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South Africa’s Gold Fields ties up with Canada’s Asanko in Ghana

Comments (0) Actualites, Africa, Business, Mining

JOHANNESBURG (Reuters) – South Africa’s Gold Fields will buy a near 50 percent share of Asanko Gold Inc’s Ghana subsidiary and take a stake in the Canadian miner in a $202.6 million deal announced on Thursday.

Investors were cautious, questioning whether the African joint venture would make a return any time soon and sending Gold Fields’ shares down nearly 6 percent, in an already weak bullion sector.

Gold Fields said in a statement that as well as acquiring half of Asanko Gold Ghana’s 90 percent interest in the Asanko Gold Mine, its Ghana subsidiary will also acquire associated properties and exploration rights in the African country.

Shares in Goldfields fell more than the broader bullion sector – which was down 2.8 percent – tumbling 5.9 percent to 46.01 rand by 0858 GMT.

“There’s always some execution risk, they are buying these things but can they actually make money out of it, is what the market is asking,” said Cratos Capital equities trader Greg Davies.

The deal includes an upfront payment of $165 million on closure of the transaction and a deferred payment of $20 million. Gold Fields’ subsidiary will also take a 9.9 percent stake in Toronto-listed Asanko for $17.6 million in a share placement.

The South African miner said the $203 million deal fitted in with its strategy to improve its portfolio by lowering all-in costs and extending mines’ lifespans to enhance cash generation.

Asanko, which is expected to produce 253,000 ounces of gold annually from 2019 to 2023 with a life-of-mine of at least 15 years, also has the potential to make further discoveries, Gold Fields said.

“The Asanko joint venture will give immediate access to low cost production ounces, increasing the quality of the Gold Fields’ portfolio,” the South African miner said.

(Reporting by Tanisha Heiberg and Nqobile Dludla; Editing by Susan Fenton)

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Djibouti plans new container terminal to bolster transport hub aspirations

Comments (0) Actualites, Africa, Business, Economy, Infrastructure

ABIDJAN (Reuters) – Djibouti is in talks with French shipping company CMA CGM to develop a new container terminal at an initial cost of $660 million as part of the tiny African country’s bid to expand into a sea and air transport hub for the continent.

Aboubakar Omar Hadi, chairman of the Djibouti Ports and Free Zone Authority (DPFZA), told Reuters on Tuesday that the authority hopes to award the concession in July. It was also prepared to buy out DP World’s stake in an existing container terminal to end a row with the Dubai port operator and avoid arbitration, he said.

Djibouti’s strategic location has led the United States, China, Japan and former colonial power France to build military bases there.

Its ports already serve as an entry point for cargo which is then sent by smaller vessels to ports along Africa’s eastern coast, but it is now seeking to become a sea-air transshipment hub for the entire continent.

To do this, Hadi said DPFZA was also planning to construct a $350 million airport and expand Air Djibouti’s fleet of cargo aircraft.

The new container terminal project could break ground as early as September with construction expected to take 24 months, Hadi said, speaking on the sidelines of the Africa CEO Forum in Abidjan, Ivory Coast.

“We are going to build DICT, Doraleh International Container Terminal. This is a new plan,” he said. “We are in discussions with CMA CGM.”

The port authority was not in talks with any other potential partners, he said. CMA CGM did not immediately respond to a request for comment.

Once operational, Hadi said the port terminal would boast an annual capacity of 2.4 million twenty-foot equivalent units (TEU), but subsequent expansion phases would bring that up to 4 million TEUs.

Fifteen percent of the project’s cost will be financed through equity. Of that, the DPFZA will contribute 85 percent, with its concession partner providing 15 percent. The rest will be raised via international institutions and banks.

“We are targeting trans-shipment,” Hadi said.

 

DP WORLD DISPUTE

Meanwhile, Hadi said the port authority was ready to end a dispute with DP World over its cancellation of a concession contract for another facility, the Doraleh Container Terminal, by buying out DP World’s 33 percent stake.

Djibouti ended the contract with the Dubai state-owned port operator last month, citing a failure to resolve a dispute that began in 2012.

DP World has called the move illegal and said it had begun proceedings before the London Court of International Arbitration, which last year cleared the company of all charges of misconduct over the concession.

“We are prepared to pay them their 33 percent of shares,” Hadi said. “There is no need for arbitration. We are going to buy their shares.”

 

(Reporting by Joe Bavier; Additional reporting by Gus Trompiz in Paris; Editing by Aaron Ross and Susan Fenton)

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South Africa’s Q1 business confidence rises 11 points to 45

Comments (0) Actualites, Africa, Business, Economy, Leaders, Politics

(Reuters) – South Africa’s business confidence rose in the first quarter by 11 points in a sign that the country’s economy is picking up pace, a survey showed on Wednesday.

The Rand Merchant Bank (RMB) business confidence index compiled by the Bureau for Economic Research rose to 45 points in the first quarter from 34 points in the fourth quarter but remained below the 50-mark separating the net positive and negative territories.

“First quarter confidence jump is driven more by the expectation that the recent (mainly) market-friendly political development will boost activity levels in future than an immediate improvement in the real economy,” chief economist at RMB Ettienne Le Roux said.

Business confidence was dented by policy uncertainty under the leadership of Jacob Zuma but economists say President Cyril Ramaphosa’s election as leader of the ruling African National Congress in December, and as president last month, has raised expectations that the country will make economic reforms.

South Africa’s economy grew more than expected at the end of last year as agriculture and trade recovered, data showed last Tuesday, boosting its chances of avoiding a potentially debilitating credit ratings downgrade.

Earlier in the month, The South African Chamber of Commerce and Industry’s (SACCI) monthly business confidence index (BCI) fell to 98.9 in February from 99.7 in January as exports, imports and retail sales fell.

“It goes without saying that the current uncertainty around land reform needs to be resolved as quickly as possible. If allowed to linger, the latest rise in the RMB/BER BCI (Business Confidence Index) could easily fizzle out with little or even no enduring positive impact on business capital expenditure and the economy at large,” Le Roux added.

 

(Reporting by Rahul B and Justin George Varghese in Bengaluru; Editing by Matthew Mpoke Bigg)

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Shell, Eni preempt any U.S. probe over Nigeria with filings

Comments (0) Actualites, Africa, Business, Economy, Europe, Leaders, Oil, US

LONDON (Reuters) – Oil giants Royal Dutch Shell and Eni have voluntarily filed to U.S. authorities internal probes into how they acquired a giant field in Nigeria as the companies seek to fight corruption allegations in Europe and Africa.

The filings, to the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), do not mean U.S. authorities are investigating Shell or Eni.  The move shows the companies are trying to preempt questions from the United States as they face one of the oil industry’s biggest-ever graft trials in Italy, to begin in May in Milan, a pending trial in Nigeria and an investigation in the Netherlands.

The case revolves around the purchase of a huge block off oil-rich Nigeria, known as OPL 245, which holds an estimated 9 billion barrels in reserves.

Italian prosecutors allege that bribes were paid in an effort to secure rights to the block in 2011. A number of top executives from both companies – including Eni Chief Executive Claudio Descalzi and former Shell Foundation Chairman Malcolm Brinded – will face trial.

Under Italian law a company can be held responsible if it is deemed to have failed to prevent, or attempt to prevent, a crime by an employee that benefited the company.

Both companies’ shares are traded on U.S. stock exchanges, putting their foreign dealings in the scope of U.S. authorities.

Shell and Eni, on behalf of subsidiaries, in 2010 entered deferred prosecution agreements with the DOJ over separate Nigerian corruption allegations.

Those pacts dismissed charges after a certain period in exchange for fines and an agreement to fulfil a number of requirements. They concluded in 2013 and 2012, respectively.

“A company’s disclosure of alleged foreign corruption to both the SEC and the DOJ in the U.S. typically means the company believed U.S. authorities needed to be made aware of this, and both agencies have the authority to prosecute under the (Foreign Corrupt Practices Act, or FCPA),” said Pablo Quiñones, executive director of the New York University School of Law program on corporate compliance and enforcement.

Quiñones previously worked as chief of strategy, policy and training at the DOJ’s criminal fraud section, a role that included helping to develop FCPA enforcement policy.

The SEC and the DOJ declined to comment on the company disclosures or whether they were looking into any allegations surrounding the block.

Eni noted its disclosure in an SEC filing, in which it said “no evidence of wrongdoing on Eni side were detected”. Shell has said publicly that it submitted the investigation to U.S. authorities and to Britain’s Serious Fraud Office.

Shell and Eni deny any wrongdoing. They say their payments for the block, a total of $1.3 billion, were transparent, legal and went directly into an escrow account controlled by the Nigerian government.

The companies and legal experts say the trial will last more than a year, with potential appeals stretching several years beyond that.

“The risk for companies is of a prolonged period of exposure to open court allegations from a state prosecutor of impropriety,” Anthony Goldman of Nigeria-focused PM Consulting said. “That will be painful and damaging.”

The Milan prosecutor charges that roughly $1 billion of the payments were funnelled to a Nigerian company called Malabu Oil and Gas, which had a disputed claim on the block, and former oil minister Dan Etete, who British and U.S. courts have said controlled Malabu. Reuters has been unable to reach Etete or Malabu for comment.

Shell has since said it knew some of the money would go to Malabu to settle its claim, though its own due diligence could not confirm who controlled the company. Eni said it never dealt with Etete or knew he controlled the company, but that the government promised to settle all other claims on the block as part of their deal.

“If the evidence ultimately proves that improper payments were made by Malabu or others to then current government officials in exchange for improper conduct relating to the 2011 settlement of the long standing legal disputes, it is Shell’s position that none of those payments were made with its knowledge, authorisation or on its behalf,” Shell said in a statement.

 

CONTROL AT RISK

The proceedings have also brought together investigators in several countries, with authorities in Nigeria and the Netherlands sending information to Milan.

A Dutch anti-fraud team in 2016 raided Shell offices as part of the investigation, and a Dutch law firm has asked prosecutors to consider launching a criminal case in the Netherlands.

“I’m not aware of many cases where this many jurisdictions have been at work for so long helping each other out. The amount of cooperation is very unusual,” said Aaron Sayne of the Natural Resource Governance Institute, a non-profit group that advises countries on how to manage oil, gas and mineral resources.

A case by Nigeria’s financial watchdog, the Economic and Financial Crimes Commission, against defendants including the former attorney general, ex-ministers of justice and oil and various senior managers, current and former, from Shell and Eni, will continue in June.

There has also been at least one effort to take away the asset. Experts say it is worth billions, and Shell has spent millions developing it. Eni intends to make a final investment decision this year on developing the block and said in corporate filings that the asset has a book value of 1.2 billion euros ($1.5 billion).

The Italian court does not have the ability to rescind rights to the block, and Nigerian oil minister Emmanuel Ibe Kachikwu has said the companies should continue to develop it.

But in a lawsuit filed by the Nigerian government against JPMorgan in London for the U.S. bank’s role in transferring money from the deal, it called the agreement that facilitated Shell and Eni’s purchase “unlawful and void”.

A JPMorgan spokeswoman previously said the firm “considers the allegations made in the claim to be unsubstantiated and without merit”.

Additionally, a Nigerian court last year briefly ordered the seizure of the block.

That decision was later overturned, and Shell and Eni say they are not worried about losing the asset. But the ruling and the language in the government’s suit against JPMorgan underscore the risk.

“It’s a nice, stable asset that could produce a lot of oil for a long time,” Sayne said.

($1 = 0.8127 euros)

 

(Reporting by Libby George; Additional reporting by Stephen Jewkes and Emilio Parodi in Milan and Ron Bousso in London; Editing by Dale Hudson)

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Spotify enters into the South African market

Comments (0) Actualites, Africa, Business, Economy, Entertainment and Lifestyle, Technology

JOHANNESBURG (Reuters) – Global music streaming provider Spotify launched its services in South Africa on Tuesday, marking its entry into Africa, where there is a rapid uptake of smartphones and improving telecommunications infrastructure.

The Swedish company, launched in 2008 and available in more than 60 countries, is the biggest music streaming company in the world and counts services from Apple Inc, Amazon.com Inc and Alphabet Inc’s Google Play as its main rivals.

The South Africa launch comes as Spotify prepares for a direct listing of its shares on the New York Stock Exchange, which will allow investors and employees to sell shares without the company raising new capital or hiring Wall Street banks to underwrite the issue.

“We believe South Africa is a wonderful country to start in,” Spotify Managing Director in Middle East and Africa Claudius Boller told Reuters on the sidelines of the launch.

“We looked at the technology landscape, we looked at the maturity and actually South Africa is seen globally as a very important music market.”

Spotify also has aspirations to branch out into the rest of Africa, Boller said, without committing to timelines or geographies.

An increase in connectivity across South Africa, helped by higher investment in infrastructure, as well as a growing uptake in credit cards and bank accounts has drawn global video and music streaming providers.

Its music streaming market is dominated by players such as Apple Music, Google Play, France’s Deezer and Simfy Africa, with only a few local operators such as mobile phone operator’s MTN and Cell C with MTN Music+ and Black.

Internet and entertainment firm Naspers also recently launched music streaming platform Joox, from China’s Tencent, in which it holds a 33 percent stake.

In its filing to list its shares, Spotify said its operating loss widened to 378 million euros ($465.32 million) in 2017 from 349 million euros.

($1 = 0.8123 euros)

 

(Reporting by Nqobile Dludla; editing by Jason Neely and Pritha Sarkar)

 

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Ivory Coast to reduce cocoa output over next two years

Comments (0) Actualites, Agriculture, Business, Economy

ABIDJAN (Reuters) – Ivory Coast’s Coffee and Cocoa Council (CCC) will suspend programmes for the 2018-19 season that boost cocoa output, it said on Friday, aiming to reduce production in the face of global oversupply.

The marketing board plans to halt distribution of higher-grade seeds and plants by chocolate makers, including Mars and Nestle, that develop hybrid species that they pass on to farmers to increase yields.

Those programmes helped to increase output in the world’s top grower to record highs last year but added to a supply glut that has depressed prices worldwide.

“Given the increase in global cocoa supply and falling prices since 2016/17, the CCC has decided to carry out a census of the coffee and cocoa orchards,” the CCC said in a statement. It did not say when the census would begin.

“Pending the finalisation of this census, we inform you of our decision to temporarily suspend any distribution of improved plant material, seeds, cuttings, etc, from the 18/19 season.”

Output in Ivory Coast has risen from 1.6 million tonnes 10 years ago to 2 million tonnes in the 2016-17 season because of higher yields, but global demand has failed to meet supply. The CCC expects production for the 2017-18 season to slip to 1.9 million tonnes, partly because of bad weather.

High-level sources at the CCC said the organisation wants to try to reduce output to between 1.7 million tonnes and 1.8 million tonnes over the next two years, affecting exporters and chocolate makers that also include Ferrero, Cargill, Olam, Cemoi and Cocoa Barry.

“Our goal is to control our production because these last 10 years, it is these programmes initiated by chocolatiers … that increased our production from 1.6 million to 2 million (tonnes),” a CCC source said.

Separately, the CCC has begun a three-year programme to uproot 300,000 hectares of cocoa infected by swollen shoot since January. The CCC source said that 25,000 hectares have been cleared already, which will also help to reduce growing capacity in the coming years.

 

(Reporting Ange Aboa; Writing by Edward McAllister; Editing by Jason Neely and David Goodman)

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South Africa’s RCL Foods expands in pet food to beat drought

Comments (0) Actualites, Africa, Business, Economy, Environment

RANDFONTEIN, South Africa (Reuters) – South Africa’s RCL Foods has completed a 123 million rand ($10 million) expansion at its pet food plant to help reduce its exposure to a poultry business hit by drought and cheap imports.

Food companies in South Africa have been struggling with an El Niño-induced drought that drove up the price of ingredients such as maize, while poultry farmers have also faced competition from Brazil, the European Union and the United States.

RCL is aiming to tap into the country’s 5 billion rand ($418 million) a year pet food industry, which is less exposed to individual commodities, as part of a strategy to diversify, CEO Miles Dally said at a plant visit late on Thursday.

“Ideally we would like less impact from things like drought and dumping,” he said.

“Our vision has always been clear, to create a major food business,” he added, referring to the pet food division.

RCL’s expansion in Randfontein, west of Johannesburg, will boost its pet food production to 12,000 tonnes per month from 7,000 tonnes.

The company, which saw first-half profit plunge 54 percent last year, this week reported an increase for the first six months of its current financial year, boosted by a decline in input costs and higher chicken prices.

The firm cited lower poultry imports, which were reduced in part by an outbreak of bird flu in Europe.

RCL’s pet food business, which has annual revenue of around 1 billion rand, aims to grow by as much as 20 percent per year, Dally said, adding the firm would look for acquisitions to bolster the business.

The company currently produces over 20 brands including Rainbow chicken products, Nola mayonnaise, Yum Yum peanut butter, Bobtail dog food and Selati sugar products.

RCL cut 1,350 jobs and reduced production by 50 percent at its Hammersdale factory in the KwaZulu-Natal province in November 2016 as the chicken imports and drought took a toll.

($1 = 11.9204 rand)

 

(By Tanisha Heiberg; Editing by James Macharia and Mark Potter)

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Barclays Africa lifts profit, looks to Nigeria for growth

Comments (0) Actualites, Africa, Business, Economy, Leaders, Politics

By Ed Stoddard

(Reuters) – Barclays Africa Group, South Africa’s No.2 lender by market value, plans to extend its reach throughout the continent, it said on Thursday after posting annual profit up nearly 4 percent.

Chief Executive Maria Ramos said the bank, which is changing its name back to South African brand Absa after its split from former parent Barclays, aims to enter Nigeria as it seeks to lift its share of the African market to 12 percent from 6 percent over the medium term.

Finance Director Jason Quinn told Reuters that Nigeria has been in its sights for some time.

“We would have to think carefully about how and when to enter the Nigerian market and that is what we are going to start doing,” he said.

“We have to decide how we enter, whether we acquire or build.”

The bank had earlier reported normalised diluted headline earnings per share — the primary measure of profit in South Africa, stripping out one-off items — up 3.9 pct at 1,837.7 cents for the year to Dec. 31, helped by a 20 percent drop in credit impairments.

Net interest income, a gauge of lending profitability, rose by 1 percent to 42.32 billion rand ($3.56 billion), while its net interest margin was unchanged at 4.95 percent.

Growth in the United States was the positive surprise in the second half, even as Europe, Japan and China grew at or above consensus expectations, the bank said.

This more than made up for slow economic expansion in its main markets, which account for about 80 percent of group income.

Barclays Africa and its rivals have struggled to increase lending as slowing economic growth in many African markets tempers demand from corporate clients while retail clients in its home South African market feel the squeeze from rising interest rates.

However, confidence in its domestic market has been buoyed by the Cyril Ramaphosa’s elevation to the South African presidency last month, pledging to revitalise the economy.

Barclays Africa said it expects growth in loans and deposits to improve in 2018 and forecast stronger loan growth from the rest of Africa. It also forecast stronger loan growth in corporate and investment banking in South Africa.

($1 = 11.9025 rand)

(Additional reporting by Tiisetso Motsoeneng in Johannesburg and Esha Vaish in Bengaluru; Editing by Stephen Coates and David Goodman)

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South Africa’s rand at 2-week low as global headwinds, Fed jitters kick-in

Comments (0) Actualites, Africa, Business, Economy, Politics, US

JOHANNESBURG (Reuters) – South Africa’s rand slipped to its lowest in two weeks on Thursday, succumbing to month end demand for dollars by local firms as the increasing chances of higher interest rates in the United States lured bulls back into long-dollar positions.

At 0640 GMT the rand was 0.4 percent weaker at 11.8350 per dollar, its softest level since February 14, compared to an overnight close of 11.7875.

It was the first time in more than two weeks the rand closed above technical support around 11.80, after weakening for three consecutive sessions, prompting some technical selling as well as portfolio rebalancing by corporates offloading excess rands.

Analysts said the “Ramaphosa effect”, named for the rise in investor confidence and rally in local assets after new president Cyril Ramaphosa took over as chief of the ruling African National Congress (ANC) in December, was now giving way to global headwinds.

“With the cabinet reshuffle out of the way, our local assets will continue to reprice in line with the global macro environment,” said fixed income trader at Rand Merchant Bank Gordon Kerr in a note.

The dollar index remained near 5-week highs early on Thursday, still drawing support after the Federal Reserve’s new chief Jerome Powell struck an optimistic tone on the U.S. economy, raising bets of at least four rate hikes by the bank in 2018.

Stocks opened softer with the benchmark Top-40 index down 0.13 percent.

Bonds were also softer, with the yield on the benchmark paper due in 2026 up 4 basis points to 8.165 percent.

 

(Reporting by Mfuneko Toyana; Editing by Ed Stoddard)

 

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Angola oil production declines slightly in 2017, profits rise

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LUANDA (Reuters) – Oil production for Angola, Africa’s No. 2 crude producer, averaged 1.632 million barrels per day in 2017, down from 1.72 million barrels the previous year, the chairman of the state-run oil company Sonangol said on Wednesday.

Angola has been grappling with the effects of generally depressed oil prices on its government finances but is constrained from lifting production because it is committed to OPEC-mandated cuts.

Angola is a member of the Organization of the Petroleum Exporting Countries, and it must limit output in line with OPEC’s commitment to cut output by about 1.2 million barrels per day (bpd) as part of a deal with Russia and others.

Sonagol chairman Carlos Saturnino also told a media briefing that the net profit for Sonangol, which regulates Angola’s oil sector, was $224 million in 2017 versus $81 million the previous year when oil prices were lower.

It was his first briefing since Angola President João Lourenço fired Isabel dos Santos, daughter of his presidential predecessor, from the helm of Sonangol.

Lourenço took power in September and is seeking to win credibility with international investors and shed Angola’s image as an opaque oil economy with rampant corruption.

 

(Reporting by Stephen Eisenhammer; Writing by Ed Stoddard; Editing by James Macharia)

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