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Congo drops objections to Ivanhoe Mines’ copper deal

23 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters

kamoa copper mine

KINSHASA (Reuters) – Democratic Republic of Congo’s government supports Ivanhoe Mines’ $400 million sale of a stake in its Kamoa copper mine to China’s Zijin Mining, it said on Tuesday, dropping earlier objections to the deal.

The sale is a pre-requisite for the development of Kamoa, which is thought to be the world’s largest untouched high-grade copper discovery. A feasibility study on the Kamoa project is expected at the end of next year.

In a statement, mines minister Martin Kabwelulu and portfolio minister Louise Munga Mesozi added that Ivanhoe had agreed to sell an additional 15 percent stake in the mine to the government, which currently controls five percent.

The government said in June that Vancouver-based Ivanhoe’s sale in May of a nearly 50 percent stake in the copper project in southeastern Congo to Zijin for $412 million should be suspended until concerns over the purchase of its own stake were addressed.

It was not exactly clear what the government’s objections were, although industry sources said they wanted guarantees on their own stake first.

The conditions of the sale to the government still needed to be finalized in a contract with Ivanhoe subsidiary Kamoa Holding Limited and the mine, the statement said.

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South Africa considers building refinery to process Iranian crude

22 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, Middle East

JOHANNESBURG (Reuters) – South Africa is considering building an oil refinery that will process Iranian crude to bolster its petrol supply and reduce its dependence on foreign companies, a government official said on Tuesday.

Plans for the new refinery were being “conceptualised” Tseliso Maqubela, the deputy director general for petroleum and petroleum products regulation at the energy ministry, said. He could not estimate the cost or time frame for construction.

Pretoria has said it will resume oil imports from Tehran “tomorrow” if sanctions are lifted but without its own refinery, it would have to rely on foreign oil companies who own refineries in Africa’s most developed economy.

A landmark pact clinched on July 14 between Iran and the United States, Germany, France, Russia, China and Britain will limit Iran’s nuclear programme to ensure it is not put to making bombs in exchange for a removal of economic sanctions.

Before sanctions, Iran was the biggest oil supplier to South Africa, the continent’s second-biggest crude consumer, importing around 380,000 barrels per day (bpd).

Iran and the ruling African National Congress (ANC) share strong diplomatic relations, with Tehran backing the party that helped liberate South Africa from white minority rule. Iran was one of the first countries to resume trade with Pretoria after democratic elections in 1994.

“There are benefits to owning a refinery, basically the profits are re-invested in the country and outflows can be controlled,” said Maqubela.

“But most importantly you are able to protect your own sovereignty…we could not bring Iranian crude oil during the sanctions, even though the U.S. gave us an exception, because we did not have a facility where the crude could be refined.”

South African refineries were designed to refine Iranian crude but were refitted to process other types of oil after the sanctions.

“We believe it’s better to have a technology partner, a partner who will bring the financing and then a partner that can bring crude oil,” he said without naming specific partners.

Deputy Energy Minister Thembisile Majola said last Thursday South Africa was considering using Iranian oil for its new refinery which will add to the existing gas-to-liquid plant run by state-owned PetroSA.

Maqubela said the energy ministry was considering using a refinery planned, but not yet built, by PetroSA in the industrial port of Coega but that the eventual refinery may take another form and name or be located in a different region.

South Africa’s blueprint for growth and development, launched in 2012, gives the government until 2017 to develop new refinery plans to cope with growing fuel demands.

(by By Peroshni Govender, Reuters)

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Nigeria central bank cuts reserve ratio to boost liquidity

22 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s central bank kept its benchmark interest rate on hold at 13 percent on Tuesday but loosened monetary policy by cutting banks’ cash reserve ratio to 25 percent to ease liquidity shortages, governor Godwin Emefiele said.

The vote to cut the cash reserve requirement from 31 percent was by 7 to 3 votes of the monetary policy committee, he said, adding that the committee had voted unanimously to keep the main rate unchanged.

Liquidity on the interbank market has dried up since authorities last week forced commercial banks to move government revenue to a Treasury Single Account (TSA) at the central bank, part of a drive by President Muhammadu Buhari to fight graft.

“No organisation has been exempted from the TSA,” Emefiele said, denying Nigerian press reports about alleged exemptions.

He warned Nigeria might slip into recession next year unless measures were taken to boost growth in Africa’s biggest economy. A sharp fall in oil revenues has whacked public finances, delaying public salary payments and putting pressure on the naira.

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Bouygues, Movenpick to invest 55 million euros in luxury hotel in Abidjan

22 September 2015 Comments (0) Africa, Business, Europe, Latest Updates from Reuters

abidjan

(Reuters) – French company Bouygues and Swiss group Movenpick will team up with Ivorian firm Saprim to invest 55 million euros ($61.56 million) on a luxury hotel in Ivory Coast’s commercial capital, the firms said on Monday.

Work on the new five-star hotel will begin in the next six months and is expected to be ready within 30 months, or by the end of 2018, according to a statement by the three companies.

“The cost of the hotel is around 55 million euros of which most will be financed by Saprim and Bouygues,” said Jean-Gabriel Peres, chief executive officer of Movenpick hotels and resorts.

Four years after the end of a civil war, economic powerhouse Ivory Coast’s coastal city of Abidjan is booming and its hotels are often fully-booked.

The hotel and tourism sector currently accounts for 4.8 percent of Ivorian GDP versus 0.6 percent in 2011.

(By Ange Aboa, Reuters)

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Diamond jewellery sales rise to record in 2014: De Beers

21 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Diamond miner De Beers said global diamond jewellery sales grew by 3 percent last year to a record of over $80 billion, helped by strong demand in the United States, but warned 2015 will be tough for the industry.

De Beers said sales of polished diamonds rose 7 percent in the United States, while demand in China and India grew by 6 percent and 3 percent in local currency terms, respectively.

“Growth would have been almost five percent had it not been for the strengthening of the U.S. dollar against the currencies of several of the major diamond consumer markets in the latter part of 2014,” De beers said in a report.

The company, a subsidiary of global miner Anglo American, warned growth would be muted in 2015 as the strong dollar and an economic slowdown in China weigh.

De Beers chief executive Philippe Mellier said many industry participants started the year with more inventory than planned due to weak demand for diamond jewellery at the end of 2014.

“This led to a period of ‘indigestion’ in the diamond value chain and as a result we expect 2015 as a whole to be a more challenging year,” Mellier said.

De Beers said global rough diamond production fell by 3 percent in volume terms in 2014 to about 142 million carats, remaining well below the 2005 peak of around 175 million carats.

The company said expected output from expansion projects currently under way in the sector would lift total carat production to levels similar to the mid-2000s.

 

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Sudan’s finance ministry scraps subsidy for wheat imports

21 September 2015 Comments (0) Africa, Business, Politics

Khartoum (Reuters) – Sudan has scrapped a special U.S. dollar/Sudanese pound exchange rate used for wheat imports, effectively removing a subsidy, the finance ministry said on Monday.

The subsidy removal is part of a government plan to liberalize wheat imports during a time of low global wheat prices, allowing the government to save money on importing wheat while also avoiding politically-sensitive price hikes.

The rate changed from 4 Sudanese pounds to 6, bringing it in line with the official exchange rate.

(more…)

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Ibe Emmanuel Kachikwu Takes on Corruption at Nigeria’s State Oil Company

18 September 2015 Comments (0) Africa, Featured, Latest Updates from Reuters, Politics

nigeria oil

by Enu Afolayan, Contributor

The President of Nigeria, Muhammadu Buhari, is committed to fighting corruption in his country. On June 26th, immediately after being elected, he ordered the dissolution of the board of the Nigerian petroleum company NNPC. Nigeria extracts two million barrels of crude every day, which makes it the largest producer of black gold in Africa. By attacking the petroleum sector, Buhari made a brave attempt to solve the country’s most serious mismanagement and corruption problem.

In 1970s, Buhari was the Minister of Oil and oversaw the birth of the NNPC. Corruption began to spread in the corporation as early as 1978, when it failed to repay the Treasury of Nigeria. Now, the “Father of the NNPC” is determined to put an end to the widespread corruption. He appointed Ibe Kachikwu as the new head of the petroleum corporation to take on this challenge.

Kachikwu arrived at the helm of NNPC right after the publication of an independent analysis by the Resource Governance Institute (NRGI). The analysis unveiled that over $32 billion in oil revenue was lost by Nigeria due to money laundering at the NNPC.

(more…)

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Ghana’s Cocobod signs $1.8 bil loan for 2015/16 crop purchases

18 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters

ACCRA (Reuters) – Ghana’s cocoa regulator signed a $1.8 billion loan with international banks on Thursday to finance purchases for the 2015/16 season, its spokesman said.

Ghana is the world’s second-biggest producer of cocoa and this year’s syndicated loan, signed in Paris by some 23 lenders, will be used to purchase around 850,000 tonnes, Cocobod spokesman Noah Amenyah said.

Lead arrangers for the facility, the largest soft commodity deal in sub-Saharan Africa, were Barclays Bank, Commerzbank, Deutsche Bank, French investment bank Natixis and Japan’s Sumitomo Mitsui Banking Corporation.

Amenyah said the loan was oversubscribed by 44 percent to $2.6 billion but Cocobod took only $1.8 billion as originally planned at 1.19 percent over eleven months. Cocobod raised $1.7 billion from a similar syndication a year ago.

“Once again, the syndication was oversubscribed and it shows the increasing confidence of the lenders in Cocobod’s management and its operations,” he said.

Inflows from the loan, to be drawn in early October, are expected to help boost the central bank’s reserves in support of the local cedi currency, which is currently down around 26 percent, Amenyah said.

Deputy chief executive James Kutsoati said Cocobod hopes to open the new season on Oct 2 after closing the current season at the end of September.

Ghana is experiencing a poor cocoa harvest this year with output down 23 percent from last year due to harsh weather and poor farming practices.

Purchases hit the 700,000 tonne-mark in late August and it appears the country will miss its revised 750,000 tonne-target as the crop year draws to a close this month.

(By Kwasi Kpodo, Reuters)

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“Don’t panic,” Nigerian central bank head urges banks

17 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, Politics

ABUJA (Reuters) – Nigerian central bank Governor Godwin Emefiele ruled out on Thursday a naira devaluation and told people not to panic about the government shifting its bank accounts to the central bank, a move that would drain billions of dollars from the financial system.

In an interview with Reuters, Emefiele said he was ready to inject liquidity if needed into the interbank market, which dried up this week following a directive to government departments to move their accounts into a “Treasury Single Account” at the central bank.

The policy is part of new President Muhammadu Buhari’s drive to fight corruption, but analysts say it could suck up as much as 10 percent of banking sector deposits in Africa’s biggest economy – hammering banks’ liquidity ratios.

Amid confusion over implementation of the policy, overnight interbank lending rates spiked to 200 percent this week, but Emefiele denied the policy had provoked a liquidity crisis.

“There is no shortage of liquidity,” he said, pointing to an oversubscribed sale of treasury bills on Wednesday. “A spike is a momentary action. It’s sentiment,” he said.

Emefiele said less than one trillion naira ($5 billion) would be moved into the single account but did not give details.

Emefiele was also emphatic about maintaining the naira currency – which has dived in the past year due to a collapse in oil revenues – at its current level of 197 to the dollar.

“There will not be a devaluation because right now the currency is appropriately priced,” he said.

In a series of unconventional interventions to protect the naira, the bank has blocked access to foreign currency to import items ranging from soap and toothpicks to cement and private jets.

Emefiele said the list of restricted items could be expanded to encourage local production.

He rejected claims by Nigerian firms about the difficulties of getting hold of dollars and ruled out the possibility of a default by any company with dollar-denominated debt.

(By Julia Payne and Ulf Laessing, Reuters)

 

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Mali’s economy to slow on softening manufacturing: IMF

17 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters

DAKAR (Reuters) – Mali’s economic growth is set to slow this year to 4.9 percent, because of weakening manufacturing output, despite a strong harvest, the International Monetary Fund (IMF) said on Wednesday.

The Fund said in a statement following its annual Article 4 consultation on Mali’s economy that inflation would also remain moderate at around 2.4 percent this year, up from 0.9 percent last year.

“After an unusually strong growth performance in 2014, when the real gross domestic product (GDP) grew by 7.2 percent, growth in 2015 is expected to be around 4.9 percent, in line with its historical trend,” said Christian Josz, IMF mission chief, in a statement.

“The harvest is turning out well, but manufacturing output weakened in 2015,” it said.

The IMF signed a $46.2 million Extended Credit Facility with Mali in December 2013, and it said the programme targets for end-June were met thanks to prudent management of government finances.

Mali, a major exporter of gold and cotton, had been embroiled in a conflict between its government and Tuareg separatists in its north. Although a peace deal was signed in June, mediators have struggled to enforce it.

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