ANC will have a national debate, one of those things we hear about but never participate.

Susan Shabangu, to confuse the market, says Nationalisation will not happen, whilst Zuma agrees with the idea of a “National debate”. On Sunday, ANC policy academic and MP, Professor Ben Turok assured all Sunday Times readers that there is no possibility of nationalisation of mines.

I am sure, as with the replacement of Mboweni with hard line Communist Gill Marcus, many commentators will call this a positive development. The only possible positive spin-off will be the closure of mining companies filled with BEE leeches and no economic right to exist

Does anybody know who is in charge? This is a very strange development in the light of the President’ Assurance that the country is not governed by trade unions. To me it seems the tail wags the dog, or is this “Rule by Confusion and Lies”.

Two weeks ago, that great proponent of truth from ANC ranks, Carl Niehaus referred to the science of lying as perfected by politicians the world over, a science in which our ANC and government do exceedingly well and can justly claim world leadership. Honest Carl proudly told us he never told lies as spokesperson for the ANC, he just used the “Science of Spin”. Was Carl perhaps “spinning a yarn?” I, for one, do not see the difference in blatant lies and spin. What I do know for certain, is that the ANC and its partners and therefore the government of the day is particularly adept at lying. Lenin’s doctrine, which is not out of place for an organisation with a strong communist influence, like the ANC, teaches; “Lies told of enough becomes the truth”. In the face of this double-speak a fitting and well-applied principle of Mr. Lenin’s teachings.

As for the owners and investors, they will not go the marginal mines; they are after the rich ones. For those who expect fair compensation, dream on, there is no money to compensate you for your investment. What will the owners and investors do? They will quietly move their money out and minimise risk.

The Commies are in Town

Two weeks ago, that great proponent of truth from ANC ranks, Carl Niehaus referred to the science of lying as perfected by politicians the world over, a science in which our ANC and government do exceedingly well and can justly claim world leadership. Honest Carl proudly told us he never told lies as spokesperson for the ANC, he just used the “Science of Spin”. Was Carl perhaps “spinning a yarn?” I, for one, do not see the difference in blatant lies and spin. What I do know for certain, is that the ANC and its partners and therefore the government of the day is particularly adept at lying. Lenin’s doctrine, which is not out of place for an organisation with a strong communist influence, like the ANC, teaches; “Lies told of enough becomes the truth”. A very appropriate and well-applied principle of Mr. Lenin.

This weekend saw the ANC using their consummate skill at lying, sorry… “Spin”, when they announced the replacement of Tito Mboweni and used all their collective propagandists to whitewash the mine nationalisation issue. Much was made by The President of Marcus’ previous spell with the bank and her competence. The prominence around the announcement was noticeable, and in it’s visibility, it was probably only exceeded by the announcement of the Zuma cabinet. The announcement was hardly cold and before the praise singers from COSATU and the SACP, strong critics of previous economic policy and monetary policy, were out in force dancing with joy.

The appointment of Gill Marcus and the continuing discussions around the nationalisation of mines is cause for concern. Marcus, being a high-ranking member of the SACP, will unlike Tito Mboweni, toe the party line and enforce the will of the left. The announcement of Mboweni’s sudden unavailability is, to be frank, suspicious and reeks of an engineered exit

Someone once told me that when looking at issues you should look through the bush and not at the bush. The latest incarnation of the South African economy being created by the Zuma regime is looking more and more like a monster with the potential to destroy everything that’s been built up through many years. What is alarming is the inability or unwillingness of commentators, economists and so-called experts to look through the bush. Well known, and often quoted, economist Dawie Roodt, on the appointment of Gill Marcus, said economic policy, and monetary policy in particular, is established and stable and not that simple to change. To Mr.Roodt, I have this to say; “Have a look at that hero of the remnants of Communist ideology the world over, Hugo Chavez, and tell me it is not simple to change economic policy”.

At the same time, the weekend newspapers published letters and columns by prominent ANC spokespersons and policy makers placating the market and calming the waves created by the “Nationalisation Debate” and the Presidents thundering silence on the issue, keeping in mind the President is a communist taught at the knee of staunch Stalinist Harry Gwala. In this regard, the letter by presidential spokesperson Vincent Magwenya tried to excuse the lack of a clear stance by the President referring to his support for a public debate, the President’s and ANC’s favourite cop-out. At the same time, Professor Ben Turok, who is nothing more than a starry-eyed academic, tried to convince us that nationalization can and will not happen.

Examining the facts, looking through the bush, so to speak, we see a different picture. The ANC leftwing set out to destroy the Scorpions, a mission accomplished. They have set out to change the management at the SABC, another target achieved in double-quick time. They launched a campaign against Trevor Manuel’s independence and now have him working under the close supervision and control of Collins Chabane, a Zuma faithful. Tito Mboweni, a particular thorn in the side of the left, neatly removed and replaced by one of their own. The reform of the judiciary has been targeted, the process to change, in the name of transformation, is well advanced under the guidance of another high-ranking Communist, Jeff Radebe.

What lies ahead? On nationalisation, a strong call from the left, by mouths of the Youth league, COSATU and The SACP, resulted in Gwede Mantashe, Secretary General of the ANC, stating emphatically that nationalisation is not on the ANC agenda. Soon afterwards, Gwede Mantashe, President of The SACP came out in strong support of the nationalization lobby, The Minister after telling the SABC that nationalization is in line with the freedom charter, later the week said nationalization is not on the cards. Whilst Shebang was placating the market, Jesse Duarte announced a national debate on the issue.

The next critical issue that will face us is destruction of the provincial tier of government, a critical step needed to eradicate the “counter-revolutionary” enemies and centralise power in Luthuli House. On the cards, is legislation that will have University Vice-Chancellors reporting to Blade Nzimandi, to expedite “Dumbing Down” and lowering of standards.  

The level of lies and deceit we are experiencing is concerning but not surprising given the morality of our politicians. The complicity of people who should inform us of the underlying threats facing us is scary. I wonder why many economists, employed by banks and other institutions, support the threats to a fee economy, through their silence, Could it be that their greed for short-term benefits exceeds the need for long-term economic prosperity and freedom. Perhaps they have seen the writing on the wall and are buying time, to move their assets. Sol Kerzner did set the example of how to play the positive role whilst moving his millions offshore in the mid-nineties.

Of Crocodiles and Mines

I am not sure whether I should be sad, bemused or angry. The hostage drama at the Crocodile River platinum mine near Brits has to stand out as another extreme act of sadomasochism by the “entitled proletariat” under the guise of the “poor oppressed worker”

To understand the issues and dynamics of the situation it helps to have a bit of a background of events leading up to the crisis. The existence of this mine in itself is a minor miracle, having changed hands five times since it came into existence in the mid eighties. The mine has been profitable for very short periods and only when the platinum group metals were at extremely and unsustainably high levels. Currently the mine is not profitable and are burning cash in the hope that the platinum price will pick up, the rand will weaken or hopefully both. Should this not materialise, the mine will probably close before the year-end. The  current situation will, most likely, expedite the eminent mine closure and resultant job losses at this company built on hope and prayers.

 During the checkered history of the company, few people made money. Those who made money can thank good timing, luck, greed and good marketing. Some who owned the mine during the years were able to sell their “asset of dubious value”, to often poorly informed, and over-optimistic investors, “high” on platinum price euphoria. The current owners represent a considerable number of ill-informed Canadians since the company is registered in Canada with its trading in Toronto and Johannesburg. This can be interpreted as a subtle warning to the few stupid investors out there who, despite the Fraser report, are still investing into South African mining projects.

In order to keep the mine going, management I believe, took a number of actions to preserve cash thus prolonging mine life in the hope that the platinum price will recover. The objective of these actions is to recover losses and to make profit. As a result, people remain employed and suppliers are paid. Actions taken, I believe, included the reduction of development, necessary to open ore reserves for longer-term sustainability, the removal of the mining contractor responsible for operations and taking over the work force from the contractor, thus removing waste from the value chain.

 It is the ex-contractor workers who now hold people hostage demanding permanent employment on a mine making a loss but with the clear intent to keep them employed as long as humanly possible.

These “entitled” elements in our society are intent on biting the hand that feeds them. They are quite prepared to go and lie at home and breed once they have destroyed the business. Unfortunately, this action is the result of a strike culture that permeates South African society. A culture perpetuated by unions in their power struggle against the market economy. The union of course, denies that their members are holding hostages. Anyone believing this assertion is incredibly naïve taking into account that the union involved is  the National Union of Mineworkers, the same lot that is holding the country hostage with the 2010 soccer stadium gun against our heads.

It is ironic, were these poor hostage holding strikers stuck underground because of a power failure or other technical reason, the union and the DME would have been extremely critical of about management’s disregard for miners’ safety. It must be understood, dangerous situations in mine can only be created by management. The “experienced, intelligent and highly perceptive worker” will never expose himself to danger

With the Pamodzi case still fresh in our minds the astute thing is for Crocodile River Management to cut their losses, stop the bleeding and get the hell out of there. One just wonders how many companies must be closed down by irresponsible unions and their members before sanity will prevail.

 There are few winners here. The investors, with few lucky exceptions, will lose their money, the employees will lose their jobs, the strikers and hostage takers deservedly so and suppliers will have to write off what is owed to them.  The BEE partners, who obtained their stake in the company at a discount, may not loose and probably already took their profits at the expense of workers and real investors. The Union will be walking away, smiling and flexing their collective muscles after another “well-deserved” victory for the left and a body blow for sanity.

Stealing Mines in South Africa

This week saw a frenzy of calls for the nationalisation of South African mines. It started with a call from the ANC youth league, one of the first testers of public and market opinion, and was quickly followed by a similar call by COSATU, despite General Secretary Gwede Mantashe denying nationalization of mines being on the ANC agenda. The debate was kept on top of the agenda with a call by the Young Communist League on Friday, supporting the ANCYL and COSATU in their calls.

I can already see commentators, very optimistically and self-assured, assert that in our advanced democracy and our liberal economy, nationalisation will not happen, since the voices of moderation within the ANC will hold sway and deliver us from this evil. To the naïve Afro-optimists I can only say, dream on. The high regard in which Fidel Castro and Hugo Chavez are held by said organisations, and other proponents of nationalisation within the ruling party, should be a clear indication that nationalisation has become a real possibility; I will not refer to it as threat for the fear of being labeled a negative afro-pessimist.

During a week of calls for nationalisation of mines, by the indisputable king makers of the African National Congress, the ANC Youth League, Young Communist League and COSATU, only one dissenting voice rose in the wilderness, that of Gwede Mantashe, who stated that the nationalisation of mines was not on the ANC agenda. The strong pro-nationalisation faction within the ANC cannot and must not be underestimated; after all, they managed to get Mbeki recalled despite calls from moderates.

It can be expected that the idea of nationalisation will be pursued with the same vigour as the recall of Mbeki, the removal of the Scorpions and the recent, swift hatchet job on the ANC board, all of these particularly hated thorns in the side of the left-wing of the ruling party, the same people calling for nationalization. This group, including Mantashe has been at the forefront of a campaign to transform the judiciary, currently a top priority with personal attention being given by the President. The fact that the group invoked their trump card, the clear reference to nationalisation in the “holy document”, the “Freedom Charter”, is a clear indication of their determination to succeed in their quest.

Gwede Mantashe the only voice speaking against the nationalisation should not inspire confidence with owners and potential investors in this critical industry. Mantashe’s views on a market economy are well known and will not make many capitalists jump with joy…a bit like having a wolf minding the sheep. The inimitable Mr. Mantashe was one of the first people mooting the possibility of a State Mining Company. He was, through his career as leader of the NUM and the SACP, an ardent supporter of extreme left economic policy and a vocal critic of business, in particular mining companies. Mantashe has also established himself as a manipulative man with many agendas who is no stranger to twisting the truth to suit his priority agenda at any specific point in time. In his climb to the top, his modus-operandi of divide and rule, left divided organisations in its wake whilst, his habit of changing his mind, twisting the truth and flatly denying responsibility does not inspire confidence. I will not consider it beyond Mr. Mantashe, to have instigated this call, creating a situation he can use, to manipulate the situation, a dangerous game indeed.

The comparison, Minister of Mines, Susan Shabangu, drew on the SABC program “Fokus” when asked about nationalization of mines, between a State Owned Mining Company and nationalization does not bode well. It opens the way for wholesale nationalization. The state-run diamond operations, she referred to, is hardly a pinnacle of achievement. This should have set alarm bells ringing. On Monday afternoon the ever-irritating Jesse Duarte said, “with the opinions on nationalisation a national debate is required” or something to that effect. We know how these things work. The noisy “king makers” within the Alliance becomes the voice in the debate through intimidation, anarchy and violence. In ANC-speak this means nationalisation is inevitable.

As things stand, and according to the Fraser Institute in Canada, South Africa is the third least attractive investment destination for international mining investors in Africa, beaten only by the DRC and Zimbabwe. This dubious honour was achieved because of deterrents such as environmental regulations, the tax regime and especially, the uncertainty as to the interpretation of new mining legislation, regulatory inconsistencies and misgivings about land claims. South Africa also received a poor score in terms of labour relations and security. We can now add an additional factor, one as bad as any previously identified factors, probably even worse, the threat of nationalization. History teaches us that chances of reasonable and fair compensation, in the event of nationalization, is almost zero. 

It is no wonder that a company like BHP Billiton, who knew and had first hand experience of Mantashe as a board member at their Samancor Company, have made few investments in the South African mining industry in the last few years. On the contrary, they cancelled oil exploration plans, sold a large stake in Samancor and disposed of their interests in diamond exploration mining. Considering the withdrawal of top gold miner Barrick from South Africa, Anglo’s desperate scramble to get rid of their gold mining interests, Rio Tinto’s low-level presence in exploration projects and recent changes in management structure coupled with rumours of planned asset disposals in South Africa by Goldfields. The prospect youths and low-skilled workers miners, who do not understand the basic concepts of the need of fixed investment, the basics of supply and demand and the basic idea of profit and cash generation in a business running around creating mayhem in support of their call for nationalisation, could be the final straw for mine owners and potential investors.

Disinvestment and “investor strikes” are seldom accompanied by fanfare. Decision makers in mining, in many aspects often act very quietly in threatening situations, preferring to keep all future options open. They will more often than not, step back gently and observe the unfolding drama from a safe place whilst coldly and unemotionally assessing their risks before voting with their chequebooks. They will like in the case of Zambia and the former Soviet Union, bide their time and once the lesson has been learnt they will be back on their terms. They will not shed a tear for the destruction of the nationalised mines; after all, they will be the victims of nationalization. 

Judging the success or rather the lack of success of some of the BEE mining ventures, all of them socially engineered initiatives, one wonders how long it will take to destroy a nationalised South African mine.

Open Letter to Gwede Mantashe

Open Letter To Gwede Mantashe

 

                                                                                                                                                                                                                                                                                                            January 9, 2009                         

The General Secretary

The African National Congress

Dear Comrade Mantashe,

 

State Owned Mining Company.

 

With the general election behind us and the resounding success of the ANC and its alliance partners your mind must be occupied by the planning and strategising around your ideas for the state mining company that has been a dream of yours for many years. I believe you are the best person to drive and manage such a company given your vast experience of the mining industry, and your understanding of the industry, warts and all, can only lead to success. However with some of the issues needing cleaning up, like sorting out the wayward lot in the Western Cape, Sbu’s car, taxi drivers and the Rapid Bus Transport System, Telkom and that pesky Barney Pityana fellow. I’m sure you find the inability, to give your noble vision for a State Owned Mining Company its deserved attention, very frustrating.

To add insult to injury, Ibrahim Patel, typical of the Western Cape types, goes and steals a march on you and bails out Seardel and their fat, lazy sewing machine operators. I always believed you couldn’t trust anybody from the Western Cape in an economically critical cabinet portfolio. They are just too laid back and plain lazy.

The time has come for you to appoint someone who shares your passion and vision. Someone with similar vision, enthusiasm and commitment. Someone who can take your vision forward now that you have a mandate from your constituency. Now is the time to get the project up and running whilst the capitalist factions within the ANC are still stunned and distracted. If you wait too long they may get organised and drum up enough support to scupper your plans. I believe, without being presumptuous, that I could be the ideal person to make your dreams a reality.

I have the background, education skills, experience and personality that make me the ideal candidate to get the project of the ground. As a young boy, my grandfather taught me how to use a bullwhip on the lazy farm workers, an experience that stood me in good stead later in life. I completed my school education in 1971 after which I enrolled at University. There I dabbled in politics and told everyone I was a communist whilst extolling the virtues of my great hero, Fidel Castro, thus gaining my struggle credentials. After being kicked out of University, I joined the civil service, where I worked for the CSIR in telecommunication research, which helped me to understand our co-operation with the USA on space and telecommunication projects. During my tenure there, I learned a lot about spies and the intelligence community by listening very carefully and studying many textbooks by Ian Fleming, Ken Follet, Tom Clancy and other intelligence and counter intelligence experts. Because of my vast body of knowledge and experience, I, unlike lightweights such as Vusi Pikoli, understand issues critical to state security and I am probably the best-qualified person in South Africa, after President Zuma and Moe Shaik of course, in this critical area. I mention this because I know; both you and the President are trying to deploy as many as possible intelligence operatives from the struggle era into the new government. Very clever, we will not have Xenophobic attacks again only to hear from the likes of Kasrils that NIS knew nothing about it. In this time I did military service, unlike Carl Niehaus I did not take the easy way out…I went up there to learn and hone my skills as a leader and a ruthless soldier. I made it to sergeant, however, my military carreer was cut short by my desire to commit to a fulltime mining career.

Adding word to deed, I joined the mines where I showed my leadership qualities and rose through the ranks to a leadership position in the UOASA (now UASA). You may think that leaders in UOASA had it easy compared to leaders of NUM. Do not believe that, they were a bunch of ninnies walking around with matches, tyres, petrol and machetes, no offense intended. We did not have those luxuries, to swell membership and deal with management, we had only our leadership skills and charm to rely on. However, as some of our comrades say, we did not join the struggle to remain poor and stupid, so I decided to further my mining career and resumed my studies.

I obtained a mining and business qualification and quickly rose through the ranks to a senior management position. During that time, I learned how to deal effectively with Unions, DME inspectors and the many technical and social challenges facing the industry. I learned how to sidestep, beg and, as is the want of our President, promise anything under the sun. Most important, I learned how to spot lazy loafers a mile away. I have also added considerably to my vast knowledge by using my idle time to learn about the GULAG, having watched Michael Palin’s excellent programme showing how effectively Stalin dealt with workers in the uranium mines in Siberia, I became an expert in this field of study. I have I have submitted my degree request to the University of Novokutsnesk and I my degree will be awarded soon.

I also learned a lot about you as a leader, the way you led NUM, SACP and ANC, your immense ability to apply the principle of “divide and rule”. Examples of your cunning resolve are legion, getting Archie out of NUM, manipulating the entire ANC and inserting your carefully selected team to lead the next phase of the economic emancipation of the country and its people. The cunning way in which you by, sowing confusion in the ranks, kept everyone focused  on your objectives, all the time thinking they were doing it for themselves.

Having given your plans and vision considerable thought, I came up with some excellent plans that will make this venture a great success. Obviously, we need a resource. I suggest we nationalise Pamodzi and Anglo Ashanti’s South African gold mines. I won’t be surprised, in fact I almost sure, you manipulated Cynthia Carroll into selling Anglo Ashanti. I mean, we now have a good reason to nationalise the resource, not wanting it in foreign, especially American, hands. As for Pamodzi, we know nobody really wants it. I do however believe, by applying my labour model, we can turn it into major success.

The second most important issue is the Human Resource requirement, people and skills. We know that we lack technical and management skills and given the spectacular failure of Gipsa, which we know was your initiative sabotaged by the Mbeki lot, we are nowhere nearer a solution. We can however steal a march on the rest by using Sonjika and Zokwane’s idea of arresting mine managers when they have fatalities on their mines. We can then deploy them to the State Mines as punishment, a bit like the GULAG. Some of the other technical skills we require can be had in China. With your special relationships, we can easily facilitate that. I thought about your idea of using African skills but in my experience, they are not very good and besides, they will probably be killed by our Xenophobes. The good thing about employing Chinese is that they can work long hours and even stay underground between shifts. They are used to dying in the mine, in China they die by their thousands and you never hear a word of complaint. The performance of Chinese workers in South African mines, in the early days, is legendary.

As for the semi-skilled labourers needed, it should be easy to convince the Unions that the State Mine is theirs as much as the government’s. Using that argument, and a change here and there to the labour laws, we can exempt the State Mines from the restrictive clauses of the LRA . We should be able to employ the unemployed at the same wage we pay Zimbabwean illegals. Another source of semi-skilled labour is cable thieves and illegal miners underground. They are actually ideal for the purpose. Their modus operandi of living underground for long periods, when stealing copper cable and gold, makes them ideally suited for the job at hand. We only have to bring them to surface once in a month to avoid destruction of pigmentation. I have many more ideas but I do not want to bore you now, we can discuss those when we meet to discuss my employment terms.

  Your Partner in Struggle

  Comrade George Annandale