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January 16, 2019

#Venezuela, #Turkey using #Gold to evade U.S. #Sanctions @MiamiHerald

Venezuela, Turkey using gold to evade U.S. sanctions | Miami Herald

Turkey has plenty of experience helping others evade sanctions...

"Following the improved relations between Turkey and Venezuela, the embattled Maduro government decided to move gold refining from Switzerland to Turkey to avoid the risk of Venezuelan assets being seized in following a possible U.S. sanction. Against this backdrop, Venezuela exported 23.62 tons of gold worth $900 million to Turkey in the first nine months of 2018."

"Venezuela argued that the gold exported to Turkey would ultimately return to become part of the Venezuelan Central Bank's portfolio of assets. However, official Turkish records do not show any gold exports back to Venezuela in 2018."

"spikes in the gold trading between Turkey and the United Arab Emirates after Venezuela's gold export have drawn attention. It is possible that the Turkish government is sending the gold to UAE that they imported from Venezuela and turning it into liquidity."


Venezuela, Turkey using gold to evade U.S. sanctions

Almost three years ago, Reza Zarrab, an Iranian-Turkish gold trader, was arrested at Miami International Airport by FBI agents. Zarrab was accused of executing "gas-for-gold" transactions with Iran, which helped Tehran circumvent U.S. sanctions intended to halt its nuclear program. He pleaded guilty and decided to cooperate with the U.S.

Shortly after, U.S. officials also arrested Mehmet Hakan Atilla, the deputy chief executive officer of Turkey's state-owned Halkbank in New York, on related charges of Iran sanctions evasion. Atilla was found guilty on Jan. 3, 2018, of conspiring to violate U.S. sanctions law.

Now, the Treasury Department is currently considering whether to impose financial sanctions on Halkbank for its involvement in circumventing U.S.-imposed sanctions on Iran through a gold-for-gas scheme.

While Turkey faces major fines for allegedly violating U.S. sanctions on Iran, President Recep Tayyip Erdogan appeared to launch a gold trade with a new partner from the list of the countries facing U.S. sanctions. It seems that the similar scheme to evade sanctions on Iran will be repeated.

Following the improved relations between Turkey and Venezuela, the embattled Maduro government decided to move gold refining from Switzerland to Turkey to avoid the risk of Venezuelan assets being seized in following a possible U.S. sanction. Against this backdrop, Venezuela exported 23.62 tons of gold worth $900 million to Turkey in the first nine months of 2018.

This transaction between the two countries presents some serious issues. First, the lack of transparency on both sides makes this trade suspicious. Venezuela argued that the gold exported to Turkey would ultimately return to become part of the Venezuelan Central Bank's portfolio of assets. However, official Turkish records do not show any gold exports back to Venezuela in 2018.

Beyond that, the spikes in the gold trading between Turkey and the United Arab Emirates after Venezuela's gold export have drawn attention. It is possible that the Turkish government is sending the gold to UAE that they imported from Venezuela and turning it into liquidity.

Moreover, Turkey has recently started to supply the basic products for Venezuela's government-subsidized food program CLAP, appearing to create a gold-for-food mechanism between Ankara and Caracas.

The statement of U.S. official Marshall Billingslea, Assistant Secretary of the Treasury, also seems to confirm this possibility. "We have seen 21 metric tons or more that have gone to Turkey in recent months, and we have seen Turkish companies replace many of the food companies that were involved in corruption related to the CLAP food boxes program."

Suffice it to say, a vast bribery and corruption mechanism that would benefit government officials of the two countries may play an important role as it was witnessed in the case of Iran. Given the existence of expanded pro-government networks and state-sponsored patronage in both countries, it would not be wrong to claim that the personal gains of individuals within the Turkish and Venezuelan governments may be pushing this gold trade.

More important, Ankara's eagerness to trade gold with Venezuela came at a time when Washington exerted more diplomatic pressure to isolate the Maduro regime. A new executive order has recently been signed by the White House to impose sanctions targeting Venezuela's gold sector by prohibiting U.S. citizens and entities from financial involvement in the trade.

As the Trump administration imposes further financial sanctions that limit the Maduro government, the focus remains on Turkey - a NATO ally - whether the sanctions will do anything to alter its policy toward Venezuela. However, it seems that the Turkish government appears to be determined to move relations with isolated Venezuela forward. During his recent visit to Venezuela, Erdogan said that "Turkey is on Venezuela's side. We do not approve of these measures that ignore the rules of global trade. … Commercial restrictions and sanctions are mistaken."

Ankara now is looking for the ways to dodge U.S. sanctions, taking advantage of a collapsed, cash-strapped Venezuela to do lucrative business. But, the Trump administration might not tolerate Erdogan's enthusiasm to keep the Maduro regime afloat through the gold trade.

This being the case, Erdogan's trade would likely result in costs and risks well out of proportion to whatever he might gain from Venezuelan gold. His gold passion amid U.S. isolation efforts is set to trigger adverse scenarios and create major ramifications for U.S.-Turkey relations in the foreseeable future.

Imdat Oner is a Ph.D. student in International Relations at Florida International University. He previously served for two years in the Turkish Embassy in Caracas, Venezuela as deputy head of mission and political officer.

See the piece online here: https://www.miamiherald.com/opinion/op-ed/article224594180.html
 


January 9, 2019

Rapid advance of #mining #digitalisation will change the way mines operate

Forces of disruption to shape the future of mining says analyst

Forces of disruption shaping the future of mining

mining

The rapid advance of mining digitalisation will change the way that African mines operate.

This requires careful consideration of the impacts of this change, Deloitte African energy and resources leader Andrew Lane tells SASCHA SOLOMONS.

"Technology in the mining space is more to do with innovation than just technical innovation. We need a step change in operational and safety performance, and therefore there is an imperative to use technology," starts Lane.

This article first appeared in Mining Review Africa Issue 12 2018

"Technology in the mining space is more to do with innovation than just technical innovation. We need a step change in operational and safety performance, and therefore there is an imperative to use technology," starts Lane.

There is disruption coming in the mining industry. Electric vehicles are coming faster than expected.  Cars are moving from steel to aluminium, and airlines from aluminium to carbon fibre.

The mining industry needs to be agile in an uncertain environment.  If mining companies don't have their processes under control, a step change is difficult.

He explains that the digital age is set to disrupt the lives of individuals, communities, but particularly organisations. Mines are no exception to this rule, with far-reaching implications and important opportunities.

Mines on the African continent need to be cognisant of both the impending digital changes to their business, and of the impact of those changes to the societies in which they operate.

However, it's important to note that this revolution is not only about technology - because people are still needed to make a business work. The nature of work changes and how people behave  and interact with the technology changes and one needs to be very aware of that and how you help the organisation evolve from one profile to another.

Uncertainty about adopting digital approaches can also be alleviated by focusing on solving specific business problems such as production rates, safety, efficiency and predictability.

Towards digital mining

According to Monitor Deloitte Philip Raw and strategy and operations Jan-Adriaan du Plessis, mining operators today across commodity types and across the world are facing the combined challenges of declining ore grades and operating efficiency.

Responding to such challenges is particularly difficult in the mining environment given significant variability encountered in ore bodies and operations.

This is compounded by costly and capital intensive infrastructure requirements, distant planning horizons and lengthy implementation timelines, not forgetting the inherent danger in the operating environments and subsequent critical safety considerations. Mines have thus felt constrained and uncertain as to how to improve.

Lacking real visibility and access to accurate, complete, timely data or business options they struggle to make meaningful, transformative changes to their businesses.

The result is a reactive response with inadequately informed decisions; with mines continuing to follow the approaches of old – sweating their remaining assets and working harder for smaller gains.

"With the low hanging optimisation fruit gone, the innovation focus rests now on two stages: firstly step-change innovation to address current challenges; thereafter in the second stage the focus shifts to possibilities of the future mine."

Artificial intelligence

Lane points out that one very obvious digital change in mining is the adoption of Artificial Intelligence (AI), which is through big data analytics, the collection of clean usable data, in a format that can be readily used for predictive analytics. Better decisions come from full, accurate and on-time data.

Mine operating management systems collect data, store it and allow quick analysis and reporting through real-time dashboards for quicker informed decision making for optimisation, inventory, and real time on downtime analysis

Lane puts forward that AI will have a significant impact in the medium term or even in the short term because it allows mines to work very quickly with very large data sets.

It will have an impact on jobs and the type of skills required. At a macro level it won't necessarily impact employment negatively because mines are competitive and should open up more mining opportunities, keeping mines in business for longer and grow the mining sector. It also increases companies' ability to survive during commodity down cycles.

"AI is a technology that also allows investors to see beforehand how operations should perform and what problems may arise, which in turn could increase investors' interests in projects," adds Lane.

At a micro level there will be individuals that are doing jobs today that won't be able to do the jobs of tomorrow. AI will also impact specific communities and how social spend is used and how it affects those communities.

However, Lane mentions that it is still early in the digital era and it is going to be a gradual adoption as more and more mines go down the digital route.

The future of work

Belinda Booyens and Frik Snyman from Deloitte's human capital consulting division highlight that the continued rise in operating costs and complex ore bodies that have an impact on safety and the health and well-being of employees are putting pressure on mines to think differently about how they should operate.

Mines are also working with a younger workforce that expect career progression and growth, and continuous legislative changes forces mines to rethink how technology will enable them to be more efficient, effective and compliant.

Digital technologies are changing the way of work in the following three areas:

  • Work: The type of work that people will do in the future
  • Workplace: The structure and practices that enable people to create value in the future
  • Workforce: The portfolio of workforces, people and machines, on balance sheet and contingent workers and crowds

"With the move towards digital mining, a significant impact is anticipated from the Fourth Industrial Revolution (4IR) on the constitution and collaboration of the workforce, as local expertise and manual processes give way to global connectivity and technological augmentation."

Dangerous, labour-intensive extraction processes will transition to safe, remote monitoring of equipment. Digitised processing will change the number of mining personnel required as well as the nature of their skillsets. Workforce mobility and flexibility will better align the timing of needed skills with the remuneration structure of those employees.

You can read the full digital magazine here or subscribe here to receive a print copy




January 7, 2019

MainStreet is Super Bullish On #Gold. What Happened Last Time they were this Bullish?



Sentiment among traders has turned openly bullish on gold, Anna Golubova writes.

Kitco’s latest Wall Street versus Main Street gold survey revealed that Main Street might be overly bullish on gold prices this week, with nearly 80% of individuals polled saying they expect gold prices to rise after briefly hitting the $1,300 mark last week.

Last time Main Street was this bullish was April 12, when 84% of individuals polled called for higher prices.  That was one day after gold prices had peaked on April 11 at $1,385.40, with futures beginning their prolonged decline that lasted roughly until mid-October. February Comex gold futures were last trading at $1289.60, up 0.30% on the day.

“Most veteran market watchers know the old saying that most of the  general investing public is wrong on their notions of markets’ price  direction most of the time. The fact that ‘Main Street’ is so bullish on gold prices at present does suggest the gold market has the potential a significant downside correction soon,” Kitco’s senior technical analyst Jim Wyckoff said.

Other analysts pointed out that such bullish sentiment coming from Main Street is a sign that gold is finally looking ready to break through its psychological resistance of $1,300 an ounce.

Are we in store for another decline in gold just around the corner?

See the article on Kitco:  Is Main Street Overly Bullish On Gold? And What Does That Mean For Prices? | Kitco News


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