Business
Category

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.

Read more

Botswana sees budget deficit narrowing in 2016

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

GABORONE (Reuters) – Botswana’s budget deficit will narrow to 0.03 percent of gross domestic product from a previous forecast of a 2.6 percent shortfall, the ministry of finance said on Thursday.

The department attributed this to expected growth in revenue collected from non-mineral taxes, which it said would likely grow 10.4 percent to 10.32 billion pula ($977 million).

“This significant growth rate of the non-mineral revenue is encouraging since it reflects possible success of our diversification efforts,” the department said in budget strategy paper.

Botswana halved its 2015 growth forecast in August to 2.6 percent from 4.9 percent previously, citing expected weakness in the diamond market which accounts for nearly 40 percent of its budgetary revenue and around 85 percent of exports in dollar terms.

Sluggish sentiment in the market has seen both De Beers and Botswana’s Okavango Diamond Company (ODC) sales falling by over 20 percent in the first six months of the year.

The ministry added that it projected total revenues and grants rising 3.1 percent in the 2016/17 financial year from previous estimates.

Read more

Bollore invests 30 mln euros in Ivory Coast-Burkina rail link

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

bollore rail

ABIDJAN (Reuters) – Bollore has invested 30 million euros ($33.6 million) to buy trains for the freight and passenger line it operates between Burkina Faso and Ivory Coast, the French company said.

Landlocked Burkina Faso relies partly for its exports and imports on the ports of its southern neighbour Ivory Coast, the biggest economy in French-speaking West Africa. It also uses ports in other neighbours Ghana and Togo.

“We have invested around 30 million euros to acquire trains, including six received today,” Lionel Labarre, director of Bollore Africa Logistics, said on Wednesday.

“We are still waiting for nine locomotives that will add to the 20 that are already in service,” he said, adding that Bollore would also develop the station in Abidjan, Ivory Coast’s main city.

Trains take about 36-hours to do the 1,260-km (787-mile) journey between Abidjan and Burkina Faso’s capital Ouagadougou, and carriages are often packed with people, trade goods and animals being carried to market.

Bilateral trade between Burkina Faso and Ivory Coast hit 290 billion CFA francs ($495 million) in 2014, up from 165 billion in 2011, Prime Minister Daniel Kablan Duncan said at a ceremony to mark the arrival of the six new engines.

Most of the trade runs via rail and road links. Cargo traffic between the two countries stood at 610,000 tonnes last year, up from 402,000 tonnes in 2011, Duncan said.

Developing the rail line is a strategic priority for Ivory Coast and a tool for regional integration, said Duncan, adding that the country was aiming for 2 million passengers a year in the next few years up from 300,000 now.

Bollore has operated the Ivory Coast-Burkina Faso railway since 1995 and has recently been awarded a concession for a rail link between Niger, Benin and Togo.

 

Read more

IMF will not see new Zimbabwe loans in at least three years

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

HARARE (Reuters) – The International Monetary Fund said on Thursday it would be at least three years before Zimbabwe can start accessing loans from international lenders and needs to deepen economic reforms in the medium term to strengthen its ability to repay debt.

Domenico Fanizza, head of a visiting IMF mission said there were no quick and easy fixes to Zimbabwe’s recovery, adding that what was needed in Zimbabwe were costly reforms that would take time to be felt by ordinary citizens.

The once promising southern African nation owes foreign creditors $9 billion and has been struggling for five years to recover from a catastrophic recession that send hyperinflation into billions amid widespread food shortages.

 

(Reporting by MacDonald Dzirutwe; Editing by James Macharia, Reuters)

Read more

JP Morgan to remove Nigeria from government bond index

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

LAGOS (Reuters) – JP Morgan will remove Nigeria from its Government Bond Index (GBI-EM) by the end of October, the bank said on Tuesday, after warning the government of Africa’s biggest economy that currency controls were making transactions too complicated.

The removal will force funds to sell Nigerian bonds, triggering potentially significant capital outflows and raising borrowing costs for the government.

Struggling with a plunge in vital oil revenue, Nigeria had imposed currency restrictions to defend the naira after the burning of dollar reserves failed to halt a slide.

The JP Morgan index tracks around $210 billion in assets under management.

Some bonds will be removed from the index by the end of September and the rest by the end of October, JP Morgan said.

The bank had warned Nigeria that to stay in the index, it would have to restore liquidity to its currency market in a way that allowed foreign investors tracking the index to conduct transactions with minimal hurdles.

Nigeria became the second African country after South Africa to be listed in JP Morgan’s emerging government bond index, in October 2012, after the central bank removed a requirement that foreign investors hold government bonds for a minimum of one year before exiting.

The index added Nigeria’s 2014, 2019, 2022 and 2024 bonds, giving Africa’s biggest economy a weight of 1.8 percent in the index.

“Foreign investors who track the GBI-EM series continue to face challenges and uncertainty while transacting in the naira due to the lack of a fully functional two-way FX market and limited transparency,” the bank said in a note.

The central bank had to devalue the naira and pegged it at a fixed rate against the dollar, turning trading into a one-way quote currency market whose lack of transparency upset investors and businesses.

The index provider said Nigeria would not be eligible for re-inclusion in the index for a minimum of 12 months. To get back in, it would have to establish a consistent record of satisfying the index inclusion criteria, such as a liquid currency market.

Nigeria’s Finance Ministry, central bank and Debt Management Office said in a statement they “strongly” disagreed with the index expulsion, saying that market liquidity was improving.

“While we would continue to ensure that there is liquidity and transparency in the market, we would like to note that the market for (government) bonds remains strong and active due … to diversity of the domestic investor base,” the statement said.

Traders told Reuters on Tuesday the central bank started rationing dollars to foreign investors last week.

Nigeria’s foreign reserves stood at $31 billion as of Sept. 7, down more than 21 percent from a year earlier, when they were $39.6 billion, the central bank said.

“Nigeria’s inclusion in the GBI-EM index was generally seen as a big step forward in its integration into global financial markets, opening the market to new investment and raising its profile worldwide. That will now be reversed,” said Alan Cameron, an economist at Exotix.

With Nigeria’s removal, countries such as Malaysia, Indonesia and Thailand have increased their weight by more 25 basis points as of Aug. 31, JP Morgan said in the note.

Foreign holdings of Nigerian government bonds stood below $2.75 billion, said Samir Gadio, the head of Africa strategy at Standard Chartered Bank. They had been around $8 billion in September 2014.

“This will initially trigger excess volatility in the market as exiting offshore accounts and onshore investors may push yields higher,” Gadio said. “A potential exclusion from the GBI-EM indices would make it more difficult to attract foreign portfolio flows in the future as Nigeria will need to rebuild its market credentials.”

By Chijioke Ohuocha (Reuters)

Read more

Electricity shortage, low copper prices hit Zambian mines

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

LUSAKA (Reuters) – An electricity shortage and weaker copper prices have put pressure on Zambia’s mining industry, threatening output, jobs and economic growth in Africa’s No. 2 producer of the metal.

The power problems and copper price slide have driven the kwacha currency to record lows amid a selloff in commodity-linked currencies as key consumer China’s economy has slowed, renewing pressure on Zambia to diversify its economy.

Glencore, Vedanta Resources Plc and China’s NFC Africa and CNMC Luanshya Copper Mine have said they will shut down some operations due to the harsh business environment.

“This is serious, it could bring our economy to its knees,” independent analyst Maambo Hamaundu said.

Zambia’s power generation capacity stands at 2,200 megawatts (MW), with most of the electricity produced from hydropower, but supply is often erratic.

State power utility Zesco Ltd, which generates the bulk of the electricity, said last week it would deepen power cuts after water levels at its largest hydropower station dropped following a drought.

President Edgar Lungu said on Friday that Zambia should reduce its overall imports of goods to tackle the country’s trade imbalance, but it should import more power to address the shortages.

The Zambian government on Tuesday started importing 148 MW of power from a ship docked off the coast of Mozambique.

“CEC (Copperbelt Energy Corporation) has communicated to the mines, the need for them to begin accessing imported power,” Chama Nsabika-Kalima, spokesperson for CEC, the largest supplier of power to Zambia’s copper mines, said.

Zambia is the world’s No. 8 copper producer. The closure of mines and smelters is likely to hit its output, which was projected to increase to 916,767 tonnes by 2018 from 741,916 tonnes in 2015, largely on account of increased output at the Kansanshi mine owned by Canada’s First Quantum Minerals, according to government data.

The slide in global copper prices, to six-year lows last month, has already prompted the government to slash its economic growth forecast for this year to 5 percent, from an initial 7 percent, and the deepening power crisis and curbs to copper production risk a further slowdown, analysts say.

Copper production accounts for 11 percent of Zambia’s gross domestic product.

Labour unions are worried about the impending job cuts, while the government has asked mining companies to consult with the ministry of labour before shutting down operations.

“We started importing electricity and they have the option to buy that power and continue with the operations,” the chief government spokesman, Chishimba Kambwili, said.

The Zambia Chamber of Mines, an industry body, said it was talking to the government over the problems facing the industry.

“We understand the severity of the situation. We want to work with the government to find a long-term solution to this problem,” the chamber’s chief executive, Maureen Dlamini, told Reuters.

By Chris Mfula (Reuters)

Read more

South Africa’s Zuma says urgent intervention needed to save mining sector

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

PRETORIA (Reuters) – Consistently low commodity prices and the risk of job losses have forced the government to call an urgent meeting with labour and business leaders in South Africa’s mining sector, President Jacob Zuma said on Tuesday.

The mining industry, which contributes around 7 percent to Africa’s most developed economy, is struggling with sinking commodity prices, rising costs and labour unrest, forcing a number of companies into mine closures and layoffs.

“We meet under difficult conditions. The global economy is experiencing a downturn which is posing a challenge for South Africa’s economy, which is a net exporter of key mineral commodities,” Zuma said in opening remarks at the Mining Sector National Consultative Forum in the capital Pretoria.

The meeting comes after a 10-point plan was signed by the mines ministry, labour and industry to stem a wave of job cuts triggered by falling prices and rising costs.

Zuma’s ruling ANC party is facing increasing pressure from the left-leaning parties who accuse him of neglecting the working class ahead of local elections next year.

Mines Minister Ngoako Ramatlhodi told reporters he wanted to save mines while also conserving jobs and that the meeting with Zuma would hopefully yield solutions to the job losses.

“It is crucial, it is important and we have elevated it to the president’s level and that tells you the importance we have attached to this gathering,” he said.

Ramatlhodi has previously said almost 12,000 mining jobs were on the line in South Africa, which has an unemployment rate of around 25 percent and glaring income disparities.

South Africa sits on close to 80 percent of the world’s known reserves of platinum, a metal used in emissions-capping catalytic converters which is facing depressed demand.

tagreuters.com2015binary_LYNXNPEB870F1-VIEWIMAGE

Read more

Smile Telecoms raises $365m to fund Africa expansion

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

Smile Telecoms

JOHANNESBURG (Reuters) – African mobile internet firm Smile Telecoms has raised $365 million to fund the expansion of high-speed broadband networks, it said on Tuesday, the latest firm to jockey for a position in the continent’s fast-growing mobile consumer market.

Telecoms and Internet companies are expanding in Africa to take advantage of the growing demand for data heavy services as more affordable smartphones encourage consumers to browse the internet, stream videos and download applications.

Mauritius-based Smile Telecoms said it would use the funds to extend its existing 4G LTE mobile broadband network in Nigeria, Tanzania and Uganda and also launch the network in the Democratic Republic of Congo in 2016.

The money was raised through a $50 million equity sale to Public Investment Corporation, a South African state-owned firm that manages more than 1.6 trillion rand on behalf of civil servants.

The rest of the funding was raised via debt from a group of investors that included Egypt’s African Export-Import Bank, Development Bank of Southern Africa, Diamond Bank plc and Standard Chartered Bank.

Read more

Glencore reins in debt as commodity price slump persists

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

By Olivia Kumwenda-Mtambo

(Reuters) – Mining and trading company Glencore acknowledged on Monday the severity of the global commodity market slump as it suspended dividends and said it would sell assets and new shares to cut heavy debts built up through years of rapid expansion.

The London-listed company came under pressure to cut its net debt of $30 billion, one of the largest in the industry, as prices for its key products, copper and coal, sank to more than six-year lows. (more…)

Read more

Ethiopia’s inflation at 11.6 pct year-on-year in August

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

NAIROBI (Reuters) – Ethiopia’s inflation slowed to 11.6 percent year-on-year in August from 11.9 percent the previous month, owing to a dip in non-food items, the statistics office said on Monday.

The Central Statistics Agency said non-food price inflation fell to 9.2 percent from 9.7 percent in July.

The food inflation rate rose to 14.7 percent in August from 13.9 percent the previous month.

 

Read more