The Ugly Face of Canadian Capitalism

Canadian mining corporation Kinross Gold recently suspended work at its Tasiast mine in Mauritania  to protest against an instruction from its government to desist from employing ‘expatriates’ who  had no permission to work at the mine.

Union officials complained about the gap in pay between locals and foreigners. “There are 2,600 Mauritanian workers employed by the firm of whom 1,041 are permanent, costing the company $36 million, while there are 130 expatriate employees who cost $43 million,” workers’ spokesperson Bounenna Ould Sidi told AFP. Further irritating its Mauritanian staff, Kinross mostly houses ‘expatriate’ managers outside the country, in the Canary Islands. As with many other Canadian mining companies in Africa, Kinross has paid the country little and was accused of corruption.

On three occasions over the past five years the mineworkers have withdrawn their labour in a bid to force the world’s fifth biggest gold mining company to respect previous commitments to improve their pay and conditions. In 2011 the local workforce was angered by the company’s refusal to transfer seriously ill employees to the capital Nouakchott. When Kinross laid off 300 workers at the end of 2013 the union claimed it was done in violation of the country’s labour law and that one of those dismissed was still receiving medical treatment for a workplace injury. Demanding government action, the laid-off workers protested outside the presidential palace in Nouakchott 300 km away. After a multi-day sit-in the police raided their makeshift camp, arresting a dozen and injuring a similar number.

In 2010 two Tasiast employees were arrested after dumping toxic waste in an inhabited area near the mine. There was no independent environmental assessment of the multibillion-dollar mine and the Toronto-based company failed to certify Tasiast under the International Cyanide Management Code, a voluntary agreement that allows companies to demonstrate their commitment to properly manage the poisonous substance.

Allegations of bribery have been swirling around Kinross’ Mauritania operations for years. Late 2015 the US Department of launched an investigation into “improper payments made to government officials” at Kinross’ operations in Mauritania and Ghana. MiningWatch Canada and French anti-corruption association Sherpa submitted a long report detailing allegations of bribery and corruption to the RCMP and called for the police force to investigate Kinross’ apparent breaches of Canadian anti-corruption laws at its Mauritanian and Ghanian mines. Adding to the Mining Watch/Sherpa report, France’s Le Monde quoted a former member of the company’s African legal department saying, “the level of corruption was becoming grotesque.”

In March of this year the Globe and Mail revealed that Kinross gave a US $50 million contract to a French/Mauritanian partnership even though their bid wasn’t the lowest. The Mauritanian company was owned by a former top government official and an internal Kinross document noted the company “took into consideration the stated preference of officials of the Government of Mauritania that the logistics contract be awarded to” the French/Mauritanian consortium.

When President Mohamed Ould Abdel Aziz criticized the company’s meagre payments to the treasury in 2013, Kinross reportedly hired a couple of his cousins to important positions. A 2013 Africa Mining Intelligence article detailed the close familial and political ties between Kinross and Aziz, who came to power by overthrowing the country’s first elected president in 2008.

Canadian ruthless multinational bullies workers, ignores environmental standards and ‘buys’ politicians.

http://dissidentvoice.org/2016/07/the-ugly-canadian-kinross-gold/

Canadian Colonialism

With a mere 0.5 percent of the world’s population, Canada is home to half of all internationally listed mining companies operating in Africa. Many companies based have even taken African names. African Queen Mines, Tanzanian Royalty Exploration, Lake Victoria Mining Company, African Aura Resources, Katanga Mining, Société d’Exploitation Minière d’Afrique de l’Ouest (SEMAFO), Uganda Gold Mining, East Africa Metals, Timbuktu Gold, Sahelian Goldfields, African Gold Group and International African Mining Gold (IAMGOLD) are all Canadian. Active in 43 different African countries, Canadian mining firms have been responsible for dispossessing farmers, displacing communities, employing forced labour, devastating ecosystems and spurring human rights violations.

Canadian companies loot (legally and illegally) African resources. Canadian mining companies have been accused of bribing officials and evading taxes. Last year TSX-listed MagIndustries was accused of paying $100,000 to tax officials in a bid to avoid paying taxes on its $1.5-billion potash mine and processing facility in Congo (Brazzaville). In April, a Tanzanian tribunal ruled that Barrick Gold organized a “sophisticated scheme of tax evasion” in the East African country. As its Tanzanian operations delivered over US$400-million profit to shareholders between 2010 and 2013, the Toronto company failed to pay any corporate taxes, bilking the country out of $41.25 million.

Canada’s paternalism towards Africans is deeply rooted in its  political culture.  Gripped by a desire to rid “darkest Africa” of “nakedness” and “heathenism”, Canadian missionaries helped the European colonial powers penetrate African society. In 1893 a couple of Torontonians founded what later became the largest interdenominational Protestant mission on the continent and by the end of the colonial period as many as 2,500 Canadians were proselytizing across Africa. Today, all the media-anointed Africa “experts” promote a similarly paternalistic version of ‘aid’ and largely ignore Canadian companies’ role in pillaging the continent’s wealth.

Recently, the Aga Khan Foundation Canada organized the World Partnership Walk in 10 cities across the country. In an article titled “How the World Partnership Walk” lets Canadians bring hope to African communities the organization’s International Development Champion, Attiya Hirj, writes about visiting Aga Khan Foundation and Global Affairs Canada sponsored projects in Tanzania and Mozambique. Hirj says her “trip really opened my eyes to what rural communities truly need, which is a sense of hope.” She suggests the situation can be remedied if enough Canadians come “together to fundraise and generate awareness through activities such as the World Partnership Walk.” There is no mention of the need for African resources to be controlled by and for Africans. Canadians concerned about African impoverishment should point their fingers at the Canadian firms controlling the continent’s resources and offer solidarity to those sisters and brothers fighting for African resources to be controlled by and for Africans.

http://dissidentvoice.org/2016/06/while-canadian-companies-exploit-african-resources/#more-62922

The caprice of the capitalist market

On the back of the start of iron exports in 2011, Sierra Leone became one of Africa's fastest growing economies. Growth soared from 6 percent in 2011 to over 20 percent by 2013.   The government hoped that rising tax returns from mining would give it resources to tackle high unemployment and rebuild infrastructure devastated by Sierra Leone's 1991-2002 civil war. Instead, the economy will contract by 12.8 percent this year as mining revenues dry up, according to the International Monetary Fund. Iron ore exports have plummeted from 4.1 million tonnes in the first quarter of 2014 to 1.8 million in the same period this year, according to the International Steel Statistics Bureau. London Mining, which operated Sierra Leone's Marampa mine, went into administration in October, citing debt, high costs, low iron ore prices and an outbreak of Ebola.

"Life has never been the same for me since I was laid off," says Abdul Kanu who said he was a casUal labourer at one mine. "We just went to work in November and we were told to go home! I've still not recovered from the shock". 

A 60 percent slump in iron ore prices over the past year, amid a slowdown in Chinese consumption, has brought a bonanza that had been expected to last 60 years to a screeching halt. Piles of iron ore and rusting railway wagons in the deserted stockyard at the port of Pepel bear silent witness to a crisis engulfing Sierra Leone's mining industry and threatening others across West Africa. Across the region, dozens of mining projects that attracted investors when iron ore hit $190 per tonne in 2011, have either stalled or been abandoned as prices hover around $60 With analysts saying prices may stay low for years, it could sound a death knell for West Africa's iron ore industry.

At the height of the commodities boom last decade, West African countries became magnets for miners seeking untapped iron ore, diamonds, gold, bauxite and other minerals. In Pepel, locals anticipated an economic surge for their civil war-ravaged country when London-listed firm African Minerals started shipping ore four years ago from its Tonkolili mine. Discovered in 2008 and lying some 200 km (124 miles) to the northeast, Tonkolili is one of the world's largest iron ore deposits. The iron ore slump hit debt-strapped African Minerals hard. Prices fell below its high costs, forcing it to shut operations in November, and it went into administration in March after failing to repay its partner, China's Shandong Iron and Steel Group.

BHP, the world's largest mining company, and rival Rio Tinto are locked in a battle to become the lowest-cost iron producer, cranking up output from mines in Australia as they seek to squeeze competitors out of the market. Paul Gray, iron ore analyst at research firm Wood Mackenzie, said supply from West Africa could fall from 25 million tonnes this year to zero by 2017 if the market conditions persist. Most West African projects require a long-term price well above $100 per tonne to achieve an acceptable return, he said. BHP and Rio have average iron ore costs of around $20 a tonne in Western Australia and are cutting that further.

In current market conditions, it looked unlikely that Australian firm Sundance Resources' Mbalam mine in Cameroon would get developed or even the massive Simandou project in Guinea, in which Rio Tinto holds a stake, Gray said. "It is not looking good, it is looking worse by the day," Gray said. "Those projects which were looking shaky beforehand are now well and truly dead."

Hunter Hillcoat, analyst at bank and asset manager Investec, said there was scant incentive for Western companies to risk capital developing expensive and risky projects in West Africa given that the iron ore market remained in oversupply. "I think it's is dead until the next decade or even longer," Hillcoat said, saying projects in Congo Republic, Cameroon and Gabon were likely to remain frozen. "There was a lot of potential in the area, just there wasn't the right infrastructure."

Colin Hamilton, head of commodity research at Macquarie, explained, "In a world where Chinese steel production growth has slowed to low single digits there is no need for new iron ore supply."

The Alternative Mining Indaba

Africa, with a population of 1.2 billion people, holds about a third of the world's mineral resources, according to the African Development Bank (AfDB). The continent produces a tenth of the world's oil and two-thirds of its diamonds.

Of Africa's 54 countries, 24 rely on a select few mineral products to generate more than 75 per cent of their export earnings, the AfDB found. In Botswana, for example, nearly 45 per cent of government revenues come from mining, while natural resource exports account for 25 per cent of revenues in the Democratic Republic of Congo, a report from the International Council on Mining and Metals (ICMM) showed.

The war criminal and well paid advisor to dictators, Tony Blair, addressed 7000 delegates (all who had paid the 23,000 rand a ticket) of the Mining Indaba. Did he know that rather than investors, actual mining workers were holding an Alternative Mining Indaba which had 300 delegates attending.  At a march to the Mining Indaba on the summit’s first day, placards summed up the range of issues at stake: “Stop polluting our water.” “Africa is not for sale!” “Our mineral resources, our future!” “It’s not development when the environment is being destroyed.” “No to tax dodging!”

In 2002, a young man called Fortunate Siziba was walking home in Mapanzure, Zimbabwe, at night when he fell into an open, unsecured, un-lit pit previously used for chrome mining. The pit was 17 metres deep. Siziba was left partially blind. In 2012, nine-year-old Asa Mpofu fell into an open, unsecured, un-lit chrome mining pit in the same area. She drowned. In neither case was any compensation paid by the chrome mine operators, or even an apology given. The most assistance that Siziba received from the mine operator was to be transported “in the bucket of a front-loader” to a nearby clinic. The Alternative Mining Indaba, people are angry. What emerges from the Alternative Mining Indaba is not solely a simplistic picture of mining companies being bad and local communities being good. The failure of African governments to protect the interests of their people is also cast into stark relief.

“We are not anti-development,” Southern Africa Green Revolution’s Matthews Hlabane said. “We are anti-development we don’t understand.”

Southern African Resource Watch’s Georges Bokundu summed it up most flatly in a presentation on the second day, with regards to the situation in his home country: “Mining copper, gold has brought no development to DRC. Only more conflict.”

“Development” at all is something of a contested term in these circles – promised by mining companies, yet often failing to materialise in the way governments or communities hope. Part of the problem is how little say communities are generally granted into what mining companies do around them. Mining legislation in South Africa and other countries demands that mining companies produce Social and Labour Plans – SLPs – which should lay out their plans for how they will contribute to socio-economic development around the mine. As the Legal Resources Centre’s Wilmien Wicomb pointed out, however, these are generally kept secret from the communities – who then have no way of knowing whether mining companies are sticking to whatever they promised in order to win their cherished mining rights. This lack of information also affects community-members concerned about the environmental impact of mines.

Lawyer Gilbert Makore, of the Zimbabwean Environmental Law Association, said that “most communities have never seen an environmental impact assessment report”. Even if they are granted access to such a report, the language is often highly technical, and often in English only. Corruption occurs between some environmental consultants, too, who produce copy-paste reports for different mines. Even when such consultants are not corrupt, Makore said, they can “go in, hold one meeting with a local leader, and then pass that off as community consultation”.

In Kankoyo, Zambia a major copper mine, and the resulting mining activities have had a “devastating impact” on their environment, Soil can now only support the growth of mango trees and small plants. Residents complain of respiratory problems. Houses have developed cracks in the walls ranging in size from relatively small to big enough to allow two people to shake hands. The soil erosion which results from mining leaves the house foundations unsupported, he explained. In 2012 the community presented their problems to the mining company. They discovered that in terms of the agreement signed with the Zambian government, the mine was exempted from environmental liability. There is little doubt that governments do not do enough to ensure that environmental or social contracts are stringently adhered to by mining companies.

South African mining minister Susan Shabangu was receiving annual reports from Lonmin, was aware that the mine was failing to live up to its socio-economic obligations in the Marikana area, and took no action for a long time. The Bench Marks Foundation’s Hassen Lorgat said that there was a tendency among certain conservative media pundits, government and corporations to see what happened at Marikana as an “aberration” – an unpredictable event spawned by union conflict – to avoid discussing ”corporate neglect of workers, abuse of power and privilege of exploiting our mineral resources”. In Lonmin’s own 2011 Annual Report they had already identified risks including “poor community relations due to internal and external factors that could result in civil unrest”.

Zama-zama, or illegal miners, are continuously vilified and criminalized. Mention of the zama-zama has recurred throughout the summit in tones of outrage or concern about their criminalisation – as if “legitimate” mining activity can only be undertaken by European and North American mining corporations. One delegate summed up what seemed to be a widespread sentiment: It’s like when Europeans kill endangered animals and they call it hunting, but when Africans do it they call it poaching.

DRC: Inga 3 Dam 'High Risk Project'

Even though only 9 percent of the DRC population has access to electricity, the power generated by Inga 3 will primarily benefit mining companies and export markets

Today, the World Bank Group's Board of Directors approved a grant of US$73.1 million for the Inga 3 Dam on the Congo River – the biggest hydropower project the World Bank has ever funded. International Rivers denounces the decision as support for a risky mega-project that will not benefit the local population.

The 4,800-megawatt Inga 3 Dam is the first phase of the giant Grand Inga scheme in the Democratic Republic of Congo (DRC). Including the financing costs, Inga 3 will cost $14 billion. The Bank’s $73 million grant will finance technical studies and legal work to prepare for the construction of the dam, which is expected to start in 2016 and take seven years. Even though only 9% of the DRC population has access to electricity, the power generated by Inga 3 will primarily benefit mining companies and export markets.

Rudo Sanyanga, Africa Director of International Rivers, said: “By approving Inga 3, the World Bank shows it has not learnt lessons from the bad experience of previous dams on the Congo River despite its claims to the contrary. The Bank is turning a blind eye to the DRC’s poor governance and is taking short-cuts to the environmental assessment of the project.”

Peter Bosshard, Policy Director of International Rivers, said: “Solar, wind and micro-hydropower are more effective at reducing energy poverty in Africa, and don’t suffer the cost and time overruns that are typical for large dams. We will continue to push the World Bank and the DRC government to support clean local energy solutions rather than Africa’s next white elephant.”

On March 10, four researchers from Oxford University published a study which found that the large dams built since 1934 suffered average cost overruns of 96% and delays of 44%. In a conversation with International Rivers, the Oxford study's co-author, Atif Ansar, cautioned against Inga 3. "It is a very high-risk project typical of dam disasters," he said. Using the findings of the Oxford study to forecast cost overruns, he suggested that Bank's $14 billion estimated cost of Inga 3 should be uplifted to $28 billion to obtain 80% certainty that the budget is not exceeded. Given the cost risks, the dam is a non-starter in terms of economic viability. Congo is at risk of drowning its fragile economy in debt.

From here