The article discusses the Zimbabwe government's stance on genetically modified organisms (GMOs). It summarizes: 1) The agriculture minister recently reaffirmed that Zimbabwe will not allow GMO production or contamination of crops. 2) However, the government has not clarified how it will increase production of non-GMO crops to address Zimbabwe's food deficit and reliance on imports. 3) While the government protects local farmers from imports, most farmers lack the capacity and funding to produce enough to meet local demand and export excess due to high production costs. Increased capacity is needed for Zimbabwe to achieve food security.

1. News Update as @ 1530 hours, Monday 16 June 2014
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By Tawanda Musarurwa
AIM-listed resources and develop-
ment company African Consolidated
Resources (ACR) is set to acquire Fal-
gold's mothballed Dalny gold mine for
$8 million.
ACR is currently undertaking due dil-
igence on the mine with a view to
assuming all the debts and liabilities
the non-operational gold producer had
accrued.
In a cautionary published today, Fal-
gold said most of the full payment will
go towards "various payments".
"This transaction is subject to a full dil-
igence and various actions which ACR
is in the process of undertaking. The
terms of disposal include: full settle-
ment of all known trade creditors of
Dalny Mine; settlement of labour costs
of workers; full settlement of any cap-
ital gains tax or other tax liabilities due
to the Zimbabwe Revenue Authority;
the balance of funds after these pay-
ments will then be remitted to Falgold.
"ACR have offered a full payment price
of $8 000 000 before various pay-
ments, as detailed above, need to be
made. The estimated net cash from
the transaction is approximately $2,5
million," said Falgold.
The disposal of Dalny Mine will con-
stitute a restructuring that will help
Falgold meet some of its other capital
requirements.
In March this year, the struggling gold
producer said it was looking to extend
the 25 percent wage cut it effected
last year, indicating that it was still in a
loss-making position.
The company, which is owned by
Toronto Stock Exchange-listed junior
miner New Dawn, posted a $12,5 mil-
lion loss for the year ended September
30 2013 citing poor gold prices, the
temporary closure of Dalny Mine and
persistent labour issues.
Falgold slashed salaries by 25 percent
in October last year initially for three
months, citing operational challenges,
but further extended the cuts in Janu-
ary and then said the extension would
remain indefinitely.
ACR, which recently appointed Zimba-
bwean Roy Pitchford as it acting CEO,
looks to extend its Zimbabwean foot-
print with the acquisition of Dalny Mine.
The revival ofDalny will come as relief
for its 900 worker who were sent on
unpaid leave during the third quarter of
last year.
ACR is in the process of advancing its
flagship asset, the Pickstone-Peerless
gold project, after it currently boasted
a Joint Ore Reserves Committee-com-
pliant resource of 3,56-million ounces
of gold. •
ACR to pay $8m for Falgold's Dalny gold mine

2. BH24

3. 3 NEWS
By Rumbidzai Zinyuke
Zimbabwe’s deflation has continued
to thaw but remaining in the negative
after the annual inflation rate gained
0,07 percentage points to -0,19 per-
cent.
Figures from the Zimbabwe National
Statistical Agency the annual rate of
inflation for May improved slightly from
-0,26 percent in April.
“This means that prices, as measured
by the all items CPI decreased by an
average of 0,19 percentage points
between May 2013 and May 2014,”
ZimStats said. The inflation rate meas-
ures a broad rise or fall in prices that
consumers pay for a standard basket
of goods.
Zimbabwe entered deflation in Feb-
ruary as liquidity conditions tightened
while aggregate demand kept declining
due to lower disposable incomes.
During deflation, when the annual rate
of inflation falls below zero, compa-
nies cannot increase prices of goods;
instead, they cut prices even when
costs are rising. Some economic ana-
lysts however believe the deflationary
period is temporary as it is a gradual
climb down from dollar-induced infla-
tion the economy went through after
adopting multi-currencies.
More pessimistic observers contend
that the current deflationary state is
real and could affect the country for a
long time as deflation is typically noto-
rious to come out of.
They believe that the current thawing
of deflation is simply a reaction to the
tobacco marketing season, which has
helped to liquefy the economy.
On a month on month basis, inflation
rate in May was -0,13 percent after
shedding off 0,71 percentage points on
the April rate of 0,58 percent.
The year-on year food and non-alco-
holic beverages inflation stood at -3,75
percent whilst the non-food inflation
rate was 1,62 percent.
The month-on-month food and non-al-
coholic beverages inflation stood at
-0,30 percent, gaining 0,16 percentage
points on the April rate of -0,46 per-
cent. the month on month non-food
inflation stood at minus 0,05 percent
shedding -1,14 percentage points on
the April rate of 1,09 percent. •
Zim deflation continues to thaw

4. By Lynn Murahwa
Implementation of the Corporate Gov-
ernance Framework will now move
with speed after Cabinet's approval for
the establishment of a Corporate Gov-
ernance and Delivery Agency in the
Office of the President and Cabinet.
The new agency will work along with
the Zimbabwe Revenue Authority and
state enterprises to ensure compliance
with the approved frameworks.
Speaking at the Zimra Stakeholders
Workshop for Parastatals this morn-
ing, Chief Secretary to the President
and Cabinet Dr Misheck Sibanda said
this was Government's initiative to
inculcate values of good corporate gov-
ernance and to ensure that all public
institutions comply with the country's
tax laws.
"Cabinet has approved the establish-
ment of a Corporate Governance and
Delivery Agency in the Office of the
President and Cabinet, for purposes of
ensuring compliance with the approved
CorporateGovernanceFramework,"he
said.
Dr Sibanda said particular irregular-
ities have been revealed within the
country's parastatals and enterprises
through the Zimra investigations.
"The investigations undertaken by
Zimra on a number of state enter-
prises, parastatals and some local
authorities have unearthed a number
of irregularities in the areas of income
tax, PAYE, withholding tax, among
other tax heads" he said.
He added that these revelations have
brought about the need for a platform
where the heads of the parastatals can
be reminded of their duties.
"Such revelations brought to the fore
need for an interactive forum where all
chief executives can be enlightened on
their tax obligations" said Sibanda.
He said Government has begun work-
ing to address the issues affecting
the implementation of ZimAsset. He
said the Cabinet approved Corporate
Governance and Remuneration Policy
Framework to tackle these challenges
in State Enterprises include a review of
tax laws for heads of parastatals.
"Government has started to address
some of the challenges affecting imple-
mentation of the ZimAsset. With spe-
cific reference to the public sector I
wish to advise that Cabinet has already
approved the Corporate Governance
and Remuneration Policy Framework
for designated posts in State enter-
prises,parastatalsandlocalauthorities.
"Highlights of the framework include all
totalpaypackagesfordesignatedposts
in state enterprises, parastatals and
heads of local authorities be taxable, as
well as the total pay packages should
comprise of basic salary of 60 percent
and benefits of 40 percent. The Chief
Executive Officers and Heads of Local
Authorities be appointed for a four year
term, which is renewable once, on the
basis of satisfactory performance." •
NEWS4
Govt sets up Corporate Governance and Delivery Agency

5. 5 NEWS
By Lynn Murahwa
The Rural Electrification Tariff is set to
go up after the Minister of Energy and
Power Development called upon the
new Rural Electrification Agency board
to review the current tariff.
While announcing Zesa boards
appointments yesterday, Energy and
Power Development Minister Dzikamai
highlighted his concerns over the 'low'
rural electrification tariff to the new
Rural Electrification Agency board.
"The 6 percent levy for rural electrifi-
cation is not enough, we hope the new
boardthatistakingoverisawareofour
concerns," said the Minister. The new
REA board is constituted by chairman
Willard Chiwewe and board members
including Christinah Moyo, Fungai
Samuel Mbetsa, Christopher Shumba,
Josphat Jaji, Felix Chikwowo, Midard
Khumalo and Cecelia Chitiyo. The chief
executive officer is Joshua Mashamba.
It is however expected that the new
board will face a public backlash in
increasing the rural electricity tariff due
to the inefficiency and duplicity of the
previous board after it had become
involved in loaning activities.
Observers are generally against a tar-
iff hike. "It cannot be the new board's
firsttasktoraisetheruraltariffincrease
before it even justifies that the current
monies being paid in the public are
being utilised the right way," said one
observer. Earlier in February this year,
Minister Mavhaire dissolved the then
REA board and management after they
were embroiled in a $4 million scandal
whereby they extended to themselves
and other connected private citizens
loans amounting to close to $4 million.
Minister Mavhaire yesterday called
upon the new REA board to re-align to
its original mandate. "REA must focus
on its mandate...it must drop some
of its failed integrated or comprehen-
sive development thrusts as it is not a
development agency but a Rural Elec-
trification Agency," he said.
Meanwhile, the Energy Minister has
said the solar energy initiative, which
is being championed by the Zimbabwe
Power Company and REA, is one of the
reasons for an upward increase in the
overal electricity tariff rate.
"Whilst we have very high solar radi-
ation rates, solar power remains very
expensive. The same people that are
demanding solar power are the same
that will denounce us when electricity
tariffs are adjusted on account of using
any significant portion of solar power,"
he said. •
UN's Principles for Responsible Investment aims for ZSE partnership

6. The producer price for sugar has
dropped by nine percent to $574 per
tonne from $627.67 last year mainly
duetodeclineinvalueofthecommodity
on the international market, an official
said on Monday.
Commercial Sugarcane Producers
Association of Zimbabwe vice chairper-
son Tawanda Mafurutu told New Ziana
thattheproducerpriceofrawsugarwas
largelydeterminedontheglobalmarket
and was subject to periodical review.
“Sugarcane growers are currently being
paid $574 per tonne for now but the
price can go up or down as the season
progresses depending on what is hap-
pening worldwide,” he said. “Last year
the price declined towards the end of
the selling season. We started at $627
per tonne and ended at $572.
We hope that this year the price will
firmforustogetmoreprofit,”headded.
The price of raw sugar in Zimbabwe for
the 2013 marketing season dropped to
US$627,67pertonnefromUS$700the
previous year owing to massive produc-
tion of the crop in some parts of the
world, hence pushing prices down.
Sugarcane growers in the Lowveld are
thisyearanticipatinganupsurge inpro-
duction spurred by heavy rains received
in the 2013-14 cropping season.
Growthinsugarcaneyieldisalsodriven
by the increase in area planted from 44
818 hectares in the 2012/13 season to
50 000 hectares in the 2013/14 sea-
son.
According to the African Development
Bank Monthly Economic Review (Janu-
ary)sugarcaneproductionintheSouth-
ern African country for the 2013/14
cropping season was projected to grow
nine percent from the 2011/12 sea-
son yield to 4 550 000 metric tonnes.
Harvesting of sugarcane in Zimbabwe
started on April 1 this year and is likely
to continue until December. Sugarcane
is grown on a commercial scale in the
south-eastern parts of the country
which include Chisumbanje in Man-
icaland province and Chiredzi in Mas-
vingo province where more land is set
to be availed soon following completion
of the Tokwe-Mukosi Dam.
Prior to the land reform program in
early 2 000, sugarcane production was
a monopoly of Tongaat Hullet, a South
African company that still controls the
milling and marketing of the crop in the
country. ― New Ziana•
BH24 Reporter
Zimbabwe’s tobacco sales are inching
towardsthe200millionkilogrammemark
althoughlowpriceshaveseenearningsnot
goingsignificantlyhigherthanlastseason.
The targeted crop this season was 180
millionkgswhichwassurpassedlastweek.
Latest figures from the Tobacco Industry
andMarketingBoardshowthatmorethan
191 million kgs worth $610 million have
been sold, a 32 percent increase from
the same period last year. But the value
soldtodateisonly14percenthigherthan
last year's $537,5 million due to prevailing
lowerpricesforauctionsale.
Contract floors have so far received 144
million kg worth $479 million while auc-
tion floors have purchased 48,1 million kg
worth $132 million. The average price for
contract tobacco was $3,33 per kg and
$2,74forauctiontobacco.
While auction floors have been the life-
bloodofmanyfarmers,thelowpriceshave
pushed most of them to turn to contract
farming for them to get more from their
crop. Auction floors are also reportedly
consideringdiversifyingintocontractfarm-
ing. •
6 AGRICULTURE
Tobacco sales nears 200 million kgs
Producer price of sugar falls nine percent

7. BH24

8. The equities market has begun the
week on a positive note, rising 0.17
percentintoday'stradestonotchafifth
consecutive gain.
The Industrial Index pushed up 0.31
points to settle at 181.05 points follow-
ing gains in selected heavyweights.
Conglomerate Innscor advanced 1.49
cents to 77 cents, while giant insurer
Old Mutual gained 0.42 cents to trade
at 250.92 cents.
Cottcowasup0.09centsto0.90cents,
while construction firm Masimba rose
0.01 cents to close at 1.51 cents.
Onthedownside,bankersCBZwasthe
only counter to trade in the red after
easing 0.50 cents to trade at 14.50
cents. The Mining Index also continued
on a positive trend, gaining 3.40 points
(or 7.53 percent) to close at 48.57
points on the back of the positive per-
formance of BINDURA, which added
0.31 cents to trade at 3.61 cents.
The other mining counters, Falgold,
Hwange and Riozim all maintained
previous trading levels. — BH24
Reporter •
8 ZSE REVIEW
Equities in fifth consecutive gain

9. Government has once again made it
clear that it will not change its stance
on the production of genetically mod-
ified commodities.
This is a good thing. Citizens need to
be aware of Government policy at all
times. Despite reports that Govern-
ment could consider allowing GMO,
Agriculture, Mechanisation and Irri-
gation Development Minister Joseph
Made last week made it clear that
GMOs have no place in our country.
“We will not allow our country to be
contaminated by these commodities...
we can be a producer for the regional
market and indeed for the international
market,” he said.
But what Government has not made
clear is how it will make sure that pro-
duction of non-GMO agriculture pro-
duce is increased.
Zimbabwe is currently battling under
a food deficit which has made us rely
on food imports. At one point we were
even importing fruits, tomatoes, eggs
and chicken livers! One of the things
Government has done is to put in
place more stringent measures on the
importation of such basic agricultural
produce.
With these stricter measures in place,
there is a ray of hope for local farmers.
Farmers now have the market freed up
for them to produce on a large scale.
What then can stop farmers in produc-
ing enough to supply the local market
and export the excess when they have
been protected by Government?
The simple answer is “capacity”. Farm-
ers need the necessary funds required
to make their farming activities self
sustaining.
Most of our farmers lack the capacity to
produce three months’ supply of com-
modities let alone a year’s supply.
So this triggers imports because we
cannot meet demand and the products
become more expensive due to high
costs of production in the country.
Indeed, Zimbabwe can produce for
local, regional and international mar-
kets; we were once the bread-basket
of Africa after all. But the past decade
and a half has not been easy on the
farmers, especially the communal
farmers who once used to produce
enough to feed the urban population.
Although the poultry and horticulture
industries have picked up, they are still
struggling to meet demand so they
need help.
Some suggestions on what Govern-
ment can do: First, there should as
much clarity on the method of financ-
ing farmers to meet demand consist-
ently.
European countries can afford to ban
GMOs because they know that they
have the capacity to produce organic
commodities and import the deficit
from other countries. Zimbabwe, does
not have that capacity.
Second, Government should make
sure that there are stricter measures
on imports, not on paper only but in
terms of enforcement of these reg-
ulations. Despite the ban on imports,
some products keep finding their way
into the country and they are still
cheaper than our own products.
Last, farmers should increase yields to
be able to meet demand. If they have
the money to do it then they should do
it properly and not take shortcuts.
Should they want to overtake imports,
they should be consistent as the Minis-
ter Made rightly said.
Once the yield is increase, they can
maintain supply. When demand
increases and costs eventually go
down.
When this eventually happens, the
Government can afford to offer export
incentives on the excess supply and
we go back to being the region's
bread-basket. •
9 BH24 COMMENT
Govt clear on GMO stance, but crop production needs to increase

10. Kenya plans to sell two dollar bonds
today in its first offering on interna-
tional capital markets, a day after a
terrorist attack killing 48 people height-
ened security concerns in East Africa's
biggest economy.
Kenya is issuing a five-year Eurobond
at a yield in the low 6 percent area and
a 10-year bond in the low 7 percent
range, according to a person familiar
with plans who asked not to be identi-
fied as the information is private. That
compares with the 7.1 percent yield on
similarly-rated 2014 bonds from Zam-
bia sold in April.
Kenya will use the proceeds for infra-
structure projects and repayment of
a $600 million loan that matures this
August.
The government forecasts economic
growth will accelerate to 6.1 percent
in the year through June 2015 from an
estimated 5.3 percent in fiscal 2014,
helped by exports of tea and flowers.
BombingsinNairobiandtheportcityof
Mombasa killed more than 100 people
since a Sept. 21 attack on the West-
gate Mall in the capital.
“At this price it looks attractive” relative
to Zambia which “arguably has weaker
credit fundamentals than Kenya,” Max
Wolman, who helps oversee $13.5
billion in emerging-market debt as a
money manager at Aberdeen Asset
Management Plc in London, said by
phone today.
“Yields are particularly low, demand for
emerging markets is high, so they can
getthedealdoneatattractivelevelsfor
the issuer.”
Zambia raised $1 billion two months
ago in Africa’s first sovereign dol-
lar-debt offering of 2014. It was priced
to yield 8.6 percent, more than 340
basis points above the government’s
debut issue in September 2012, after
a widening fiscal deficit prompted a rat-
ingsdowngradelastyear.Kenyashares
Zambia’s B1 rating at Moody’s Inves-
tors Service, three levels below invest-
ment grade. ― Bloomberg
10 REGIONAL News
Kenya taps debt market with debut Eurobond amid security concern
enjoy the CAIO ride!

11. 11 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
16 June 2014
Energy
(Megawatts)
Hwange 423 MW
Kariba 750 MW
Harare 45 MW
Munyati 26 MW
Bulawayo 21 MW
Imports 200 MW
Total 1465 MW
26 June - Pioneer 44th Annual
General Meeting of Sharehold-
ers, Venue: Pioneer Corporation
Africa Limited Boardroom, Corner
Hood/Hermes Roads, Southerton,
Harare, Time: 10:00 hrs
26 June - Masimba Holdings
Limited Thirty-Ninth Annual
General Meeting of Mem-
bers for the period ended 31
December 2013, Place: 44 Til-
bury Road, Willowvale, Harare,
Zimbabwe, Time: 12:00
30 June - TA Holdings 79th
Annual General Meeting of the
ordinary members Venue: Miti
Room, Sango Conference Centre,
Cresta Lodge, Harare, Time: 1400
hours
30 June - ZIMRE 16th Annual
General Meeting of members,
Venue: NICOZDIAMOND Audito-
rium, 7th Floor Insurance Centre,
30 Samora Machel Avenue, Time:
1230 hours
THE BH24 DIARY

12. BH24

13. 13 zse
ZSE
Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
Cottco 11.11% 0.90 CBZ -3.33% 14.50
BNC 9.39% 3.61
Innscor 1.97% 77.00
Masimba 0.67% 1.51
Old Mutual 0.17% 250.92
Indices
Index Previous Today Move Change
Industrial 180.74 181.05 +0.31 points +0.17%
Mining 45.17 48.57 +3.40 points +7.53%
Stocks Exchange

14. 14 AFRICA StockS
Botswana 8,664.65 -11.96 -0.14% 12July
Cote dIvoire 246.37 +2.18 +0.89% 07Mar
Egypt 7,949.60 -75.68 -0.94% 06Mar
Ghana 2,343.98 +9.46 +0.41% 06June
Kenya 4,881.56 +12.30 +0.25% 06June
Malawi 12,662.47 +0.00 +0.00% 07Mar
Mauritius 2,074.51 -3.51 -0.17% 07Mar
Morocco 9,544.10 +21.01 +0.22% 07Mar
Nigeria 41,529.11 -40.98 -0.10% 06June
Rwanda 131.27 +0.00 +0.00% 24Oct
Tanzania 2,018.97 +25.40 +1.27% 07Mar
Tunisia 4,624.39 -39.32 -0.84% 07Mar
Uganda 1,503.90 +0.81 +0.05% 10Sep
Zambia 4,242.74 +14.95 +0.35% 10April
Zimbabwe 178.58 +1.54 +0.87% 06June
African stock round up Commodity Prices
Name Price
Crude Oil 1,300.91 -0.21%
Spot Gold USD/oz 1,292.63 -0.26%
Spot Silver USD/oz 19.38 -0.46%
Spot Platinum USD/oz 1,421.25 -0.33%
Spot Palladium USD/oz 798.50 -0.64%
LME Copper USD/t 6,770 -0.18%
LME Aluminium USD/t 1,780 -1.17%
LME Nickel USD/t 18,230 -1.73%
LME Lead USD/t 2,095 -1.41%
Quote of the day —"The secret
of success is consistency
of purpose." - Benjamin Dis-
raeliGlobalshareholder.com

15. BH24

16. Russian natural gas exporter Gazprom
reduced supplies to Ukraine on Monday
after Kiev failed to meet a deadline to
pay off its gas debts in a dispute that
could disrupt supplies to the rest of
Europe.
Announcing that Ukraine will now only
get gas it pays for in advance, Moscow
put the onus on its neighbour to guar-
antee the European Union receives
supplies that transit through Ukraine.
Kiev and Moscow failed to agree over-
night on the price of future gas deliver-
ies, with both sides refusing to aban-
don well-established positions: Russia
offering a discount and Ukraine reject-
ingitasatoolforpoliticalmanipulation.
Talks were already difficult but were
also clouded by the worst political crisis
between Russia and Ukraine since the
Soviet Union collapsed, including the
shooting down of a Ukrainian military
plane by pro-Russian separatists in the
east of the country on Saturday and
accusations by the West that Russia is
arming the rebels. Russian officials said
Alexei Miller, Gazprom's chief execu-
tive, and Energy Minister Alexander
Novak would meet President Vladimir
Putin later on Monday. "Today, from
10:00 a.m. Moscow time, Gazprom,
according to the existing contract,
moved Naftogaz to prepayment for gas
supplies ... Starting today, the Ukrain-
ian company will only get the Russian
gas it has paid for," it said.
Gazprom had demanded Kiev pay off
at least $1.95 billion of a gas debt that
it puts at more than $4 billion by the
Monday morning deadline, or face sup-
ply cuts and the prospect of paying up
front.
Gazprom said on Monday it had filed
a lawsuit at the Stockholm arbitration
court to try to recover the debt, while
Ukraine's Naftogaz said it was filing a
suit at the same court to recover $6 bil-
lion in what it said were overpayments.
A source at Gazprom said supplies to
Ukraine had been reduced as soon
as the deadline passed. EU data sug-
gested that volumes were broadly sta-
ble as of 0630 GMT, but it could take
hours for data on Russian gas flows
via Ukraine to reflect any reduction in
supply in Slovakia or elsewhere. Any
reduction of supply could hit EU con-
sumers, which get about a third of their
gas needs from Russia, around half of
it through pipelines that cross Ukraine.
Earlier price disputes led to the 'gas
wars' in 2006 and 2009 and Russian
accusations that Ukraine stole gas des-
tined for the rest of Europe. - Reuters
...as European Union transfers
€250 mln financial aid to Ukraine
The European Commission has trans-
ferred the first €250 million tranche to
help Ukraine with reforms, part of an
€11 billion 2-year support package.
"Today's disbursement is one of many
steps we are currently making to help
the government of Ukraine in address-
ing the short-term needs as well as
preparing for the implementation of
the Association Agreement. We stand
by Ukraine and we are proving it with
concrete actions," Commissioner for
Enlargement and European Neighbor-
hood Policy Stefan Fule was cited in the
statement as saying.
The second €105 million tranche will
follow in the next months and will be
linked with the progress in reforms
in the areas of anti-corruption, pub-
lic finance management, civil service,
constitutional reform, electoral leg-
islation and justice, TASS reports. —
Voice-of-Russia •
16 INTERNATIONAL NEWS
Russia's Gazprom reduces gas to Ukraine after deadline passes

17. By Natasha Odendaal
As the future of the bulk of South
Africa’s platinum group metals (PGM)
output hangs in the balance on the
back of a protracted strike weighing
on the nation’s three largest produc-
ers, palladium and platinum deficits
were likely to reach two-million ounces
and 1.2-million ounces respectively
this year, Standard Bank commodities
head Walter de Wet told Mining Weekly
Online.
This was an uptick on Standard Bank’s
April forecast of a 815 000 oz platinum
supply deficit for 2014 as a whole – a
volume that could have been down
to 300 000 oz had the strikes not
occurred – and a palladium deficit of
more than 1.5-million ounces. Palla-
dium would close 2015 with a 1.3-mil-
lion-ounce deficit and 2016 with a
1.8-million-ounce deficit, de Wet said.
Further, the palladium price was likely
to breach the $900/oz mark sooner
than 2016, as previously forecast by
the bank earlier this year, owing to ris-
ing palladium exchange-traded funds
and supply constraints as the crippling
strike continued with only a tentative
end in sight.
In April, Mining Weekly reported that
Standard Bank had revised its 2014
palladium price forecast upwards to
$785/oz, while palladium prices were
expected to rise to $875/oz, $938/oz
and $975/oz in 2015, 2016 and 2017
respectively. The market looked bullish
for palladium, particularly as demand
from the US and China rose, he noted.
Palladium prices on Thursday reached
a high of $863/oz, while platinum
prices, which had remained stagnant
since the start of the strike, rallied to
$1 482/oz, before stabilising at around
$1 475/oz.
As with palladium, platinum had sig-
nificant above-ground inventories, but
there was also muted demand for plat-
inum jewellery, which accounted for
30% of overall demand.
Thedemandforgoldjewelleryhadout-
stripped demand for platinum jewellery
owing to the lower gold price.
“The recent price rises in both platinum
17 Analysis
Platinum, palladium deficits to increase

18. and palladium have been driven by
an outlook for improving supply-de-
mand dynamics both in the short and
medium term.
“On the demand side, it appears that
Europeanautosaleshavetroughedand
overall global industrial growth appears
to remain robust,” Barclays precious
metals research analyst Andrew Byrne
said in an emailed response to Mining
Weekly Online.
Cadiz economist Peter Major indicated
that it was possible for the palladium
price to catch up to that of the declining
platinumprice,butshouldthepricerise
further, it was likely that autocatalyst
manufacturers would seek out the use
of rhodium or platinum as a substitute.
De Wet noted that the platinum price
was unlikely to rally past Standard
Bank’s 2014 forecast of $1 470/oz,
as supply was supported by recycled
metal and above-ground stock.
However, should the platinum belt
strike continue until year end, it could
potentially rise to $1 600/oz, which
was in line with Major’s prediction that
the price would likely rise about $50/
oz a month. Major said that, in addition
to the 25% supply from recycling, the
platinum market was already in over-
supply, which had kept the prices low.
“Theplatinumpricewas[already]onits
way down [when the strike started],”
heexplained,sayingthatthestrikewas
holding the price steady and, should it
end in the short term, the price would
continue its decline.
By March, the then two-month-old
Association of Mineworkers and Con-
structionUnion-(AMCU-)ledstrikehad
removed about 670 000 oz of PGMs
from the market, comprising 400 000
ozofplatinum,225000ozofpalladium
and 54 000 oz of rhodium.
ByFriday,thestrikehadcutabout30%
of the year’s output.
“The strikes have removed over
one-million ounces of platinum supply
in 2014 (about 12.5% of global sup-
ply) reducing available above-ground
inventories,” added Byrne.
The growth in PGM recycling would off-
set some of the primary supply short-
fall; however, the markets could enter
a sustained period of fundamental
deficits, which would be supportive of
higher metal prices, he said.
“Even if [the] strike ended tomorrow,
it would take two months to gear back
up production, meaning that conditions
are likely to be similar for much of the
third quarter of the year, and likely into
the fourth quarter too.
“All the while, this will have knock-on
impacts on the wider economy and
[strikes in other sectors] will likely start
to overlap in the third quarter too,”
Nomura economist Peter Attard Mon-
talto said. ― MiningWeekly •
18 Analysis

19. Mobster believes in signs. Like
a weathercock indicating which
direction the wind is blowing,
signs give us a general direction
of things.
Some signs - like the weather-
cock - are practical and tangible.
Others - like the ones Mobster is
about to describe - are more sub-
tle and interpretive. But all signs
are important. In the inquiry of
signs, smoke signifies fire. Every-
body knows that. So as Mobster
sat in a hotel room that was slowly
but surely filling up with smoke as
some electric cables had caught
fire somewhere, a sense of doom
was all too overpowering.
What was overpowering too was
the passive befuddlement of the
hundreds of engineers and elec-
tricity geniuses that were set to
be appointed to the numerous
ZESA boards.
As the room filled up with smoke
to choking levels, all these 'engi-
neers' could do was point at the
smoke and laugh. Mobster is
not an engineer but the smoke
was unmistakably from burning
cables.
Now, Zimbabwe has been suffer-
ing from crippling power short-
ages for a decade and half now,
and most people were pinning
hopes of a resolution to the power
crisis following the appointment of
the new ZESA boards last week.
To those people Mobster says:
"Mwuahahahaha...hahahaha...
Mwuahahahaha...hahahaha....
Mwauaaaaaahahahahahahahaha-
haha..hahahhahaha...Mwauaha-
hahahha..die foolish mortals" (Ok,
remove the die foolish mortals
part, but keep the rest).
But seriously, we are doomed. If,
in the event of a crisis, a pointing
of fingers and laughter are all the
new ZESA boards members can
accomplish then Mobster foresees
a blacked-out future.
Now in the philosophy of signs,
there is the interesting concept
of the 'infinite semiosis' of signs,
which basically follows that an
infinity of further signs both pro-
ceed and precede from any given
sign.
It was therefore very telling too,
that the energy minister and his
permanent secretary both crowed
about how they had amazingly
organised the present event in
"10 minutes" just the previous
day, having sent text messages
to the new appointees informing
them of their appointment.
Significant too, were the contents
of the new boards. New wine into
old wineskins or old wine in new
bottles, nothing good ever comes
out of that. It's coming...and it's
coming a little sooner than you
think. Total black-out.
Or maybe Mobster is just being
notorious for nothing. After all,
the smoke did eventually just dis-
appear and the boards appoint-
ments went through without much
hitches.
Maybe, just maybe, our electricity
problems will just disappear too.
(Mobster is a Zimbabwean phi-
losopher who has an opinion
on just about anything. She
however has a particular liking
for business and economics
stuff. However her opinions
are not necessarily represent-
ative of this platform. You can
send your feedback to her on
mobsterzim1980@gmail.com)
•
19 MOBSTER’S MONDAY MUSINGS
Doomed to darkness