Frikkie's pics for 2015
ACL
HAR
LON
Am I reading the Net Asset value's right?
Seven of Harmony’s 12 mines are losing money and it will gradually close three of its largest if cost cuts don’t make them profitable by year-end, Briggs said.
The industry is stuck in a “time warp”, said Bruce Williamson, a former mine engineer who helps manage R2bn at Imara Asset Management in Johannesburg. “Every time they tried to innovate, it would prove too difficult and too costly so they fell back on the low-cost, low-skill model.”
The problem is that low-cost mining is getting more expensive. Remuneration costs jumped 60% in the seven years to 2014 even as the number of employees dropped 30%, according to the Chamber of Mines.
The two largest unions have rejected an offer to raise basic pay from about R6 000 a month and the National Union of Mineworkers (NUM) has declared a dispute. A mediation process will start on September 14 and the NUM has said it can’t rule out a strike.
Without an agreement, South Africa’s gold industry will continue its decline, according to AngloGold’s Venkatakrishnan.
“What you’ll see is companies cutting short the life of mines,” he said