A digital copy of the BH24 (21 December 2015 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.
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'Zim mining laws also should protect communities'
1. BH24 Reporter
HARARE -There is need for the Gov-
ernment to ensure that current mining
sector legislation functions to reduce
rising conflicts between mining com-
panies and the communities in which
these firms operate, a study has
shown.
According to the Centre for Natural
Resource Governance (CNRG) says
there is currently a general absence of
a strong mining law that protect com-
munities.
"The Government has adopted an
extractivist model of development
whereby development is hinged upon
extraction and export of minerals.
"The up-scaling of mining activities
vis-à-vis the absence of a strong min-
ing law, institutional framework and
political will to protect communities
against displacements and other dis-
advantages brought about by mining
mean more communities are going to
be condemned to new poverty in the
coming years. This means more min-
ing conflicts are lined up for Zimbabwe
whichmaydegenerateintoviolentcon-
flicts," said CNRG.
With regards to Zimbabwe's gold sec-
tor, official estimates point to the sector
constituting of 500 000 involved in arti-
sanal gold mining.
But CNRG in its research says it has
discovered that when the small-scale
gold miners discover claims they tend
to be "bulldozed" by larger players who
rush to obtain mining permits before
them.
The CNRG has made some key recom-
mendations in this respect, including:
(mainly) the promulgation of a new
andinclusivemininglawthataddresses
the needs of the contemporary mining
industry.
"In framing the law, Government
needs to consult widely with all stake-
holders who include communities, civil
society and research institutions."
The body also called for the review of
the Communal Lands Act and ensure
that the rights of the larger mining cor-
porations do not supersede the surface
lands rights of rural people living on
communal lands.
On a positive note, Government is
in the process of crafting a policy to
decriminalise the possession of gold, a
move aimed at boosting gold deliveries
to Fidelity Printers and Refiners.
But more needs to be done to tap into
the small-scale gold producers sector.
Meanwhile, according to projections by
Finance Minister Patrick Chinamasa,
the mining sector next year is expected
to rebound, growing 2,4 percent "on
the back of planned investments, and
largely driven by strong performance
of gold, chrome, coal, nickel, platinum
and diamonds," he said in his 2016
National Budget statement.●
News Update as @ 1530 hours, Monday 21 December 2015
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'Mining law also should protect communities'
3. HARARE - Zimasco recently
retrenched over 800 employees
at its Mutorashanga and Kwekwe
mines to owing to viability chal-
lenges.
The source who requested ano-
nymity told New Ziana that oper-
ations in Mutorashanga had
been shut down and workers had
been put on unpaid leave.
“This also applies in Kwekwe,
we had only two furnaces run-
ning but they were shut down
on December 10. All the chrome
ore was shipped and the batch
of ore that was in transit was
cleared on Thursday (December
17).
Workers and contractors were
briefed on the development last
week,” he said.
“Workers were put on unpaid
leave on rotational basis, two
weeks in -two weeks out or one
week in and three weeks depend-
ing with the departments. How-
ever tributors and contractors
will continue mining since they
were given the green light to
mine and sell to third parties,”
said the source.
Zimasco general manager for
marketing and administration,
Ms Clara Sadomba could neither
deny nor confirm the develop-
ment.
Ms Sadomba instead referred
this news agency to stories that
appeared in local dailies News-
day and the Herald on Thursday
concerning an agreement the
company signed with a South
African based firm to operate its
furnaces.
The $12 million lease agreement
is expected to resuscitate oper-
ations at the ailing company
and see the 800 workers re-em-
ployed.- New Ziana.●
3 news
Zimasco shuts down operations at mines
5. HARARE – National Tyre Service
(NTS) slid deeper into the red for the
half year ended September, 2015
after posting a net loss of $164 950
compared to $32 077 in the compar-
ative period last year on the back of a
slump in sales.
In the review period, total group
revenue declined 10 percent to $6.7
million.
NTS chairman Mr Rutenhuro Moyo
said prevailing liquidity constraints
hit on consumer purchasing power
resulting in a drop in sales.
“The company was slow to address
costs in a declining revenue and mar-
gin environment as overheads were
at the same level compared to the
corresponding period last year result-
ing in a loss,” he said.
“Price reductions by suppliers were
not sufficient enough to have an
impact on contribution but negotia-
tions are continuing in order to widen
products offering profitable prices.”
Due to the loss position the group did
not declare a dividend citing the need
to re-invest in the business.
Shareholders also lost out as the
group’s basic loss per share slumped
to minus 0.06 from minus 0.01 last
year.
Mr Moyo said a review of their branch
network configuration was under-
taken in order to improve accessibility
and convenience to customers.
“Two new branches have been
opened in Mutare central business
area and in Harare in September and
November respectively. More ideal
sites will be targeted countrywide in
an effort to improve efficiency in ser-
vice delivery,” he said.
Going forward, Mr Moyo said NTS was
expecting the economic environment
to remain difficult.
“Pivotal to its growth strategy the
company will extend its product
range to include more value offerings,
manage supply chain to ensure key
product availability while continuing
to rationalise and improve the branch
network,” he said.
Besides tyre manufacture and sales,
NTS is also involved in re-tread-
ing.-New Ziana●
5 news
NTS slips deep into the red
7. BH24Reporter
HARARE - Zimbabwe has the capacity
todevelopifstakeholdersinthebusiness
sector exploit human capital towards
developmentalissuesanofficialhassaid.
Speaking during the Megafest Awards
recentlyMegafestCEOMrTafadzwaMat-
sika called on Zimbabwean firms to use
itshumancapitaltodevelopthecountry.
“Zimbabweans must be innovative and
make money through exploiting the
human capital,” he said.
“There is need to channel human capi-
tal towards development of our country
throughuseofeducatedZimbabweans.”
Deputy Minister of Tourism and Hospi-
tality Industry Annastancia Ndlovu who
launched the event said Zimbabweans
must be innovative and be creative
towards developing the country.
“We need to be creative and innovate to
developourcountry.Zimbabwecanonly
grow if we work together,” she said.
“Letususetheresourseswehaveinour
communities to development our coun-
try.
“Government is working on a number
of issues to improve the ease of doing
business in the country which sees Zim-
babwe developing by next year,” Deputy
Minister Ndlovu said.
The 2015 megafest awards were meant
to honour best companies and individu-
als who performed well during the 2015
year.
“AsGovernmentweareworkingtowards
increasing efficiency at our border posts
to allow the smooth flow of goods in the
country and that will improve business
in the country,” she said. She added
that the megafest awards are critical to
the business sector since it’s a platform
which allows companies to compete and
increasing efficiency and production.
Meanwhile Mr Clemence Masango,
the principal director of Immigration
received the award for outstanding male
of the year, followed by Confederation of
Zimbabwean Industries president and
United Refineries Limited CEO Mr Busisa
Moyo and Zimra commissioner-general
Mr Gershem Pasi.
In the outstanding female category,
Standards Association of Zimba-
bwe (SAZ) director-general, Mrs Eve
Gadzikwa came first followed by MBCA
managing director Dr Charity Jinya and
Avenues Clinic managing director Dr
Merissa Kambani in the third position.
MBCA was the outstanding organisation
of the year followed by Zimnat Holdings
and Lafarge Zimbabwe in second and
third position respectively.
The awards are held annually as a way
of recognizing, developing and promot-
ing professional business acumen at all
business levels.●
7 news
Zim should leverage on its human capital
8. HARARE -The mainstream
industrial index opened the
week stronger, bumping 0.92
(or 0,81 percent) to close at
114.13.
Giant telecoms company
Econet Wireless led the risers
with a $0,0175 gain to close
at $0,2025, while banker CBZ
added $0,0100 to trade at
$0,1100.
Conglomerate Innscor rose
$0,0050 to $0,2650.
Trading in the negative terri-
tory was milk processor Dair-
ibord which dropped $0,0034
to settle at $0,0740 while
NicozDiamond shed $0,0001
to close at $0,0151.
The mining index was steady
at 19.53 points as Bindura,
Falgold, Hwange and RioZim
maintained previous price
levels at $0,0100, $0,0050,
$0,0300 and 0,1040 in that
order. - BH24 Reporter ●
ZSE8
Industrials on the up
Peace of mind is good
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10. 10 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
21 December 15
Energy
(Megawatts)
Hwange 438 MW
Kariba 447 MW
Harare 30 MW
Munyati 17 MW
Bulawayo 23 MW
Imports 0 MW
Total 1026 MW
THE BH24 DIARY
11. JOHANNESBURG - The South
Africa's rand rose slightly on
Monday, with subdued trade
ahead of the holidays calm-
ing markets after the previous
week's volatility driven by an
interest rate hike in the United
States and domestic political
turbulence.
By 0707 GMT the rand had
firmed 0,10 percent to 15,0750
per dollar, taking advantage as
the greenback drifted lower.
The dollar, measured against a
basket of major currencies, was
a shade weaker in early trade.
Analysts said, however, the
rand would continue to be vul-
nerable to fundamental eco-
nomic weakness going into the
new year, exacerbated by an
expected stronger dollar.
"Failure to address the coun-
try's economic woes will keep
the South African currency
under severe pressure going
into the new year," analysts at
NKC African Economics wrote in
a note.
Rand weakness has been
relentless in 2015. After open-
ing the year at 11,55, it weak-
ened more than 30 percent
under pressure from a strong
dollar, the global commodities
rout, weaker growth in China, a
US rate hike and domestic eco-
nomic woes.
On the equities market, stocks
opened slightly weaker. By
0710 GMT the Johannesburg
Securities Exchange's Top-40
index was 0,1 percent lower at
43,933 points after losing 2,11
percent in the previous session.
The broader all-share index
also fell 0,1 percent to 48,655
points, having dropped nearly
two percent on Friday. Govern-
ment bonds were mixed, with
the yield on benchmark issue
due in 2026 shedding 0.5 basis
points to 9,35 percent. - Reu-
ters●
regioNAL News11
Rand posts modest gain, stocks ease
12. Singapore - Brent crude prices
fell to levels last seen in 2004 on
Monday, dropping below the lows
hit during the 2008 financial cri-
sis on renewed worries over an
oil glut.
Global production remains at or
near record highs and new supply
looms from Iran and the United
States. Crude markets are also
under pressure following last
week's U.S. interest rate hikes
and on signs of growing US stock-
piles even as more drilling rigs
are deployed.
Brent futures fell almost 2 per-
cent and as low as $36,17 per
barrel on Monday, the weakest
since July 2004 and below the
$36,20 mark reached on Christ-
mas Eve 2008. By 0717 GMT,
Brent had edged back to $36,29,
still down 59 cents from their set-
tlement on Friday.
U.S. West Texas Intermediate
(WTI) futures fell 36 cents to
$34,37 per barrel, holding near
last week's 2015 lows.
Due to production far outpacing
demand, the benchmarks have
fallen more than two-thirds since
mid-2014, when the rout began,
and analysts said there was a ris-
ing risk of further falls.
"The hope for a rebalancing in
2016 continues to suffer serious
setbacks," Morgan Stanley said
on Monday.
The bank cited US output being
"more resilient than most models
originally indicated", the return of
at least 500 000 barrels per day
(bpd) from Iran in the first quar-
ter of 2016, rising Libyan produc-
tion and slowing demand growth
as the main reasons for a contin-
uing supply glut.
Beyond the unexpected gain
in the US oil rig count by 17 to
541, the strength in the US dol-
lar following last week's interest
rate hike - which makes oil more
expensive for countries using dif-
ferent currencies - also weighed
on prices.
"The resilient production data
reflect rising US crude stockpiles,
which have surged to 49, million
barrels, the most for this time of
year since 1930," ANZ bank said.
The US glut adds to global over-
supply as the main producers,
Russia and the Organization of
the Petroleum Exporting Coun-
tries (OPEC), pump hundreds
of thousands of barrels of crude
every day in excess of demand.
Russian production surpassed
10 million bpd, the highest since
the collapse of the Soviet Union,
while OPEC output also remains
near record levels above 31.5
million bpd.
OPEC leader Saudi Arabia upped
production from 10,226 to 10,276
million bpd between September
and October.
Iraq's oil minister Adel Abdul
Mahdi told Reuters over the
weekend that OPEC would stick
to its Dec. 4 decision to not limit
production despite the drop in
prices.
More oil becoming available soon
will add to the glut, with Iran
hoping to ramp up sales in early
2016 once sanctions against Teh-
ran are lifted.
Iran will export most of its
enriched uranium to Russia in
coming days as it rushes to
implement a nuclear deal and
secure relief from international
sanctions.
This comes only days after the US
voted to lift a 40-year-old ban on
crude exports, which could see
some production released on the
global market. - Reuters●
internatioNAL News12
Brent crude oil falls to 2004 low as market rout heads into Christmas
13. ByXhantiPayi
Despite his many political and philosoph-
ical detractors, American diplomat and
political scientist Henry Kissinger is one of
thefewauthoritativevoicesonChina.Hav-
ing served as a key US diplomat during a
time when China was reinventing herself
to what she is today, Kissinger has had a
perspectivefewotheranalystshavetoday.
His views on China are not inconsistent
withtheChinawesee,inthewaysinwhich
itrespondstoglobaldebatesandtensions.
OneneedonlylookatthewayChinavotes
at the United Nations Security Council to
understand its posture on affairs of other
nations. In his book, On China, Kissinger
is seemingly at pains to show that, unlike
theUS,Chinaisnotinterestedinexporting
its values or owning culture and territories
outside itself — that even though it may
seek to be a leading civilisation, it does so
not through an effort to export its values,
buttosustainthemeveninwhatKissinger
himselfcallsthe"newworldorder".
He recounts the China of old, reflecting
that in official Chinese records, foreign
envoys did not come to the imperial court
toengageinnegotiationsoraffairsofstate:
they came "to be transformed" by the
emperor’scivilisinginfluence.
The emperor did not hold "summit meet-
ings" with other heads of state; instead,
audiences with him represented the "ten-
der cherishing of men from afar", who
brought tribute to recognise his overlord-
ship. When the Chinese court deigned to
send envoys abroad, they were not dip-
lomats, but "heavenly envoys" from the
CelestialCourt.
This may seem like an old China, but
modernChinapresentsthesameposture,
albeitinadifferentparadigm.
From sharing its strategies on growth to
discussing its approaches to corruption,
Chinaisopentothosewhowishtodipinto
the reservoir, but it is not particularly keen
to advertise its views or supply the world
withitsvaluesandculture.
Ifthisisaccepted,itiscuriousthatsomany
regarded the summit held in Sandton last
week as "China’s scramble for Africa" or
"China takes up from where the West left
off".
The public sentiment on China reinforces
two notions. First, that Africa remains a
vulnerable, almost pitiful, player in trade
and investment negotiations, freely open
to the ravages of nefarious nations with
money. Second, it represents a misread-
ing of global political and economic condi-
tions as they exist today, and thus Africa’s
uniquepositionofstrength.
The tensions in the Middle East, com-
pounded by frosty relations between
the West and many other regions, have
complicated economic diplomacy a great
deal. Trade and investment relations amid
geopoliticsmakeforlessthanoptimalout-
comes. It doesn’t help that Europe, and
evenJapan,allwhichhavebeencloseeco-
nomic partners to China, face continually
tougheconomicconditions.
There are really very few other places to
look for China to improve her economic
fortunes. China also knows that in Africa,
she has an economic and diplomatic part-
nerthatisnottookeentoimposeitsviews
on China’s social order. Not only is China
looking to Africa for opportunity, it realises
thatithascompetition,havingseenAfrican
headsofstateheadtoIndiatolistentothat
nation’ssalespitch.
The $64bn package prepared by China
shows just how far it will go to promote
itself and gain business advantage over
anyoneelse.Thereisalsonoquestionthat
Africa needs China, as a market for both
minerals and manufactured goods. Africa
also needs Chinese expertise in industry
andinfrastructuraldevelopment.
Mostofall—asChinawellknows—Africa
needs Chinese money to plug the vast
financial deficit preventing Africa from
building the infrastructure that is so critical
forgrowthanddevelopment.
So,leavingbehindtheoldtalkofcolonisa-
tion and exploitation, Africa has one thing
to do: recognise its power to negotiate for
agoodandsustainabledeal.Thatmustbe
preceded by Africa’s extensive plan and
thusoutlineofitsownneedandbargaining
chips.
While visiting Mexico, another develop-
ing nation, in 2009, Chinese president Xi
Jinping made remarks that are important
to consider if we are to be comfortable
in dealing with China: "Some foreigners
with full bellies and nothing better to (do)
engageinfingerpointingatus.First,China
doesnotexportrevolution;second,itdoes
not export famine and poverty; and third,
itdoesnotmessaroundwithyou.Sowhat
elseistheretosay?"
The year is 2015. The question cannot be
whether China wants to exploit Africa, but
how Africa can benefit itself from relating
with the world’s second-largest economy,
which has come knocking at her door. -
BDLive●
13 analysis13 analysis
No doubt that Africa needs what China offers