Between 3,000 to 4,000 people were striking at Amplats’ Thembelani mine in Rustenburg, said an Association of Mineworkers and Construction Union (AMCU) spokesman, adding that at least 2,400 of them were being held down in the mine by colleagues.

“There is zero tolerance to any illegal actions which include intimidation, threats of violence and assault,” Anglo American Platinum said in a statement.

"Our protection services teams are on the ground attending to the situation. Management is currently engaging with recognized unions at regional and at head office levels to resolve the situation," it said.

AMCU and rival union the National Union of Mineworkers (NUM) have been in a bloody war for dominance at the mines that has resulted in violent strikes and assassinations.

The incident is the latest wildcat action to hit South Africa’s platinum belt. The country, Africa's largest economy, accounts for 75% of world PGM output.

The nation’s mining sector, which accounts for 6% of gross domestic product, has been repeatedly hit by disputes over low wages that reflect widespread anger over enduring inequalities in the economy.

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The report, the 10th review of global trends in the mining industry by PwC, shows the industry has entered a period where there is a "crisis in confidence" about miners’ abilities to control costs, deliver on promises and successfully cope with resource nationalization demands.

According to Mine 2013: A Confidence Crisis, the growing disconnect between the performance of the mining industry's share prices, commodity prices, and the broader equity markets continued last year.

Net profits dropped to $68 billion, a 49% decrease from 2011. In addition, market capitalization fell for 37 of the top 40 global miners, totalling a loss of over $200 billion.

Mining stocks fell slightly in the last year, but stocks have been hit in the first four months of 2013 with nearly a 20% decline. Meanwhile, shareholders are calling for change from the top, resulting in half of the CEOs at the 10 largest global mining companies being replaced since April 2012.

RELATED: Access to capital the top current challenge for the mining sector

In a statement yesterday, Steve Ralbovsky, US mining leader at PwC, highlighted that capital expenditures are being tightened because mining companies are trying to regain the market's trust.

Forecasted capital expenditures for 2013 have already been reduced by 21% compared to 2012, dropping to $110 billion. At the same time, project hurdle rates have increased with some of the top 40 companies, what leads PwC to forecast that only projects with a return above 25% will be pursued.

“Even with cost containment initiatives well-underway, a strategic, thoughtful approach to rebalancing capital spends should not have a negative impact on miners' ability to meet the continued demand for their products,” added Ralbovsky.

John Gravelle, mining leader for the Americas at PwC Canada, will be hosting a live web Q&A to discuss the confidence crisis miners are currently facing.

You can join the discussion today at 2 p.m. EST here.

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Gold took another hit early on Thursday, dropping more than a percentage point to $1,377 an ounce, though it recovered in the afternoon to close at $1,385.80.

The decline for the August futures contract follows some minor gains earlier in the week as investors decide what to make of a stronger US economy.

Reactions to lower unemployment numbers coupled with higher retail sales were behind Thursday's retreat for the precious metal, despite a weakened US dollar.

Although not the case this time, the dollar and gold usually move in opposite directions.

The possibility that the Fed will soon pull back on its policy of QE has investors reluctant to invest in gold. A tighter monetary policy could pull the metal down even further, as it would drive up the value of the dollar.

In general, gold has made gains through the era of quantitative easing, going from just over $800 in December 2008 to $1,909 in August 2011.

It has been an overall poor day for metals, as silver, platinum and copper also saw losses. Concerns over decreased demand in BRIC countries – Brazil, Russia, India and China – has taken its toll on base metals.

In contrast, oil saw some growth on Thursday, hitting $96.69 a barrel on the NYMEX – a 0.8% increase – despite China's announcement that it will curb oil consumption next year.

Creative Commons image by Mauro Parra-Miranda

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President Jacob Zuma said Wednesday he would push a hard line on labour disputes in the mining sector which have been causing uncertainty in the country’s economy, reports Reuters.

Addressing parliament, Zuma said people who commit crime in the name of labour relations would face the full might of the law and police have been given a no-tolerance directive.

Additionally, he said the government wouldn’t come between or take sides in the competition for members between the Association of Mineworkers and Construction Union and the National Union of Mineworkers.

AllAfrica.com reports that Deputy President Kgalema Motlanthe will meet Friday with business, labour and government representatives and ask them to avoid any crisis in the mining sector.

The government said the talks would look at what necessary action is needed to stabilize both the industry and the economy, as well as ensure that all parties abide by the law.

It also said it would step up the police presence in Rustenberg, where two mineworkers were killed in recent shootings.

Last year, during a labour strike at the Marikana platinum mine, 44 people were killed, many shot by police, which is now being probed by a judicial inquiry commission.

Image: ER24 EMS (Pty) Ltd., via Wikimedia Commons

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The document also sees a new risk enter the list this year: the threat of substitutes. For single commodity companies, or organizations where one commodity dominates the product mix/profit share, this has become a looming threat.

What’s more interesting, say experts at Ernst & Young, that risk’s ramifications are being felt most acutely across North America.

“Capital dilemmas are at the forefront of mining and metals executives’ minds,” says Bruce Sprague, Ernst & Young’s Canadian mining and metals leader. “Weaker metal prices, labour unrest and cost inflation have put pressure on companies’ earnings. At the same time, high levels of capital expenditure have squeezed margins and challenged the expected rates of return on growth projects.”

These challenges are threatening companies throughout the entire industry — both the majors’ long-term growth prospects and the short-term survival of cash-strapped juniors, adds Sprague.

“Majors now face the challenge of how best to allocate capital amid a new class of yield-hungry shareholders while juniors are attempting to navigate a capital desert — caused by the pullback of investors from riskier investments — not seen in more than a decade,” explains Sprague.

Companies are already reacting to these risks by focusing on greater capital discipline, increasing transparency around capital decisions and committing to maximizing returns and credit rating quality.

A pipeline of divestments is also building as companies seek to optimize their portfolios and recycle capital away from high-cost assets and into high-performing ones. Underperforming, high-cost or high-risk assets are also being marked for disposal as companies seek to remove costs and reallocate capital, as shows a separate study released on Wednesday.

“Today’s miners face the profound risk that their decisions could damage growth prospects, destroying shareholder value over the longer term,” concludes Sprague. “Those with a disciplined approach to capital allocation decisions and a broad knowledge of available funding options and providers — at both ends of the market — will be best positioned for success.”

The report also says junior miners, small firms exploring for mineral deposits worldwide, will continue to be cash strapped for at least another year, as the global mining industry slows down.

Top 10 strategic business risks in the global mining and metals sector in 2013:

1.        Capital dilemma – allocation and access (8 in 2012)

2.        Margin protection and profitability improvement (4)

3.        Resource nationalism (1)

4.        Social licence to operate (6)

5.        Skills shortage (2)

6.        Price and currency volatility (7)

7.        Capital project execution (5)

8.        Sharing the benefits (9)

9.        Infrastructure access (3)

10.     Threat of substitutes (new)

Image by Cybrain/Shutterstock.com 

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In a statement the billionaire-backed company said Marquez will work with various entities in the US and abroad to help Planetary Resources’ mission of extracting and exploiting raw materials from near-Earth asteroids.

"Peter brings a wealth of knowledge that will make Planetary Resources successful as we begin working closer with the US government and foreign partners," company co-founder and co-chairman Eric Anderson said.

The Bellevue, Washington- based firm, which counts Google execs Larry Page and Eric Schmidt among its investors, plans to mine asteroids for water, precious metals and other resources.

The company recently launched a crowd funding campaign to build and fly a space telescope for public use and, so far, the effort has raised $846,000 toward its $1 million goal.

Planetary Resources has seen competitors coming into sight since it was launched last year. A company called Deep Space Industries announced in January its plans to extract resources from space rocks, with a similar goal of spurring solar system exploration.

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The company said Platreef, located at the heart of the world's premier platinum producing region — the Bushveld Complex— is expected to produce copper, gold, nickel and platinum-group elements.

The Vancouver-based firm also revealed that, in conjunction with the mining right application, and in compliance with South African ownership requirements under the Mining Charter, the Platreef ownership structure had been modified to include a broad-based black economic empowerment (BBBEE) partner that would represent local communities, women, children and employees.

Under the Southern African nation's BEE (Black Economic Empowerment) policy all mines have to be 26% black-owned.

The BBBEE partner would acquire an interest in the Platreef project through a private company incorporated in South Africa, namely BBBEE SPV, representing the interests of the Platreef Communities Umbrella Trust, the Platreef Women's and Children's Trust and the Platreef Equity Participation Trust. Host communities directly affected by the Platreef project would be the initial beneficiaries of the Platreef Communities Umbrella Trust.

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Terrell I. Ackerman, vice president of corporate development for the company, will serve as interim CEO.

McAllister joined the company in 2001. The company was listed on the New York Stock Exchange during his tenure.

Brian Schweitzer, the company's chairman of the board, thanked McAllister for his service.

"Frank's commitment and dedication to the company's success is evidenced by Montana's position for continued growth and expansion," said Schweitzer.

"We at Stillwater will miss him and wish him all the best in his retirement."

Stillwater is the only significant primary producer of palladium in the Western Hemisphere.

Screen still of Frank McAllister from YouTube

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Cutifani, who took over from Cynthia Carroll in April, is fighting to turn the company around after a string of "bad acquisitions, soaring costs and poor labour relations at its giant platinum operation in South Africa."

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According to Eye Witness News, union leaders failed to reach an agreement with Lonmin regarding being recognized as the majority union, and have requested a meeting with the company for Monday. If no agreement is reached by Tuesday, AMCU said its members would down tools.

This would be the third strike this year affecting the platinum miner, which has said it will not tolerate further violence, as well as called for more police on the ground and the removal of weapons in the areas around its operations, Reuters reports.

As the annual wage bargaining season begins, authorities fear violence and strikes will increase and are said to be “seriously considering” the deployment of peacekeeping forces to maintain the order.

South Africa accounts for 75% of world PGM output. The country’s mining sector, which accounts for 6% of gross domestic product, has been repeatedly hit by disputes over low wages that reflect widespread anger over enduring inequalities in the economy.

Image from archives

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Workers at Lonmin's (LON: LMI) Marikana mine went on strike after a man believed to be a National Union of Mineworkers' (NUM) member was shot dead and another person was injured on Monday.

Under increasing pressure to find solutions, Oliphant met leaders of NUM and the Association of Mineworkers and Construction Union (AMCU) on Monday and plans to host more talks in the near future, according to a government spokesperson.

Tensions remain high as the AMCU has been successful recruiting NUM members and Lonmin employees into its ranks.

NUM is an ally of South Africa's ruling Africa National Congress (ANC).

Lonmin is one of the largest primary platinum producers in the world and the largest PGM producer with mines and refineries located in South Africa, and exploration that extends to North America, Australia and Southern Africa.

To read more, click here.

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About 3,000 employees didn't report for work at the No. 14 shaft on Monday in protest of the dismissal of one of their fellow workers, the company said.

Neither the Association of Mineworkers and Construction Union nor the National Union of Mineworkers have commented on the job action.

Implats, the world's second largest platinum producer, said in May that more of its mines are losing money as prices decline and costs rise.

Meanwhile, the South African government is considering bringing in peacekeeping forces to deal with ongoing tensions in the mining sector.

Image: Shutterstock.com

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The warning, reports iafrica.com, is a clear sign of an industry under siege, hit by a vicious union turf war and labour demands that has coincided with a global decline in commodity prices.

Peacekeeping forces are typically found in war zones, but the shooting at Lonmin’s (LON:LMI) mine on Monday, which cost the life of a union member, has highlighted a creeping crisis in South Africa’s mining sector. This problem became evident last year, when police killed 34 protesters also at Lonmin during an illegal wage strike.

And as the annual wage bargaining season begins, authorities fear the situation will get worse, impacting the already struggling economy and the country’s image.

“If there is a need to deploy that peacekeeping force, we have to do so in the mining sector as a whole," Oliphant was quoted as saying. "We can't take a chance that since it has not happened here, probably it is not going to happen."

Her comments came on the same day that newly merged commodity giant Glencore Xstrata (LON:GLEN) fired 1,000 workers across three of its chrome mines for an illegal strike last week that brought operations to a standstill.

South Africa accounts for 75% of world PGM output. The country’s mining sector, which accounts for 6% of gross domestic product, has been repeatedly hit by disputes over low wages that reflect widespread anger over enduring inequalities in the economy.

Image of peacekeeping forces by Sadik Gulec/Shutterstock.com

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Despite the ongoing labour stoppage, he added supplies to customers were not yet affected and that workers have until tomorrow to appeal their dismissal.

Last week the company said the miners, most of whom belong to the Association of Mineworkers and Construction Union (AMCU), stopped work in solidarity of a colleague, who they claim, was assaulted by a shift supervisor.

South Africa holds around 75% of the world's chromite reserves. Chromium is a material used to produce ferrochrome and a key ingredient for stainless steel making.

The strike at Glencore Xstrata comes amid a renewed wave of labour troubles that started in early May, when miners shut down platinum producer Lonmin PLC (LON:LMI) over a union dispute.

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The incident sent the company's shares diving almost 5% and has sparked fears of a repeat of last year’s violent unrest that left dozens dead and effectively shut down the country's platinum belt.

In a statement, Lonmin said work had stopped at all of the firm's 13 mining shafts due to "an illegal work stoppage."

"Employees have arrived at work but have not proceeded underground. The reasons for the stoppage are still not clear," it added.

Reuters reports Monday’s shooting happened at the NUM offices at Wonderkop community, near the town of Marikana, which is 120 km northwest of Johannesburg. The area is where police shot dead 34 miners in August 2012, considered  the country's deadliest police action since the end of apartheid.

The incident follows the killing of a leader from NUM's rival union, the Association of Mineworkers and Construction Union (AMCU), last month.

South Africa accounts for 75% of world PGM output. The country’s mining sector, which accounts for 6% of gross domestic product, has been repeatedly hit by disputes over low wages that reflect widespread anger over enduring inequalities in the economy.

Image from archives

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