MAC: Mines and Communities

South Africa: Police Fire Rubber Bullets at Ivanhoe Mine Protesters

Published by MAC on 2014-11-30

Police Fire Rubber Bullets at Ivanhoe Mine Protesters

By Tshepiso Mokhema 

Bloomberg

26 November 2014

South African police fired rubber bullets to disperse protesters who blocked a highway with rocks and tires near Ivanhoe Mines Ltd.’s Platreef project to demonstrate against plans to start building the $1.6 billion platinum mine.

Some members of the local community are opposed to the approval of a license that allows billionaire Robert Friedland’s Ivanhoe to develop Platreef. The South African Police Service removed the protesters and arrested three, according to spokesman Steve Mabuza. Ivanhoe said there were about 100 protesters while police estimated between 300 and 500.

“The police are shooting at us with rubber bullets and we have no idea why. This is a peaceful protest,” said Frans Makhafola, deputy chairman of the Masehlaneng Development Committee, one of the bodies representing the community. “We want further engagement and more talks to happen.”

Ivanhoe plans to exploit part of the world’s largest platinum-bearing geological feature, known as the Bushveld Complex. Platreef is next to Anglo American Platinum Holdings Ltd. (AMS)’s Mogalakwena mine, the biggest and most profitable mine owned by the world’s largest producer. When Platreef starts production in 2020, it’s projected to become the lowest-cost platinum-group metal producer in Africa, according to the company.

“Ivanhoe Mines is confident that the overwhelming majority of people in our host communities support the Platreef Project,” the company said in an e-mailed response to queries. “The company will not be held hostage by a small group of professional, self-serving agitators whose agenda and conduct is contrary to the majority interests.”

Equity Ownership

Ivanhoe said it has granted equity ownership in the project to community trusts that represent approximately 150,000 local residents. The protesters were falsely informed that the company would be recruiting workers, Ivanhoe said. South Africa has an unemployment rate of about 25 percent.

“We are told that the contractors for the mine will be there tomorrow,” Mabuza said. “These people are fighting for jobs as well.”

South Africa accounts for about three-quarters of world production of platinum.


Friedland gets approval for South Africa platinum mine

Franz Wild

Bloomberg

5 Nov 2014

Billionaire Robert Friedland’s Ivanhoe Mines Ltd. said South Africa’s Department of Mineral Resources gave final approval for the company to start building one of the world’s biggest platinum mines.

The government issued the license to produce platinum-group and base metals at the $1.6 billion Platreef project in the northern Limpopo province for a renewable 30-year period, the Vancouver-based company said in a statement today.

The authorization “signals the South African government’s determination to grow our country’s economy,” Mines Minister Ngoako Ramatlhodi said, according to the statement. “The Platreef Project will attract foreign capital, create much needed jobs and contribute significantly to socio-economic development in areas surrounding the project.”

The approval means Ivanhoe’s local unit, Ivanplats, will scrap a plan to cut jobs at Platreef, the company said. The company had initiated the process because it said it didn’t have a definite date to start mining.


Ivanhoe OK to build one of world’s biggest platinum mines

Cecilia Jamasmie

Mining.com

5 November 2014

Shares in Robert Friedland’s Ivanhoe Mines (TSE:IVN) were soaring this morning, jumping over 12% mid-morning, as South Africa’s Department of Mineral Resources gave final approval for the Canadian company to start building Platreef, one of the world’s biggest platinum mines.

The African government, said Ivanhoe in a statement, issued the license to produce platinum-group and base metals at the $1.6 billion Platreef project in the northern Limpopo province for a renewable 30-year period.

The authorization “signals the South African government’s determination to grow our country’s economy,” Mines Minister Ngoako Ramatlhodi said

The authorization “signals the South African government’s determination to grow our country’s economy,” Mines Minister Ngoako Ramatlhodi said, according to the statement. “The Platreef Project will attract foreign capital, create much needed jobs and contribute significantly to socio-economic development in areas surrounding the project.”

No job cuts necessary

Last month the Vancouver-based company said that it had no choice but to lay-off about 325 people at the project, after waiting more than four months for a mining permit.

But today’s news means that measure won’t be necessary, the company said.

Based on a preliminary economic assessment, the Platreef project could mine eight million tonnes a year yielding 785,000 ounces of platinum, palladium, rhodium and gold per year. According to the company, this would make it Africa's lowest-cost producer of platinum-group metals.

Ivanhoe completed an empowerment deal in September, which means that 26% of the venture in hands of local communities.


Friedland's plan for $1.6bn platinum mine at impasse

Franz Wild

Bloomberg

1 November 2014

Construction of the biggest platinum mine planned since 1993 is being delayed because of an impasse between billionaire Robert Friedland’s Ivanhoe Mines Ltd. (IVN) and South Africa’s mines ministry over the extent to which local communities will benefit.

South Africa’s Department of Mineral Resources delayed authorization to start building the $1.6 billion Platreef mine by 12 weeks to a target date of Nov. 26, saying some elements of the company’s plan to benefit the surrounding community were “sketchy” and did “not offer much,” according to an Oct. 2 letter sent to Ivanhoe and seen by Bloomberg. The department said its demands were “not exhaustive” and it may request “further clarification” before it gives the go-ahead.

Ivanhoe Chief Executive Officer Lars-Eric Johansson said in an Oct. 9 response to the mineral resources department, a copy of which Bloomberg has obtained, that “we believe that each and every formal request by your department to date has been accommodated.”

The department’s demands come amid opposition by some groups from one of South Africa’s poorest communities in northern Limpopo province over how Ivanplats, the Vancouver-based company’s local unit, brokered a deal to sell community members a stake in the project to meet government requirements.

South African mines minister Ngoako Ramatlhodi has asked to meet Friedland to resolve issues, the department said Oct. 30 in an e-mailed response to questions. The department “cannot ignore complaints from the community and is duty-bound listen to the communities and address their concerns,” it said.

Job Cuts

“The Department regrets the leakage of correspondence with Ivanhoe wherein fundamental regulatory issues are distorted and trivialized,” it said. The department said it “has not delayed the issuing of the mining right” and the minister is seeking a meeting with Friedland to resolve the issues.

Ivanhoe said it can’t comment on correspondence with the ministry because it’s confidential.

The company said on Oct. 15 it took a legal step allowing it to consider cutting 325 jobs at Platreef while it awaits a definitive date for the mining-right approval -- the final notary hurdle before it can start digging the mine.

Projected to produce at least 785,000 ounces of platinum, palladium, rhodium and gold, an industry measure known as 4E, by 2024, Platreef is one of three projects -- none of which are in production -- that if built will extend the success of Ivanhoe founder and Executive-Chairman Friedland in starting mining projects. He sold the Voisey’s Bay nickel mine in Canada to Inco Ltd. for C$4.3 billion ($3.8 billion) in 1996. In 2012 he relinquished control of the $6 billion Oyu Tolgoi copper-gold mine inMongolia to Rio Tinto Group.

Unemployment, Water

The unemployment rate in the area around Platreef is 40 percent and only 20 percent of homes have running water, according to South Africa’s statistics agency. That compares with national rates of 25 percent and 73 percent respectively.

Ivanhoe has a 64 percent stake in Platreef and a group led by Japan’s Itochu Corp. (8001) owns 10 percent. Yuji Hoshino, a spokesman for Itochu in Johannesburg, declined to comment.

Ivanhoe last month announced a transaction that would reserve a 26 percent stake for so-called black economic empowerment, in line with government regulations seeking to help make up for the discrimination against non-white South Africans in the economy before the end of apartheid in 1994.

Twenty percent will be held by a trust for the benefit of the 20 local host settlements in the community, where about 150,000 people live. Six percent will be split between black employees and investors.

Adequate Consultation

The deal is “in line with South Africa’s policies to correct the historical imbalances created by apartheid,” Ivanhoe said.

Three different groups set up by local residents, one of which is supported by the legal-support organization, Lawyers for Human Rights, say Ivanplats didn’t sufficiently consult with the entire community when it arranged to sell it a 20-percent stake in Platreef. The company says it pays a stipend to a chief in the area who the groups say helped rig elections to the trust set up to represent local interests. The chief, L.V. Kekana, didn’t answer three calls made to his mobile phone or reply to a text message seeking comment.

Fifteen of 20 settlements in the area participated in the elections, according to the company.

Ivanplats said it has adequately consulted with the community and doesn’t have an improper relationship with the chief. It held more than 150 meetings over 18 months to inform the community of the black empowerment deal, it said in an e-mailed response to questions on Oct. 7.
Fully Complied

“Ivanhoe Mines reiterates to Bloomberg the company’s foundational commitment to a culture of honesty, integrity, accountability and respect for the communities in which the company operates,” it said in a separate e-mail yesterday. “Compliance with the spirit of all laws, rules and regulations applicable to the conduct of the company’s business is important for Ivanhoe’s reputation and continues success.”

The community will own a stake that will be paid from future mine proceeds, it will carry no liability for any debt, and it will receive an 11 million rand annual donation until it starts receiving dividends, according to the company.

The Department of Mineral Resources on July 29 wrote to Ivanplats setting Sept. 3 as a tentative date for the mining right execution “subject to fulfillment of the conditions contained in the aforementioned granting letter,” according to a copy of the letter obtained by Bloomberg.
Bushveld Complex

Ivanplats completed the black empowerment, or BEE, deal and delivered the documents relating to it to the department on Sept. 4, according to a company letter to the department the same day.

The company said in the letter it had now “fully and finally complied with each requirement.” After having spent 2.3 billion rand on exploration, and with 143,000 rand in daily costs, the delays “could deter investors and result in an unwillingness on the part of investors to invest more funds into the development of the project,” it said.

Platreef plans to exploit part of the world’s largest platinum-bearing geological feature known as the Bushveld Complex. It’s next to Anglo American Platinum Holdings Ltd. (AMS)’s Mogalakwena mine, the biggest and most profitable mine owned by the world’s largest producer. When Platreef starts production in 2020, it’s projected to become the lowest-cost platinum group metal producer in Africa, according to the company. South Africa accounts for about three quarters of world platinum production.

 

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