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Tower Resources signs deal for Cameroon offshore oil block

Comments (0) Africa, Business, Latest Updates from Reuters, UK

YAOUNDE (Reuters) – Tower Resources plans to invest at least $43 million over seven years to explore for oil in a shallow-water block in Cameroon’s Rio del Rey basin, the company and Cameroonian officials said on Wednesday.

“Our entry into Cameroon marks a shift in our risk profile from frontier to proven basins and introduces an asset with existing discoveries into the Tower portfolio,” Tower CEO Graeme Thomson said in a statement.

The Africa-focused oil and gas exploration company has a 100 percent interest in the 119 sq km (46 sq mile) Thali block.

Under a production sharing contract signed in Cameroon’s capital Yaounde, an initial exploration phase will last three years with an option to renew for two subsequent two-year phases.

Tower has the option of relinquishing the block at the end of each phase, provided the agreed minimum work has been completed.

The Rio del Rey basin lies in the eastern part of the Niger Delta and has to date produced over 1 billion barrels of oil, with an estimated 1.2 billion barrels of remaining reserves, according to Tower’s website.

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Senegal’s growth to accelerate to 6 pct in 2016: IMF

Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Senegal’s economic growth will accelerate to 6 percent next year, boosted by a government development plan, increasing trade with neighbouring Mali and lower oil prices, the International Monetary Fund (IMF) forecast.

Senegal, one of West Africa’s most stable democracies, has secured billions of dollars in donor support for a development plan that aims to diversify the economy beyond fishing, agriculture and tourism, and double growth over the next decade.

“The economic outlook remains favourable with a rate of growth of above 5 percent in 2015 and of 6 percent in 2016,” Ali Mansoor, who headed a recent IMF mission to Senegal, said in a statement released late on Tuesday.

Inflation, which stood at 0.6 percent in August, is expected to remain low, and the government has set a 2016 fiscal deficit target at 4.2 percent of GDP, the fund noted.

“The mission emphasized that doubling and sustaining growth rates at 7 or 8 percent … will require maintaining a sound macroeconomic framework in addition to accelerating the reforms required to promote private investment,” the statement said.

 

(Reporting by Joe Bavier; Editing by Jussi Rosendahlm, Reuters)

 

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Kellogg to spend $450 mil to expand in Africa

Comments (0) Africa, Business, Latest Updates from Reuters, US

(Reuters) – Kellogg Co is setting up a joint venture with the African arm of Singapore’s Tolaram Group to bolster its breakfast and snack food offerings in West Africa.

Kellogg will also pay $450 million for a 50 percent stake in Lagos, Nigeria-based Multipro, a food sales and distribution company owned by Tolaram, with an option to buy a stake in Tolaram’s African unit.

Tolaram Africa Foods owns 49 percent of Dufil Prima Foods Plc, the maker of Indomie noodles, Minimie snacks, Power oil and Power pasta.

Kellogg said it intends to develop snacks and breakfast items for the West African market through the joint venture.

The world’s largest cereal maker will also get access to Multipro’s distribution network in Nigeria and Ghana, and potentially in the Dominican Republic of Congo, Ivory Coast, Cameroon and Ethiopia.

U.S. packaged food companies are increasingly looking to expand in emerging markets as customers in their biggest markets such as North America increasingly prefer cheaper private-label foods and cook more at home.

Kellogg acquired a majority stake in Egyptian biscuit maker Bisco Misr for $125 million in January.

Kellogg said it expects costs associated with the Tolaram deal to lower third-quarter earnings by 1 cent per share.

The company’s shares were down slightly in early trading on the New York Stock Exchange. Up to Monday’s close of $66.73, they had fallen 4.4 percent over the past 12 months.

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Congo’s president approves new oil code

Comments (0) Africa, Business, Latest Updates from Reuters, Politics

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KINSHASA (Reuters) – Democratic Republic of Congo President Joseph Kabila has approved a new oil code intended to impose order on a haphazardly regulated sector, according to a copy of the law seen by Reuters on Monday.

The code, which Kabila signed last month but has not yet been published online in the Official Gazette, contains no major changes from the text passed by parliament in June.

Some activists feared that Kabila would alter the text before signing, as he has sometimes done in the past.

The code imposes steep capital gains taxes and expands the state’s role in the sector though it leaves unanswered important questions about its implementation, including the criteria for exploration permits.

Congo pumps just 25,000 barrels of oil per day but hydrocarbons contribute close to half a billion dollars in annual state revenues. The government hopes exploration off the Atlantic coast and near its eastern border with Uganda will boost production.

The code, which replaces a 1981 law, institutes a minimum capital gains tax of between 35 and 45 percent on producers, a measure some analysts have said could deter investment.

The Anglo-French oil and gas company Perenco is Congo’s only oil producer. France’s Total and a company owned by Israeli billionaire Dan Gertler are exploring near Lake Albert, which straddles the border with Uganda.

Perenco’s director in Congo, Yvonne Mbala, was not available for comment. She had told Reuters after the bill was adopted that the company’s existing permits would be protected from new taxes in the code.

The law also stipulates that the state must hold at least a 20 percent stake in all hydrocarbons projects.

It introduces transparency measures, requiring public tenders for exploration and exploitation permits, and publication of the names of bidding companies.

Campaign groups have praised those rules but say they do not go far enough to stamp out corruption.

The law does not require the disclosure of beneficial ownership of investors and is vague about the management of a fund earmarked for future generations.

Other key provisions, including the criteria for selecting candidates for exploration and production permits, must be elaborated by the government, a process the hydrocarbons minister’s chief of staff, Jean Muganza, said was under way.

Muganza defended the law’s transparency safeguards, saying some groups would never be satisfied.

By Aaron Ross (Reuters)

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Burkina Faso presidential guard should be disbanded, panel says

Comments (0) Africa, Elections, Latest Updates from Reuters, Politics

OUAGADOUGOU (Reuters) – Burkina Faso’s powerful presidential guard should be dismantled, according to a commission charged with proposing reforms after a popular uprising toppled the West African nation’s longtime president.

The elite unit, known locally as the RSP, was a key pillar of President Blaise Compaore’s regime before mass demonstrations forced him to flee the country last October, ending 27 years of rule.

Its interference in the interim administration that followed Compaore’s ouster, including attempts to force the prime minister’s resignation of over his plans to reduce its size and pay, provoked further protests and prompted the authorities to call for a review of the RSP’s role.

In a report submitted to Prime Minister Yacouba Isaac Zida, himself a former commander in the RSP, the national reconciliation and reform commission on Monday described the 1,200 troop strong unit as “an army within an army”.

It called for the regiment to be broken up and its members redeployed within the framework of a broader reform of the military.

The commission said responsibility for ensuring the security of Burkina Faso’s president and state institutions should be conferred upon special units of the police and gendarmes.

A decision on the RSP’s future will most likely wait until after Oct. 11 elections when voters will choose a new president and parliament to restore democratic rule.

Burkina Faso’s army did not intervene to save Compaore when tens of thousands of demonstrators took to the streets to protest against the president’s attempts to push through constitutional changes to extend his rule.

However, the RSP has been accused by rights groups, including Amnesty International, of shooting and killing protesters during the uprising.

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China’s CNMC says it followed the law in closing Zambian copper mine

Comments (0) Africa, Business, Latest Updates from Reuters

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LUSAKA (Reuters) – China’s CNMC Luanshya Copper Mines followed Zambian law when it closed the Baluba mine and sent more than 1,600 workers on forced leave due to plunging prices and energy shortages, the company said on Monday.

Zambia had threatened to revoke Luanshya’s mining licence if the company did not reinstate workers.

A slide in global copper prices has put pressure on Africa’s second biggest producer of the metal, with export earnings depressed despite the kwacha’s slump against the dollar this year.

“As a law abiding corporate citizen, we have always followed the Zambian laws,” CNMC Luanshya Copper Mines spokesman Sydney Chileya said in a statement, adding that it did not plan to make employees redundant.

Those placed on forced leave would receive a monthly allowance and other entitlements such as medical cover, the company said.

Chileya said the entire Luanshya Mine would have collapsed within three months if the company had not suspended production at Baluba.

The Mine Workers’ Union of Zambia (MUZ) said on Saturday it would challenge the decision, which it alleged was made without consulting labour unions.

Glencore’s Zambian subsidiary Mopani Copper Mines, is in talks with the government and unions over plans to suspend its production, but a source close to the company said on Friday a large number of workers would be retained.

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Banks’ messaging system SWIFT’s growth in Middle East, Africa outpaces global rate

Comments (0) Africa, Business, Latest Updates from Reuters, Middle East

DUBAI (Reuters) – Growth in financial transactions messaging system SWIFT’s traffic volumes in the Middle East and Africa has accelerated by double-digit percentages this year as banks expand rapidly and non-financial institutions join the industry cooperative, said the regional head.

In the Middle East growth in the year up to the end of August was 12 percent, with double-digit expansion in Qatar and the United Arab Emirates helping offset a decline in Lebanon, Iraq and Libya, said Sido Bestani in an interview.

The data excludes Iran, which has been disconnected from the Belgium-based network since 2012 as a result of EU sanctions against the country.

Expansion in Africa in the past year was up 11 percent, led by Kenya, Ghana and Nigeria, Bestani said.

Average global SWIFT traffic growth so far this year is running at 10 percent. The Middle East and Africa represents more than 4 percent of total volumes, a level that should rise as both regions historically grow at a faster pace than the rest of the world.

Banks in the Middle East and Africa have been expanding both within and outside their borders in recent years. Through acquisitions, Qatar National Bank, the largest bank in the Gulf Arab region, has expanded into Egypt and several other African markets, while South Africa-based Standard Bank, Africa’s largest bank by assets, has built a presence in 20 countries including Nigeria, Angola and Mozambique.

In Africa, banks have been adding more clients in a country where the proportion of the population without a bank account totals as much as 80 percent in sub-Saharan Africa.

But Bestani said that drivers for business in the Middle East and Africa were different.

“We see more traction from some African communities,” said Bestani. “There is centralised decision-making, so for example the central bank of Ghana contacted us to ask if we can provide a service for complying with sanctions to all banks.

“In the Middle East we see less examples of supporting the community and more action at the level of individual banks and financial institutions.”

More non-financial institution companies are also joining. In the Middle East, around 50 such firms have joined, enabling them to handle cash management, trade and supply chain business through the system.

But SWIFT expects one of the main areas for future expansion to be the securities markets, where a lot of payments and settlement instructions are currently sent manually.

In the Middle East and Africa, including Turkey, payments represent 57 percent of information sent through SWIFT, with securities forming 30 percent of the total data. That compares with worldwide, where payments and securities roughly account for percent each of total data flow.

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Botswana’s first uranium mine targets 3.75m pounds output

Comments (1) Africa, Australia, Business, Latest Updates from Reuters

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GABORONE (Reuters) – Australian firm A-Cap Resources has applied for a licence to open what would be Botswana’s first uranium mine with a capital expenditure of $351 million, the firm said on Friday.

Botswana is estimated to hold around 1.04 billion tonnes in uranium reserves, in the central part of the country, and the government has issued prospecting licenses in the last decade although no production has taken place.

The exploration firm said results of technical studies showed the project would produce up to 3.75 million pounds of the ore in the first five years of its projected 18-year life.

The project was ideally located near roads, a railway network and power supply, the company said a statement, and was also on the site of one of the largest uranium deposits in the Africa, with estimated deposits of 261 million pounds.

A resurgent uranium price meant the project, where explorations started in 2006, was viable, the firm said.

Global uranium production had stalled recently due to depressed prices, curtailing exploration activities and the opening of new mines.

Spot uranium prices slumped over 12 percent in the past three quarters before bouncing back to a 5 month-high of $37.25 per pound in September.

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Glencore’s Zambia unit to keep most workers despite suspension

Comments (0) Africa, Business, Latest Updates from Reuters, UK

LUSAKA (Reuters) – Glencore’s Zambian subsidiary Mopani Copper Mines will retain most of its workers even after copper production is suspended following a drop on the metal’s price, a source close to the company said on Friday.

An electricity shortage in the southern African nation and weaker copper prices have put pressure on the mining industry, threatening output, jobs and economic growth in Africa’s second-biggest copper producer.

The source said Mopani was in talks with the government and unions over Glencore’s plan to suspend operations and invest to improve efficiency at the mine.

The president of Zambia’s largest mining union said the move by the government could help save thousands of jobs.

“Over the next 18 months, Mopani will invest $500 million in expansion projects. A large number of employees are expected to be kept for mine development and care and maintenance,” the source told Reuters.

“We want Mopani to be efficient and competitive in the global copper market. It will also extend the mine life.”

Mining and trading company Glencore said on Monday it would suspended dividends, sell assets and suspend some copper production at Mopani and its Katanga Mining division in Democratic Republic of Congo for 18 months.

Mopani is the second largest employer in Zambia after the government with about 21,000 direct and contract workers.

Mopani would offer workers at the mining firm voluntary separation packages in line with Zambian law after the talks with the government ended, the source said.

A second source said the company was talking to the government and unions, but job cuts had not be discussed.

“As far as we are concerned everything is normal. We are undertaking a study to optimise our production efficiency with the unions and the government. Until we conclude that study we can’t make any pronouncements,” the source at Mopani said.

Glencore, Vedanta Resources, China’s NFC Africa and CNMC Luanshya Copper Mine have all said they will shut down some operations in Zambia because of the harsh business environment.

Electricity shortages and the slide in copper have driven the kwacha currency to record lows amid a sell-off in commodity-linked currencies as China’s economy slows.

By Chris Mfula (Reuters)

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Glencore holds talks with Congo officials on Katanga mine

Comments (0) Africa, Business, Canada, Latest Updates from Reuters

KINSHASA (Reuters) – Glencore held talks with Congolese officials in Kinshasa on Thursday over the company’s plans to suspend some copper output at its Katanga Mining unit for 18 months, an adviser to the prime minister said.

The adviser, who asked not to be identified, said there could be an announcement by the mining ministry on Friday regarding the talks. A Glencore spokesman declined to confirm Thursday’s meeting.

The London-listed company said on Monday it planned to suspend 400,000 tonnes of copper output at Katanga and at Mopani Copper Mines in Zambia over the next 18 months.

“This is not a mine that is going to close. It’s just a moment when the copper price is very, very low,” said the adviser, referring to Katanga Mining. “When they sell copper they lose money.”

He said Glencore’s Mutanda Mining operation in Congo was a more efficient operation and did not face the same problems.

A Glencore source said the company would invest about $900 million in Katanga Mining to modernize it. This would bring the production cost per pound down from $2.50 to about $1.65 by time mine reopens in 2017.

By comparison, Mutanda Mining’s cost of production is around $1.33 per pound of copper because it is a newer mine, the source said.

The source declined to comment on potential job losses, saying discussions about employment continued.

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