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South Africa’s Sappi to invest $305 mln in North America and Europe

8 February 2017 Comments (0) Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African pulp and paper maker Sappi will invest $305 million in North America and Europe to increase its packaging capacity, the firm said on Wednesday after releasing its first-quarter results.

Sappi, which makes 50 percent of its sales in Europe and 27 percent in North America, is reducing its dependence on graphic and glossy paper and is diversifying into speciality packaging paper.

The company suffered from a fall in demand for glossy paper as tablet computers and e-readers eroded the traditional magazine industry and as retailers relied more on websites than printed catalogues.

Sappi will invest approximately $165 million in North America to upgrade a paper mill and $140 million in Europe over a three year period in a number of projects that will support its speciality packaging paper capacity.

“Our decision demonstrates our clear commitment to the consumer packaging market and our focus on maintaining our leadership in coated paper production in both North America and Europe,” Chief Executive Steve Binnie said in a statement.

Shares in Sappi were up 1.8 percent at 86.30 rand at 0712 GMT.

Sappi said first-quarter profit increased 20 percent to $90 million from $75 million a year ago due to greater sales volumes across all major divisions and higher prices for dissolving wood pulp.

Earnings per share for the period rose 23 percent higher to 16 U.S. cents from 13 U.S. cents a year earlier, while net debt fell by 23 percent to 396 million.

The firm expects to reduce net debt further this year.

“Based on current market conditions, we expect the group’s operating performance for the second quarter to be broadly in line with that of 2016”, Binnie said, citing the recent strength of the rand and further weakness in graphic paper demand and pricing in Europe and the United States.

 

(Reporting by Nqobile Dludla, editing by Louise Heavens)

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Botswana gets offer for struggling BCL mines

7 February 2017 Comments (0) Latest Updates from Reuters

GABORONE (Reuters) – Botswana’s high court agreed on Tuesday to delay the provisional liquidation of state-owned BCL Mine Ltd after lawyers representing the liquidator KPMG said they had received an offer to buy its mothballed mines, which produce copper and nickel.

While the lawyers declined to name the company making the offer, a source close to the process told Reuters a company from the United Arab Emirates had put forward an offer for the three companies under the BCL group.

“The minister is currently in the UAE negotiating for the sale of the BCL group,” said the source, who declined to be named as the matter was confidential.

The Minister of Minerals, Energy and Green Technology Sadique Kebonang posted on his Facebook page on Monday a picture of himself captioned: “In the UAE trying to save BCL.”

In a briefing in January, Nigel Dixon-Warren of KPMG said he would recommend to the courts that BCL be placed under final liquidation as its three subsidiaries were insolvent and the government had no money to finance operations.

Following the placement of BCL group under provisional liquidation in October 2016, Russia’s Norilsk took legal action against the mining group to recover $271.3 million it says it is owed for the sale of a 50 percent stake in the Nkomati JV in South Africa.

Apart from the Norilsk claim, BCL owes creditors including suppliers and banks around $85.41 million.

($1 = 10.5374 pulas)

 

(Reporting by Johannesburg Newsroom, editing by David Evans)

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Recession-hit Nigeria targets economy to grow at annual 7 percent by 2020

7 February 2017 Comments (0) Latest Updates from Reuters

ABUJA (Reuters) – Nigeria is targeting economic growth of at least 7 percent a year by 2020, the Ministry of Budget and National Planning said on Tuesday, a far cry from its current recession, the first in 25 years.

Nigeria’s economy is heavily dependent on exports of crude oil and is undermined by decades of endemic corruption, It has been hobbled by low global oil prices that have slashed government revenues and the availability of foreign currency.

In the third quarter of 2016, gross domestic product contracted 2.24 percent from a year earlier.

With inflation also at an 11-year high, frustration is rising, with protesters taking to the streets of Lagos on Monday to call for a change in government.

The 7 percent target for gross domestic product growth is part of a medium-term economic recovery plan that seeks to address some of Nigeria’s issues, the budget ministry said in a statement.

“Our goal is to have an economy with low inflation, stable exchange rates, and a diversified and inclusive growth,” Minister of Budget and National Planning Udoma Udo Udoma said at an economic forum on Monday, where he addressed private enterprise, according to the statement.

The plan’s priorities are agriculture and food security, energy, small businesses and industrialisation and stabilising the macroeconomic environment, the minister said.

“Nigerian growth faces various supply constraints including fuel, power, foreign exchange, and even business unfriendly regulation,” the statement said, adding that the recovery plan would seek to address these issues.

(Reporting by Camillus Eboh; Writing by Paul Carsten; Editing by Dominic Evans)

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Botswana’s growth to almost double as commodity sales rebound

7 February 2017 Comments (0) Latest Updates from Reuters

GABORONE (Reuters) – Botswana’s economy will grow by nearly double in 2017 compared to the previous year as Africa’s largest exporter of diamonds shakes off a slump in global commodity prices and electricity shortages.

In a budget speech to parliament on Monday, Finance Minister Kenneth Matambo said the economy would grow by an estimated 4.2 percent in 2017 compared with 2.9 percent growth in 2016.

However, the minister said the budget deficit would widen, to 1.43 percent of GDP from 0.7 previously, as government spent more on electricity and water infrastructure following a severe drought in the region.

“The optimistic outlook is based on the anticipated slight improvement in the mining sector and positive growth prospects for the non-mining sectors,” Matambo said.

The minister said revenues for the 2017/18 financial year were estimated at 57.2 billion pula ($5.5 billion), with customs collections accounting for 29.8 percent of revenues followed by minerals at 28.6 percent.

Matambo warned that slow recovery in the global economy and low commodity prices posed risks to the growth forecast.

An analyst at First National Bank Botswana, Moatlhodi Sebabole, said the investments in water and energy infrastructure were a positive step.

“The rise in expenditure is enough to support the growth projections but the key will be implementation of these projects,” Sebabole said.

Botswana, which celebrated 50 years of independence in 2016, is considered one of the continent’s most stable nations and boasts one of the highest rates of income per capita in the world.

The land-locked state has, however, struggled with weaker growth in recent times as mineral sales slowed, while electricity shortages have hurt mining.

($1 = 10.5042 pulas)

 

(Reporting by Johannesburg newsroom; Editing by James Macharia)

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Somalia presidential hopefuls make last vote pitch in first-ever TV debate

6 February 2017 Comments (0) Latest Updates from Reuters

By Abdi Sheikh

MOGADISHU (Reuters) – Presidential candidates in Somalia rounded off campaigning with an unprecedented televised debate on Monday, dominated by issues of corruption, security and U.S. President Donald Trump’s travel ban.

Somalia, which holds a presidential vote on Wednesday, is one of seven majority Muslim nations whose citizens were barred from travel to America under Trump’s executive order.

Many Somalis were sent back home or stranded at airports, until a U.S. judge put the ruling on hold.

“I will tackle the issue of refugees deported from the United States and other countries, and will settle internally displaced people,” Bashir Rage, one of several former warlords seeking election, said in the debate broadcast on TV and radio.

Wednesday’s presidential vote is part of the rebuilding effort in Somalia, which was shattered by more than two decades of conflict and where clan loyalties still tend to trump policy in politics.

“Somali clans have fought for many years so I will reconcile them so we have a government that will bring people together,” said candidate Mohamud Ahmed Nur Tarsan, a former Mogadishu mayor, promising to fight corruption and Islamist militants.

Candidates bidding for office in a race repeatedly delayed since August promised to improve security and the economy.

Most of the 23 hopefuls did not turn up for the debate, split between two sessions due to number of candidates. Voters complained that the debate was more of a question and answer session, that ignored people’s daily concerns.

Candidates were asked questions such as “why do you deserve to become president?” by a prominent journalist.

“I wish the questions were from citizens,” Ahmed Nur, from Baidoa, northwest of the capital, told Reuters.

President Hassan Sheikh Mohamud had been due to take part in the afternoon debate, but had still not turned up as it began. He is seeking a second term after more than four years in office during which time he has faced criticism from the public and Western donors about corruption.

Major Osman Mohamed, a military officer who like other soldiers complains about delayed wages, said: “The best questions, which I am sure our lazy president can’t answer, is how to solve corruption and insecurity problems.”

An insurgency by al Shabaab Islamist militants scuppered plans for each adult to have a vote, so Somalia’s 300 members of parliament will instead vote on the next president.

About a third of lawmakers, who were themselves picked by about 14,000 clan elders and regional figures, are loyal to the president’s Peace and Development Party, giving Mohamud an edge in the race but not enough to guarantee him victory.

 

 

(Writing by Edmund Blair Editing by Jeremy Gaunt)

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South Africa to publish contested mining charter by March – minister

6 February 2017 Comments (0) Latest Updates from Reuters

By Wendell Roelf

CAPE TOWN (Reuters) – South Africa will publish its revised Mining Charter by next month, a minister said on Monday, bringing closer legislation meant to redress racial economic inequality but which has concerned companies struggling with lower commodity prices.

A separate Mineral and Petroleum Resources Development Act will be finalised by June, proposing to give the state a 20 percent free stake in new energy projects and the ability to buy further shares.

The Mining Charter was introduced in 2002 to increase black ownership of the mining industry, which accounts for around 7 percent of South Africa’s economic output.

However, industry body the Chamber of Mines, has taken the government to court over ownership interpretations in the latest draft, which requires companies to keep black ownership at 26 percent even if black shareholders sell their stakes.

“We are not challenging the charter. We are fully supportive of the entire transformation journey, but we just need the rules to be absolutely clear to make sure we don’t end up making targets that are unobtainable but are pragmatic and realistic,” said Roger Baxter, chief executive of the Chamber of Mines.

In a separate court case, a local law firm is challenging the entire Mining Charter, arguing it is unconstitutional.

The new charter, which was revised in 2010 as part of a consultative approach to regulations, also requires companies to provide housing and other amenities in mining communities, many of which are mired in poverty and neglect.

“If government goes ahead and implements the charter in its current form it will be very unfortunate, because it would have a pretty dramatic effect on investment in mining in South Africa,” said Peter Leon, a partner at law firm Herbert Smith Freehills African practice.

South Africa is the world’s top platinum producer and has a significant gold industry but firms are struggling with depressed prices, rising costs and bouts of labour unrest.

“For investors, it goes without saying that regulatory certainty and the sanctity of private ownership under the constitution is paramount,” Anglo American Chief Executive Mark Cutifani told delegates at a mining summit in Cape Town.

Mining companies say they were not consulted in the latest draft but Minister of Mineral Resources Mosebenzi Zwane denied this and sought to reassure investors.

“We have consulted extensively with stakeholders,” Zwane said in a speech at the opening of the summit.

“We call upon investors to come to South Africa and engage us frankly as we move towards transformation of our economy. We will continue to have an open door policy.”

With rising unemployment, the ruling African National Congress is under increasing pressure to address gaping inequality that persists 23 years after the end of apartheid.

Black South Africans make up 80 percent of the 54 million population, yet most of the economy in terms of ownership of land and companies remains in the hands of white people, who account for around 8 percent of the population.

(Additional reporting by Zandi Shabalala, Ed Stoddard and Barbara Lewis; Writing by Joe Brock; Editing by James Macharia and Susan Thomas)

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Trading giant Glencore extends major Libyan oil deal: sources

6 February 2017 Comments (0) Latest Updates from Reuters

By Julia Payne and Ahmad Ghaddar

LONDON (Reuters) – Swiss-based commodities giant Glencore has extended a deal with Libya’s state oil firm to be the sole marketer of one third of the country’s current crude oil production, sources familiar with the matter said.

It was not clear for how long Glencore would continue to have exclusivity over the output and whether some parts of the deal would be renegotiated.

The deal extends Glencore’s dominance over rivals such as Vitol and Trafigura in handling barrels from the North African country for a second year running.

A spokesman for Glencore declined to comment. Officials at Libya’s state-owned National Oil Corp. (NOC) also declined to comment.

Libya has struggled for years to end a crippling blockade of its oil ports amid a civil war and Islamic State intrusions. Between security fears and erratic supply, refiners eventually stopped attempting to buy from the North African country.

With a dwindling revenue stream, NOC needed an intermediary that was comfortable managing the risks, able to market the oil globally and pay cash upfront for the cargoes.

Glencore snapped up the opportunity in September 2015 to resell the only relatively stable onshore output – from the Sarir and Mesla oilfields loaded at the country’s easternmost Marsa el-Hariga port. Libya’s small offshore production also continued.

Since 2015, the trader has been the only company able to buy Sarir and Mesla crude output directly from Libya’s NOC and is expected to continue as NOC has largely finalised its 2017 allocations.

Libya’s production has recovered to around 700,000 barrels per day (bpd) and NOC hopes output will rise to 1.2 million bpd by the end of the year.

“It is a big mosaic at the moment, but Glencore has kept a large chunk of the trade,” one of the sources said.

Glencore’s deal entitles it to around 230,000 bpd from the Sarir and Mesla oilfields, the sources added. It also regularly delivers crucial refined fuel as Libya’s refining system operates well below capacity. Glencore trades about 4.4 million bpd of crude and refined products.

Vitol and Petraco have also been picking up cargoes but on a small scale, and producers with stakes in oilfields in the country such as Total, Repsol, OMV have returned to loading tankers, as have buyers such as Unipec, the trading arm of China’s state-owned Sinopec.

 

(Additional reporting by Dmitry Zhdannikov; Editing by Mark Potter)

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Zimbabwe to double ferrochrome production to 300,000 tonnes

3 February 2017 Comments (0) Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe’s ferrochrome production is expected to double to 300,000 tonnes this year after the government allocated chrome concessions to small mining companies as part of efforts to boost output, the mines minister said on Thursday.

Walter Chidhakwa said last year the country earned $115 million from 149,000 tonnes of ferrochrome, which is used in the production of stainless steel.

Zimbabwe holds the world’s second largest deposits of chrome, which is smelted to produce ferrochrome. Raw chrome exports are expected to reach 550,000 tonnes from 285,000 tonnes, the mines minister told reporters.

“We are projecting 300,000 tonnes of ferrochrome for 2017 as a result of the measures we have taken in allocating the chrome concessions,” Chidhakwa said.

Zimbabwe is pushing large mining companies to give up part of their concessions for distribution to individuals and smaller mines, which has helped in the gold sector, where small scale miners have tripled output to over 8 tonnes since 2014.

The government has accused the two biggest ferrochrome companies of underutilising concessions and last April forced the biggest producer Zimasco, to give up half of its 46,000 hectares in mining claims.

Chidhakwa said the government was still negotiating with Zimbabwe Alloys, the second biggest producer, to also give up half of its mining areas.

 

(Reporting by MacDonald Dzirutwe. Editing by Jane Merriman)

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Nigeria takes bids for oil-for-fuel swaps of up to 800,000 bpd in 2017

3 February 2017 Comments (0) Latest Updates from Reuters

ABUJA (Reuters) – Nigeria’s state oil company received 128 bids from companies that want to exchange processed fuels for as much as 800,000 barrels a day of unrefined crude in 2017, it said on Thursday.

“This year’s programme for DSDP (direct sale of crude oil and direct purchase of products) is about 800,000 barrels (per day) at most,” Maikanti Baru, head of the Nigerian National Petroleum Corporation (NNPC), told reporters in Abuja after the bidding window had closed.

In exchange for the crude oil, Nigeria will take fuel with sulphur content of no higher than 50 parts per million (ppm), he said. Environment Minister Amina Mohammed has promised the country would require the 50 ppm level for imports from July 1.

Last year the OPEC oil producer had replaced crude oil swap deals with a system under which it will directly sell crude oil to refiners and purchase refined oil products from them.

Nigeria is almost wholly reliant on imported gasoline, kerosene and other petroleum products despite exporting 1.7 million barrels per day (bpd) of crude oil.

 

(Reporting by Paul Carsten and Camillus Eboh; Additional reporting by Libby George in London; Writing by Ulf Laessing; Editing by David Goodman)

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South Africa’s private sector expands at slower pace in January

3 February 2017 Comments (0) Latest Updates from Reuters

JOHANNESBURG, Feb 3 (Reuters) – Activity in South Africa’s private sector remained in growth territory in January but dipped from December as demand for exports sank, a survey showed on Friday.

The Standard Bank Purchasing Managers’ Index (PMI), compiled by Markit edged down to 51.3 from 51.6, remaining above the 50 mark dividing expansion from contraction for a fifth consecutive month.

“January’s expansion in economic activity extended December’s trend, further supporting the idea that domestic growth may have troughed,” said economist at Standard Bank Kuvasha Naidoo.

Companies surveyed reported a marginal increase in new business and output in January, but that was countered by a decrease in exports, with some firms citing the loss of major international contracts.

“Exports continued to suffer, recording an accelerated pace of contraction… This was while overall demand continued to expand, albeit at a slower pace,” Naidoo said.

Trade data published by the revenue service on Tuesday showed exports down 6.1 percent month-on-month in January, while subdued consumer and business confidence dampened imports as low activity continued to strangle growth in Africa’s most industrialised economy.

The South African Reserve Bank (SARB) last week lowered its economic growth estimates to 1.1 percent for 2017 and 1.6 percent for 2018.

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