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April 12, 2016

Fortune Hunters Endanger #Africa’s Abandoned #Mines @wsj

Illegal miners across Africa are clambering down mining shafts closed by some of the world’s biggest producers, fueling dystopian conflicts between companies waiting out a commodity rout and poor villagers, creating an environment of desperate scavengers and extreme lawlessness. 


Fortune Hunters Endanger Africa’s Abandoned Mines

Artisanal miners outside a gold-mine tunnel in the Democratic Republic of Congo, in a 2104 photo.ENLARGE
Artisanal miners outside a gold-mine tunnel in the Democratic Republic of Congo, in a 2104 photo. Photo: Kenny Katombe/Reuters
By
Fortune seekers across Africa are clambering down gold shafts closed by some of the world’s biggest miners, fueling dystopian conflicts between companies waiting out a commodity rout and poor villagers with little to lose. 
The result is a chaotic and often deadly tableau playing out deep underground across the mineral-rich continent. Dozens of miners have been killed in subterranean gunfights over turf ceded by mining companies, many of whom fear the collateral damage to shaft walls and winches could make it impossible to open them again.
In Ghana, AngloGold Ashanti Ltd., the world’s No. 3 gold producer, closed shafts at its Obuasi mine in late 2014, as the mine hemorrhaged cash amid sinking metals prices. Early this year, hundreds of men broke through the 13-mile fence around Obuasi and started hunting for gold there on their own.
One artisanal miner, Borin Rufus, said he needs the work even though he knows it is illegal. In a good month, he earns about $1,000 to support his family of seven, more than twice what he was making by legally mining deposits just beyond Obuasi’s perimeter.
“There are no jobs and no other means of survival, ”said Mr. Rufus, who leads a group representing illegal miners picking over Obuasi’s ore. Some of the group’s members are licensed to prospect near the mine, but he acknowledges that a majority aren't, due largely to costs associated with acquiring a license.
The incursions of illegal miners into mothballed sites are another costly headache for an industry struggling to right itself as a global commodities rout decimates their profits. Some of the world’s largest miners, including Glencore PLC and Anglo American PLC, are shedding jobs and operations across the globe. 
Now, prospectors are invading the sites many of these companies are leaving behind, especially gold mines, creating an environment of desperate scavengers where it isn’t uncommon for gunfights to erupt thousands of feet underground. South African police in September found the bodies of 15 illegal miners who had been shot during a three-day turf war at a mine east of Johannesburg.
To be sure, violence at mines on the continent isn’t new or restricted to abandoned shafts. In August 2012, a wildcat strike that started at the world’s No. 3 platinum producer Lonmin PLC’s Marikana mine in South Africa left dozens of people dead. Illegal miners in the country, who are called zama zamas, which is Zulu for “those who try their luck,” sometimes slip into shafts that are in operation at the country’s biggest gold producer Sibanye Gold Ltd., as well as others.
Authorities in Tanzania are battling to control an influx of illegal miners, the numbers of whom has more than doubled over the past five years. Over the past two years, 103 miners have died in accidents at artisanal mines in Tanzania, compared with just two at large-scale operations, the country’s minerals ministry says. Tanzania’s largest miner, Acacia Mining PLC, has cut more than a quarter of its workforce to counter rising costs.
In the Democratic Republic of the Congo, illegal mining has spread from the embattled Kivu region to the mining stronghold of Katanga, where as many as 150,000 illegal miners now work alongside larger industrial operations.
Still, “we believe we can coexist with AngloGold Ashanti,” said Mr. Rufus, whose group broke into AngloGold’s Obuasi mine in Ghana earlier this year. In March, the company relinquished about two-thirds of its Obuasi license area that it deemed not worth mining to the government, which can then hand out licenses to artisanal operators as it sees fit.
But coexistence sometimes devolves into violent clashes: In February, AngloGold’s head of corporate affairs in Ghana, John Owusu, was killed during a confrontation at the mine.
While Mr. Owusu and others were inspecting holes in Obuasi’s fence, some illegal miners gathered on a nearby hilltop and hurled rocks at him and his companions. Others brandished machetes. 
Mr. Owusu was runover as he tried to flee in the ensuing mayhem. AngloGold subsequently withdrew 175 nonessential employees from the site.

April 1, 2016

What'd happen if everyone invested 2% of money in #gold?

What'd happen if everyone invested 2% of money in gold
It would mean a shift of $1.5 TRILLION. For some context, this would represent over 12X last year's production, and over 9X total yearly demand... globally.

Here's what would happen if institutional investors put 2% of their money in gold

gold barGetty Images/Michael Gottschalk

Institutional portfolio managers control a lot of money. Lots and lots of money. And their allegiance is not to any particular asset class or sacred-cow portfolio theory. They're in business to safeguard and grow their clients' money.

To that end, we've already started to see the embers of interest in gold from this elite fraternity of market movers.

So, think about what would happen if they decided security markets were too volatile, or bonds too insecure, or currencies too unstable, or central bankers too indecisive, and moved just 2% of their assets into gold.

How much can you buy with $1.5 trillion?

This table from Towers Watson shows the assets under management (AUM) from the 500 largest asset managers in the world.

Check out how much money would be allocated to the sector if just 2% of those assets were moved into gold, and the amount of gold needed to meet this new demand...

goldHard Assets Alliance

If just 2% of global financial assets under active management were to seek a new home in gold, it would mean a shift of $1.5 trillion. For some context, this would represent over 12 times last year's production, and over 9 times total demand... globally.

That would be a space-mission-sized shift, "Gold market, we have a problem." There isn't anywhere near this amount of gold available for investment. Not even close.

Even if our assumption is off by 1,000% and just one-tenth of this dollar amount headed into gold, it would still soak up every ounce of gold mined worldwide last year.

And as big-league fund manager Dan Tapiero points out in this interview, fund managers are indeed likely to direct some of their assets into the gold market. Risk is higher in virtually every major component of the economy—stocks are vulnerable, real estate looks lofty, subpar growth is pervasive, deflation is persistent, and perhaps most troubling is that the Fed and other central bankers are running out of tools to turn things around.

Forget the debate about how much money portfolio managers might move into gold. The issue is simply about when they will begin the process in earnest. Because once they do, even a small allocation would upset this tiny industry. And that would have a major implication on the gold price.

Read the original article on Hard Assets Alliance. Buy precious metals through the SmartMetals® platform. Buy and sell physical precious metal online through https://www.hardassetsalliance.com/smart-metals/, and store it with our non-bank vaulting partners in the US, Singapore, Zurich, London, and Sydney. Get started now! Copyright 2016. Follow Hard Assets Alliance on Twitter.

#SaudiArabia to Sell Stake in #Aramco by 2018 #MasterEnergy

Saudi Arabia plans to sell a stake “of less than 5 percent” in the parent of its state-owned oil company, the kingdom’s deputy crown prince said, revealing details of a listing that could make it the world’s biggest publicly traded firm.
In an interview in Riyadh, Prince Mohammed bin Salman said his advisers were working on a plan to offer shares in all of Saudi Arabian Oil Co. rather than just some of its refining subsidiaries. Saudi Aramco, as the world’s biggest oil exporter is known, would be listed on the domestic stock exchange as early as 2017 and no later than 2018, said the prince, the king’s son and second in line to the throne.

“The mother company will be offered to the public as well as a number of its subsidiaries,” the prince, who heads Aramco’s supreme council, told Bloomberg in a five-hour conversation.

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