A digital copy of the Business News 24 (4 June edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.

1. News Update as @ 1530 hours, Wednesday 4 June 2014
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
By Tawanda Musarurwa
•.....butMalaysia,Chinaofferingbet-
terprices.
Belgium is currently the largest importer
of Zimbabwean tobacco in the current
marketing season, having purchased 6,2
million kilogrammes to the tune of $25,4
million, latest figures from the Tobacco
MarketingIndustryBoardshow.
In second place is South Africa, which
has purchased 3,3 million kgs of tobacco
worth$14,8million,followedinclosethird
byChinawhichhaspurchased3,2million
kgs of the golden leaf at a total value of
$22million.
Although China is in third place in terms
of mass sold, it stands in second place in
terms of value because it has been offer-
ing the highest average price for a kilo-
grammeoftobacco.
Amongst the top three, tobacco destined
for the Chinese market has been sold at
an average price of $6,92/kg, followed
by South Africa's $4,42/kg and Belgium's
$4,09/kg.
Malaysia has been offering the highest
average price of $8,72/kg. There has
been a change in position between the
top two, with Belgium replacing South
Africa, which had purchased over 9 mil-
lion kgs of tobacco worth $29,2 million
thistimelastyear.
Intotal,26,3millionkgsoftobaccovalued
at108,2millionhadbeenexportedbythe
end of May. TIMB has confirmed that the
contract floors have dominated sales this
year, and that prices during this year's
tobacco marketing season have been
lowercomparedto2013.
"The current average seasonal price has
remained stagnant at $3,18/kg for the
past two weeks. Last year’s prices for
both auction ($3,58/kg)and contract
($3,78/kg) were firmer than the current
auction ($2,76/kg) and contract ($3,38/
kg)prices.
"Contractors average daily throughput
has declined from a record high of 3.5
million kg to the current 2 million kg per
day.Auctionfloorscontinuetoreceiveless
deliveries per day compared to the same
period last year," said TIMB. In terms of
total contract and auction floors sales to
date, TIMB reports that 179,4 million kgs
oftobaccotothevalueof$570millionhas
beensoldbyfarmers.
The Government had set an initial target
of180kgsforthecurrentsellingseason.
With this target now most likely to be
surpassed this should reflect well for the
agricultural sector as tobacco accounts
for 10,7 percent of Zimbabwe's Gross
DomesticProduct. •
Belgium continues to top tobacco exports

2. 2 NEWS
BH24 Reporter
Zimbabwe’s leading reinsurance com-
pany, Zimre Holdings Ltd's Gross Pre-
mium Written (GPW) remained flat last
year despite contribution by domestic
operations improving over the period.
The group achieved GPW of $76,9 mil-
lion in 2013, which is equivalent to that
written in the previous year.
"The domestic operations contributed
57 percent of the GPW compared to 53
percent in 2012. Malawi, Mozambique
and Zambia contributed 21 percent,
11 percent and 5 percent respectively,
to the total GPW," said chairman Ben
Kumalo.
Operating profit improved to $1,6 mil-
lion from a loss of $2,2 million in 2012,
mainly due to the favourable claims
experience. Group reinsurance opera-
tions adopted a deliberate strategy of
writing only collectable and profitable
business in order to improve liquidity
and profitability.
Profit before tax declined by 40 percent
from $4,4 million in 2012 to $2,7 mil-
lionin2013.Thegroupachievedatotal
comprehensive income of $11 million
in2013,with$10,2millionofthatcom-
ing from its share of the revaluation of
land in one of the group's key associate
companies following the incorpora-
tion in July 2012 of that land into the
greater Harare Municipal boundaries.
The land is being developed into high
density residential facilities.
An review of the group's sectoral
performance reflected mixed perfor-
mances. For reinsurance, although
the 2013 GPW for the sector at $37,4
million was 10 percent lower than the
$41,4 million written in 2012, there a
huge turnaround from an operating
loss of $5 million recorded in the pre-
vious year to a loss of $0,9 million in
2013. The sector contributed 49 per-
cent of the total GPW achieved 2013.
For the Life and Health Reassurance
sector, GPW grew by 21 percent from
$4,2 million in 2012, to $5,1 million in
2013. An operating loss of $1,3 million
was registered in 2013 mainly due to
an increase in claims and an upward
revision of the present value of the
actuarial liabilities.
General Insurance's GPW at $39,2
million was 7 percent higher than the
$36,7 million recorded in 2012. Oper-
ating profit rose by over 100 percent
from $1 million in 2012 to $2,1 million
in 2013, reflecting the recovery in per-
formance of mainly the Malawi opera-
tion.
The group's property sector's total rev-
enue rose 4 percent to $5,2 million in
2013 from 45 million in 2012. Operat-
ing profit declined by 8 percent from
42,4 million in 2012 to $2,2 million
in 2013 mainly due to the escalation
in operating expenses. For the Insur-
ance and Reinsurance Broking sector,
the group said brokerage commission
declined by 6 percent from $1,7 million
in 2012 to $1,6 million in 2013. Man-
agement expects an improved perfor-
mance in the outlook period in view of
ongoing capital raising and restructur-
ing initiatives. •
ZIMRE's GPW remains flat in FY13

3. BH24

4. Building materials manufacturer Tur-
nall Holdings has said it was crucial for
Government to resuscitate operations
at Shabanie Mashava Mines (SMM) to
curb spiraling import costs of chrysotile
asbestos fiber, its main input.
Shabanie Mashava Mines, located in
Zvishavane in the Midlands Province,
ceased operations over four years ago
in part due to ownership wrangles
between the state and former owner
businessman Mutumwa Mawere.
The closure of the mines, which were
the main source of chrysotile fibre in
Zimbabwe, has affected industries
that depended heavily on the fibre, an
ingredientinthemanufactureofasbes-
tos sheets and other products.
Turnall’s managing director John Jere
said continued closure of SMM would
result in needless loss of resources that
could be used locally.
“At peak Turnall and Zimbabwe would
only consume about 5 to 7 percent
of what the mine was producing, so I
am talking of 93 percent of what we
produced in Zimbabwe was exported,
therefore you are talking of big monies,
you are talking of a whole industry that
we should do everything possible to
resuscitate,” he said.
“We are now importing as Turnall as
a result of that and for the last three
and half to four years we have spent
about $22 million on imports which
money could have gone to our own
local industry.”
He said imports were being brought in
from Brazil and Russia.
Turnall, is a subsidiary of the FBC Hold-
ings Group, and the company’s two
manufacturing plants in Harare and
Bulawayo have an annual production
capacity of 120 000 tonnes.
It has two divisions namely Turnall Pip-
ing Products and Turnall Building Prod-
ucts which produce ridges, roof tiles,
ceiling boards and pipes.
The company has since last year been
investing in new plant equipment as
part of a repositioning exercise. —
New Ziana •
4 NEWS
Turnall decries continued closure of SMM
Mr. Mawere

5. By Tawanda Musarurwa
Zimbabwe's Investment One Stop
Shop will succeed to the extent that
it is capacitated with all information
required by a potential investor, an offi-
cial has said.
Founder and Vice Chancellor of the
Women’s University in Africa Profes-
sor Hope Sadza called upon the Zim-
babwe Revenue Authority to make
unclassified information available to
researchers and students in institutions
of higher learning.
Prof Sadza, who sits on several com-
panies' boards, said one of the factors
that has been hindering the success-
ful implementation of the Zimbabwe
Investment Authority's One Stop Shop
wasthelackofadequaterelevantinfor-
mation.
"Facilitating institutions need to set up
One-Stop Shop facilities for potential
investors. "We have talked about it in
Zimbabwe, Zimra has talked about it.
Where is this One Stop Shop? What we
need to know is that when an investor
goesthere,informationmustbereadily
available," she said.
"Academia need to research more on
the area to increase the body of knowl-
edge and increase literature in the area
of customs and trade facilitation."
She was speaking at the inaugural
World Customs Organisation - East and
Southern Africa regional research con-
ference that is being hosted by Zimra.
The WCO is an umbrella body for cus-
toms administrations which seeks to
strengthen capacity of its member
administrations to use customs man-
agement as an effective tool for eco-
nomic development.
She claimed that there was a tendency
of "withholding of official data by facil-
itating Institutions from researchers"
and a general lack of knowledge of the
formal communication channels to be
followed resulting in a lack of exchange
of ideas between academia and cus-
toms and trade facilitation institutions.
Prof Sadza, who is also the chairper-
son of the Zimbabwe Universities Vice
Chancellors’ Association, said the coun-
try's 16 universities were prepared to
work with Zimra to carry out research
on customs, trade facilitation and
socio-economic development.
Speaking at the event Zimra acting
commissioner general of the Anna
Mutombodzi said the authority was
taking steps to engage the academia.
"The Bachelor of Commerce degree in
Fiscal Studies, and a masters compo-
nent, were introduced in partnership
with the National University of Science
and Technology (NUST).
"We will continue to partner with and
engage other universities in our quest
to broaden the knowledge base and
build capacity in the Customs and Tax
fraternity," she said. •
5 NEWS
'ZIA One Stop Shop requires academia input'
Prof Sadza

6. The Tobacco Industry and Marketing
Board (TIMB) on Tuesday said it will
in June begin disbursing a $200 000
revolving fund that will empower farm-
ers to construct new rocket bans for
curing tobacco.
The new bans imitated from Malawi
will use half the firewood farmers are
using at the moment to cure tobacco.
TIMB chairperson Monica Chinamasa
told New Ziana the rocket bans will go
a long way in reducing deforestation.
“We have a $200 000 revolving fund
to enable farmers to construct rocket
bans. The fund will be rolled out in
June and all farmers countrywide will
benefit,” she said. She said communal
farmers are using substandard and
makeshift bans, and that is affecting
the quality of tobacco being brought
for sale.
At the close of the 2012/13 market-
ing season, 166.5 million kilograms of
tobacco had been sold at an average
price of US$3.70 per kilogram, realiz-
ingUS$616.1millioninsales.TIMBhas
since said it expects 10 percent more
tobacco to be sold this year.
Government set this year’s output at
170 million kgs after many farmers
turned to tobacco abandoning other
cashcropswhichdonothaveattractive
producer prices. Since the adoption of
multiple foreign currencies the tobacco
industry has become one of the fastest
to recover from the economic melt-
down of the past decade.
The sector has been on a rebound
as 103 941 farmers registered to sell
tobacco this season. Many farmers
have been shifting to tobacco due to
the favourable prices. Tobacco is one of
Zimbabwe’s major agricultural exports,
accounting for 10, 7 percent of gross
domestic product.
Export destinations for Zimbabwean
tobacco include Belgium, United Arab
Emirates, China, Sudan, Hong Kong,
Indonesia, Philippines, United King-
dom, Spain, New Zealand, Montenegro
and Russia.
Tobacco is expected to show a further
increase for the fourth successive year,
this bods well for Zimbabwe’s economy
which is expected to grow by 6, 3 per-
cent this year driven mainly by mining
and agricultural sector.
The agricultural sector is expected to
grow by 9 percent and this growth is
expected to be driven largely by the
tobacco sector. - New Ziana •
AGRICULTURE6
TIMB disburses $200k revolving fund for rocket bans

7. BH24

8. By Thupeyo Muleya
South Africa has scrapped the payment of
admission of guilt fines by migrants who
overstay in that country, with those found to
have exceeded their welcome facing bans of
between 12 months and five years.
According to a circular addressed to all pro-
vincial, district and port operations manag-
ers signed by the Deputy Director General
Responsible for Immigration Services Mr
Jacky McKay, the new system became
effective from last week. The letter has
since been pasted on all the immigration
counters at Beitbridge Border Post and is
cited as immigration directive number 9 of
2014. “Section 50(1) fines (Overstayer)-de-
partures... in terms of the new act, finan-
cial administrative fines for overstayers will
cease and be replaced with the following
criteria as reflected in regulation number 27
(3) of the new regulations.
“Those who overstay for less than 30 days
(first offence in 24 months period) shall
be declared undesirable for a period of
12 months and those who repeat a simi-
lar offence in 24 months shall be declared
undesirable for a period of 24 months.
“Further, those who overstay for 30 days
or more to be declared undesirable for a
period of 5 years,” read part of the notice.
The department said that changes to the
operating system had been requested, add-
ing that supervisors dealing with the system
were responsible for the finalisation of the
"overstay alerts hits".
“As an interim arrangement from 26 May
2014 onwards, the following procedures
should be followed when alerts are expe-
rienced (a) when new overstay (26 May
2014) is indicated the person will be treated
as undesirable person as per above criteria
and be declare as such using form 19(DHA-
46)," said Mr McKay. "(b) If the hit is still
indicated as a fine with rand value on the
Movement Control System, the hit must be
finalised as a false hit and the declaration
(undesirable) comment should be added
where applicable.” Mr McKay said admin-
istrative fines issued prior to May 26 would
continue, adding that officials should con-
tinue finalising the amounts as normal by
collecting the payments required to keep
the evidence in all cases.
Prior to the new arrangement, those travel-
lers charged for overstaying in South Africa
were fined R1000 which was payable at the
port of entry or at the South African embas-
sies in their respective countries. •
8 NEWS
SA gets tough on overstayers
Over 7000 tonnes of grain delivered to GMB
Over 7000 tonnes of maize have so far
been delivered to the Grain Market-
ing Board (GMB) by farmers since the
beginning of the grain marketing sea-
son, a Cabinet Minister has said.
Agriculture Mechanization and Irriga-
tion minister Joseph Made told New
Ziana that during the same period last
year only 1 600 tonnes had been deliv-
ered. In the 2014 national budget, the
Government projected maize output at
1. 3 million tonnes for the 2013/2014
cropping season. Maize output is pro-
jected to be higher than previous sea-
sons following a good rain season as
well as availability of funding from both
Government and private sector.
“So far the GMB is standing roughly
at 7 616 tonnes compared to only
1 600 tonnes delivered at the same
time last year,” he said. “The season
is pleasing and this is owed to fund-
ing from the Finance Ministry, support
from the Presidential input scheme and
good rains received.” Made said farm-
ers should continue selling maize and
only at stipulated prices. “The Govern-
ment has directed that buyers of grain
purchase a tonne of maize at $390.
Those paying below gazetted prices
are warned.
“The Ministry of Finance has already
released money, hence I urge farm-
ers to continue delivering grain to the
GMB,” he added. He, however, said
Government would not allow Geneti-
cally Modified Organisms (GMOs) into
the country. “I want to emphasize
that Zimbabwe would rather work on
irrigation development, financing the
agriculture sector and mechanization
to increase its yields than introducing
GMOs,” Made said.
This year the economy is projected to
record strong growth of about 6.1 per-
cent, anchored in part on strong recov-
ery in the agriculture sector. — New
Ziana •

9. Heavyweight counters continue to
drive the equities market's improved
momentum.
Following trades today, the Industrials
Index added 0.50 points (or 0.28 per-
cent) to close at 176.63 points.
Conglomerate Innscor pushed up 0.70
cents to 72.70 cents, while OK Zim-
babwe inched up 0.10 cents to 18.10
cents.
Giant telecoms Econet was up 0.99
cents to trade at 68.02 cents.
Also gaining was cement manufacturer
PPC, which went up 3 cents to 213
cents, and AFDIS which advanced 2
cents to settle at 32 cents and
On the downside, Delta slipped 0.31
cents to 116.99 cents, while Colcom
eased 0.30 cents to trade at 22 cents.
The Mining Index continued on a top-
sy-turvy trend, today gaining 0.18
points (or 0.54 percent) to close at
33.72 points after Bindura added 0.02
cents to trade at 2.22 cents.
Falgold, Hwange and Riozim all main-
tained previous trading levels.
— BH24 Reporter •
9 ZSE REVIEW
Equities market continues on the up

10. All things being equal, a bank effec-
tively functions by customer deposits
in return for paying customers an
annual interest payment.
When a critical mass has been
achieved, the bank uses the majority
of these deposits to lend to other cus-
tomers for an assortment of loans,
and at the end of the day (or month,
or year...or whatever the case may
be, the variance between the two
interest rates is the profit margin for
the bank.
Anything else is sub-economics.
And the latter is exactly what we
are witnessing in Zimbabwe, sim-
ply because banks are disinclined to
offer attractive, or at least reasonable
interest rates for depositors.
One of the main reasons why peo-
ple deposit their monies into banks
is to get a fair 'profit' after a specific
amount of time.
But in Zimbabwe chances are the
depositor will suffer a 'loss'.
This is because not only do local
banks not offer a reasonable inter-
est rate on depositor' funds, but they
actually charge the depositor signifi-
cant amounts to keep their money in
their vaults.
Now, it is fair to say that no reason-
ably rationalising human being would
seriously consider losing a portion of
their hard-earned money for the sake
of keeping it in a bank.
It may sound like lightheartedness,
but in truth Zimbabweans are keep-
ing their dollars under their pillows.
According to a survey carried out by
Industrial Psychology Consultants
(Pvt) Ltd recently on the public's
confidence in the local banking sec-
tor, 10,5 percent commented on the
unfavourable bank charges, including
low interest rates on their savings.
They said that this discouraged them
from saving as there was no signifi-
cant difference. Clearly this is an area
that banks need to really consider
restructuring in their strategies.
Interestingly too, 13 percent of the
respondents also showed disgrun-
tlement over the issue of loans and
mortgages.
These bank customers highlighted
that either their banks do not offer
loans or on those that do, the interest
rates and other charges are too high.
So, two issues here: the banks are
offering low interest rates on deposits
and high interest rates on loans.
It is only normal. Because if local
depositors are not putting their mon-
ies in the local banking system, then
the banks are forced to look for fund-
ing offshore, where they obviously
get it at a premium due to the coun-
try's high risk-rating.
Clearly banks are stuck in a vicious
circle that hurts the individuals, the
wider economy and the banks them-
selves.
The solution appears so simple it
hurts: "If these guys (local banks) are
getting lines of credit coming in at 10
percent or 11 percent wouldn't it be
logical to give local depositors, say, 8
percent interest.
This way they will come and deposit
the money, which will then come to
us cheap yet it is local," said Confed-
eration of Zimbabwe Industries past
president Callisto Jokonya told an
RBZ official recently. •
10 BH24 COMMENT
Have Zimbabwean banks lost purpose?

11. The latest round of talks aimed at end-
ing a five-month strike in South Afri-
ca's platinum mines "went well", the
president of the striking Association of
Mineworkers and Construction Union
(AMCU) said on Wednesday, while a
newspaper reported the union had
agreedtoagovernmentwageproposal.
"The meeting went well. The talks are
ongoing," AMCU leader Joseph Mathun-
jwa told Reuters.
Separately, the Business Report news-
paper said AMCU had accepted a gov-
ernment-mediated proposal of a wage
hike slightly less than their "living wage"
demand of R12 500 a month to be
achieved in four years.
The paper cited an unnamed source
close to the government negotiating
team.
New mining minister Ngoako Ramatl-
hodi's task team charged with resolving
the longest strike in South African min-
ing history met AMCU's leadership on
Tuesday. It is due to sit down with the
management of the three major plati-
num firms today.
Strike-hit Impala Platinum spokesper-
son Johan Theron said the companies
were ready to respond to the govern-
mentrecommendationsbutdidnotpro-
vide any details.
About 70 000 AMCU members downed
toolsinJanuaryatImpala,AngloAmeri-
canPlatinumandLonmininastrikethat
has hit 40% of global production of the
precious metal used for emissions-cap-
pingcatalyticconvertersinautomobiles.
Ramatlhodi has been praised by the
hardline union for his readiness to
resolve the strike in his first week in
officeafternumerousroundsoftalksfell
apart. The union is demanding R12 500
a month as basic minimum wage to be
achieved in four years.
The companies have offered pay
increases of up to 10%, which would
raise the overall minimum pay package
to R12 500 rand by July 2017, although
this includes cash allowances for neces-
sities such as housing.— Reuters •
11 REGIONAL News
Latest platinum strike talks 'went well' – union

12. 12 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
4 June 2014
Energy
(Megawatts)
Hwange 699 MW
Kariba 750 MW
Harare 35 MW
Munyati 18 MW
Bulawayo 20 MW
Imports 30 MW
Total 1552 MW
5 June 2014 – Indigenisation Policy Dialogue
Place: SAPES Seminar Room, 4 Deary Avenue Bel-
gravia, Harare, Time : 5pm-7pm
11 June - Rainbow Tourism Group 15th Annual
General Meeting of the Shareholders, Place:
Jacaranda Rooms 2 and 3 at the Rainbow Towers
Hotel and Conference Centre, 1 Pennefather Avenue,
Harare, Time: 12:00
13 June 2014 - Securities and Exchange Com-
mission of Zimbabwe 2nd Shareholders Forum
& Responsible Investing in Zimbabwe Confer-
ence 2014 Place : Cresta Lodge, Harare, Time :
8am -2pm
26 June - Masimba Holdings Limited Thir-
ty-Ninth Annual General Meeting of Members
for the period ended 31 December 2013, Place:
44 Tilbury Road, Willowvale, Harare, Zimbabwe,
Time: 12:00
THE BH24 DIARY

13. BH24

14. 14 zse
ZSE
Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
AFDIS 6.67% 32.00 Colcom -1.35% 22.00
NicozDiamond 4.17% 1.25 Delta -0.26% 116.99
Econet 1.48% 68.02
PPC 1.43% 213.00
Innscor 0.97% 72.70
BNC 0.91% 2.22
OK Zimbabwe 0.56% 18.10
CFI 0.45% 2.22
CBZ 0.07% 15.00
Indices
Index Previous Today Move Change
Industrial 173.46 174.06 +0.60 points +0.35%
Mining 29.39 33.89 +4.50 points +15.31%
Stocks Exchange

15. 15 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 2,324.35 +5.23 +0.23% 02June
Kenya 4,881.56 -13.57 -0.28% 30May
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 41,502.00 +27.60 +0.07% 02June
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 174.91 +0.02 +0.01% 02June
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 merit in
action lies in finishing it
to the end." - Genghis Khan
Globalshareholder.com
Email to smartmoney@cbz.co.zw
or WhatsApp to 0783168249
CBZ SmartMoney is available on all
Mobile Networks and while roaming
www.cbz.co.zw
Buy your
ZESA prepaid
electricity using
CBZ SmartMoney

16. 16 INTERNATIONAL NEWS
Philippines eyes $1bn revenues from proposed new mining law
The Philippine government expects to
double its annual returns from min-
ing to as much as US$1 billion under
a revenue-sharing scheme approved
Monday that will see the government
taking 55% of the industry's net reve-
nues or 10% of gross revenue, which-
ever is higher.
According to Manila Standard Today,
the government panel —the Min-
ing Industry Coordinating Council
(MICC)— will present the proposal to
President Benigno Aquino this week for
approval before submitting it to Con-
gress. Mining taxes in the archipelago
is a problematic issue that has delayed
developmentofthecountry'svastmin-
eral resources, worth around US$850
billion according to the Mines and
Geosciences Bureau (MGB) estimates.
The proposed ruling has the country's
biggest industry group up in arms, as
miners believe that increasing the tax
would kill the industry.
But MGB chief Leo Jasareno disagrees.
He told ABS-CBN News that the pro-
posed bill will make the Philippine min-
ing industry “more competitive and
more relevant to the country’s econ-
omy.” The tax hike will raise mining
companies payments to the govern-
ment by at least 50%. Currently, min-
ers operating under the mineral pro-
duction sharing agreement specified in
the Philippine Mining Act of 1995 only
pay 2% of their gross revenues to gov-
ernment. Slippery slope In July 2012
Philippine president Benigno Aquino
signed an executive order halting the
issuing of mining licences while the
country updates the sector's outdated
legal framework. The order established
a Mining Industry Coordinating Coun-
cil to oversee the sector and banned
mining from some 78 areas considered
sensitive ecosystems, crucial to farm-
ing or tourism or unsuitable for other
reasons.
After the decree and in anticipation of
the new law, foreign investment in the
country’s resources sector plummeted.
Never that high to begin with, invest-
ment in the island nation now attracts
less than $500 million worth of mining
investment, down from nearly $1 bil-
lion in 2010 according to government
data. The archipelago is rich in copper,
gold, silver and chromium and at the
moment produces more than 10% of
the world's nickel, but minerals make
up only 8% of its exports.
The situation is not likely to improve
any time soon — The Fraser Institute’s
latest annual global survey of mining
executives ranked the Philippines as
one of the worse places for investors,
behindonlyKyrgyzstanandVenezuela.
— Mining.com •

17. By Chirstopher Lawton
• In a beer garden in Aschaffen-
burg, east of Frankfurt, the back
of the menu reads: “Zum bezahlen
nehmen wir Geld – kein Plastik!”
Rough translation: “Cash only, no
plastic.”
Cash remains the most popular means
of payment in Germany, representing
53% of turnover in 2011, according to
a study by the central bank, Deutsche
Bundesbank.
The country has among the fewest
card transactions per person in the
EuropeanUnion–18thofthe27mem-
bers in a 2012 European Central Bank
study, below Latvia and Slovenia and
barely ahead of Malta. Swedes, at the
top, averaged 230 card payments a
year, Germans – 39.
Many German restaurants, bars and
cafés deal only in cash. Even where
Germans could use debit cards, they
often prefer cash. Last year, when the
European Union considered getting rid
of the one and two cent coins to cut
costs, Germans objected for fear that
retailers would round up their prices.
The love affair with cash has roots in
the ruinous wars and inflation of the
20th century. The same economic cau-
tion that leads Germans to save 10%
of their annual disposable income also
draws them towards cash.
Concerns about privacy dating to the
Nazi and East German dictatorships
make the anonymity of cash attractive.
And bailing out some of their heavily
indebtedeurozoneneighbourshasonly
solidified the mentality for many Ger-
mans: relying on cash is the best way
to maintain a good overview of one’s
17 Analysis
Letter from Germany: Where cash is still king for payments

18. finances.
But there are signs among some Ger-
mans, especially younger ones, that
the cash addiction is waning. Maik
Wolf, 34, a professor in Berlin, pays for
everything with credit cards – with the
exception of groceries, because Aldi
does not accept credit cards. He has
been lobbying his favourite wine shop
to take credit cards.
“Honestly, I am just way too lazy to
go to an ATM to withdraw money. It’s
out of the way. Then I have to carry it
around, and I could lose it,” Wolf says.
Cash represented 54.4% of the €390
billion in point-of-sale retail purchases
in Germany in 2013, down 1.2% from
a year earlier, according to EHI Retail
Institute, a trade-sponsored research
group.
By 2018, the share is due to sink to
below 50%, making way for debit
and credit cards, the institute predicts.
Germans are also carrying less cash in
their wallets and purses, €103 on aver-
age in 2011, down €15 since 2008, the
Deutsche Bundesbank study says.
A turning point came about 10 years
ago, when Germany’s largest discount
supermarket chains, Lidl and Aldi,
decided to accept debit cards. Demo-
graphics also play a factor, as younger
Germans are more comfortable with
modern forms of payment. In April,
the EU parliament passed a measure
to cap fees on credit and debit cards,
which, if approved by member states,
could lead to more card use.
Payment giants are also working hard
to change German behaviour. Amer-
ican Express launched a credit card
combined with a popular reward sys-
tem at the end of 2012 to encourage
Germans to get swiping.
Last summer, MasterCard helped to
promote an independent study in
Germany suggesting that the costs of
cash, including production and security,
amounted to €150 per German per
year.
AshiftawayfromcashinEurope’slarg-
est economy could translate into big
savings for Europe, according to the
European Central Bank.
That is because in countries where
enough of the shoppers use cards and
other electronic retail payments, costs
for the retail payment services as a
percentage of gross domestic product
become lower.
“It is a considerable, yet largely invisi-
ble, operational cost for the economic
machinery,” totalling €130 billion a year
for the EU, the ECB said in April.
In the EU as a whole, cash payments
still have on average the lowest unit
costs per transaction, but economics of
scale dictate that there comes a tipping
point where debit card payments will
be cheaper. - Financial News •
18 Analysis