Major International Business Headlines Brief::: 16 March 2018

Fri Mar 16 10:48:12 CAT 2018

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Major International Business Headlines Brief::: 16 March 2018

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*  Zimbabwe's coal output set to quadruple as investors arrive

*  Zimbabwean firm to invest $400m in Zimbabwe platinum

*  Nigeria and Kenya inching closer to interest rate cuts

*  South Africa's rand slumps as faltering rally revives 12/$ spectre

*  Africa's Helios ditches London IPO plans, Congo turmoil weighs

*  Nigeria's central bank to delay rate meeting - governor

*  IMF approves $158 mln credit to Burkina Faso

*  Bad blood: The rise and fall of Theranos and Elizabeth Holmes

*  Blackberry modified to 'help drug cartels'

*  Merlin Network strikes streaming deals for independent music in China

*  French baker disputes fine for opening every day

*  Airbus warns over GKN takeover bid

*  S.Africa's ARM posts 15 pct rise in H1 profit on strong manganese business

*  Glencore, Randgold mines quit Congolese industry body ahead of govt talks

*  How Congo faced down some of the world's biggest mining firms

 <mailto:info at bulls.co.zw> 

Zimbabwe's coal output set to quadruple as investors arrive

LONDON (Reuters) - Zimbabwe has attracted around $300 million in its coal industry that will quadruple production next year versus 2017, its mining minister told an investment conference in London on Thursday.

The country, which says its abundant mineral resources include more than 40 exploitable minerals, is seeking to lure foreign investment to reboot its economy after a coup that pushed out veteran leader Robert Mugabe last year.

Minister of Mines and Mining Development Winston Chitando said interest had focused on coal, as well as on lithium and platinum.

He was speaking to investors in London, attending his first conference on Zimbabwe outside Africa since taking office.

In Cape Town in February, he had said battery mineral lithium was among the most popular deposits. [nL8N1PQ7OO]

He told London investors coal output in Zimbabwe would reach more than 8 million tonnes next year compared with around 2 million in 2017. Speaking to Reuters on the sidelines of the conference he said that followed investment of around $300 million. He did not name the investors.

Zimbabwe says it is trying to develop solar power too, but needs to address its energy needs, which are responsible for around 25 percent of its import bill because of a shortfall in domestic generation.

Many miners see a strong business model in coal as a high-margin business and a cheap way to generate power in remote African communities.

The world’s biggest shipper of export quality coal Glencore says the best coal will generate profits for the foreseeable future because of a shortage of new supply following a collapse in investment during the 2015-16 commodity downturn.

It says there is still demand, despite environmental opposition to the most polluting fossil fuel.

Zimbabwe is at the same time trying to promote those minerals that serve a cleaner world economy.

Speaking in Cape Town in February, Chitando announced a lithium deal. In London, he said another would soon follow. He also said there was interest in Zimbabwe’s platinum reserves, which are second only in scale to those in South Africa.

International companies seeking to develop lithium in Zimbabwe - which Chitando has said could meet around a fifth of the world’s needs - include Prospect Resources  and Chimata Gold. [nFWN1Q413Z]

As terms for foreign investors get tougher in some African jurisdictions, notably Democratic Republic of Congo, many investors welcome Zimbabwe’s promise of a stable environment and regulatory certainty as well as a crackdown on corruption.

For anyone investing more than $100 million, Chitando said there would be a special mining licence, meaning particularly favourable conditions, such as negotiating royalties.

 <mailto:info at bulls.co.zw> 

Zimbabwean firm to invest $400m in Zimbabwe platinum

LONDON (Reuters) - Great Dyke Investments (GDI) Ltd said on Thursday it would invest around $400 million to build a precious metals mine and smelter in Zimbabwe, as the country opens up to international business.

The joint venture between Russia’s JSC Afromet and Zimbabwe’s Pen East Ltd expects to produce up to 855,000 ounces(27 tonnes) of platinum group metals and gold per year from the Darwendale PGM project.

    Its deposit, which has total resources of around 1,300 tonnes of platinum group metals (PGMs) is part of the Great Dyke in Zimbabwe and is the world’s biggest PGM asset, the companies said in a statement.

    Zimbabwe is the third largest platinum producer at 445,000 ounces last year, behind South Africa and Russia, according to the World Platinum Investment Council.

GDI’s chief executive Igor Higer expects the project will double the production of PGMs in Zimbabwe. He is one of several investors who have spent more than $100 million, which entitles them to special terms. [L8N1Q61XV]

    The mine life after project ramp-up to full capacity is estimated at 35 years.

    “According to our estimates the investment in the first phase the project construction is $400 million,” said Hepsina Rukato, chairman of the GDI board of directors.

    The companies said that the initial infrastructure of roads, storage and residential facilities have been built.

    The project is expected to create around 8,000 highly skilled jobs at full capacity.

    PricewaterhouseCoopers and SFA Oxford provide analytical support to the project. Cresco Project Finance and EY have been engaged as financial advisers.

Nigeria and Kenya inching closer to interest rate cuts

JOHANNESBURG (Reuters) - Nigeria and Kenya will follow Ghana’s lead and cut rates in the third quarter, a Reuters poll found, as long as there is a monetary committee quorum in Abuja and an easier commercial lending policy in Nairobi.

A Reuters poll of 11 analysts for some of Africa’s major central banks, taken in the past four days, found the majority saying Nigeria and Kenya’s benchmark rates will remain at 14.0 and 10.0 percent respectively next week.

Eight of the 12 members still need to be appointed to Nigeria’s Monetary Policy Committee (MPC) - so there is unlikely to be a meeting next week - while Kenya remains hamstrung by a bill limiting commercial lending rates to 4 percentage points above its official rate.

Nigeria’s central bank was forced to cancel its January meeting as it was unable to reach a quorum. But the Senate plans to start screening new members for the interest rate committee after it held up some of President Muhammadu Buhari’s nominees in a political spat.

Inflation in both Nigeria and Kenya slowed recently, making both ripe for easier policy, and according to the poll there will be 200 and 100 basis points worth of cuts coming this year, respectively.

“There is a case for policy loosening in Nigeria and Kenya, but inflation in Nigeria has been stickier at least until February and the delay in appointing new members of the MPC has also held up policymaking,” said John Ashbourne, Africa economist at Capital Economics.

Nigeria has navigated several challenges in the past three years, dealing with dollar shortages and an economy that came out of? its first recession in a generation in 2017.

But growth in the last quarter of 2017 rose to 1.92 percent compared to a 1.73 percent contraction in the same period of the previous year.

On Wednesday the International Monetary Fund approved a request by Kenya to extend by six months a stand-by loan that was due to expire at the end of March, giving it time to finish mandatory reviews.

Amending a bill on interest limits for commercial bank loans is one of the conditions the IMF needed to approve the “rainy day” loan facility and so an amendment could happen soon, said Aly-Khan Satchu, CEO of Rich Management in Nairobi.

The bill meant banks decided a large number of borrowers - mainly small traders and informal sector workers - were too risky to receive loans.

Unless the bill is scrapped or modified to take advantage of slower inflation and rates fall further, banks are likely to exclude yet more would-be borrowers from credit - effectively tightening rather than easing monetary conditions.

After 600 basis points worth of cuts in the past two years, Ghana is expected to press on and cut 100 basis points to 19.0 percent later this month and then continue chopping until it reaches 17.0 percent by end-year.

South Africa, Africa’s most industrialised economy, is also closer to cutting rates this year but it depends heavily on a decision by Moody’s ratings agency later this month. [ECILT/ZA]

South Africa's rand slumps as faltering rally revives 12/$ spectre

JOHANNESBURG (Reuters) - South Africa’s rand slumped to a one week low on Thursday as a lack of momentum to push the currency beyond a recent milestone and fears of global trade war spurred investors to buy dollars.

At 1440 GMT, the rand was 0.6 percent weaker at 11.8500 having started the day steady around 11.70 before traders began eyeing short dollar positions as New York trade commenced.

“The rand has been extremely flat. We’ve seen moves mostly between 11.60 and 11.90. Our view is purchasing dollars for anything below 12 rand is a massive discount, considering the fair value is closer to 12.85,” said strategist at Peregrine Treasury Bianca Botes. The rand crossed the threshold of 12 to the dollar on March 2.

The onset of risk off sentiment as investors looked ahead to the U.S. Federal Reserve’s policy meeting next week, where the bank is expected to raise interest rates, saw traders positioning for a greenback rally close rand positions.

The dollar index was up 0.26 percent.

As a result commodity prices fell, with gold, platinum and copper all down about 0.5 percent.

In fixed income, the yield for the benchmark government bond due in 2026 rose 5 basis points to 8.125 percent.

In the equities market, the All-Share index continued to slide, owing to the continued decline in entertainment and technology firm Naspers, which fell 2.05 percent to 3,465 rand.

The was down 0.38 percent to 58,203 points. The Top-40 index weakened for the third straight session, falling 0.34 percent to 51,613 points.

Cement maker PPC was down 6.59 percent to 7.23 rand after it announced on Thursday a 2.1 billion rand ($177.44 million) black empowerment top-up scheme that will give employees a 10 percent shareholding in the South African business.

“BEE (black economic empowerment) deals do mean that some money has to be spent and some restructuring has to happen. That is not always positive in the short-term so often times pressure does come onto the stocks,” said Independent Securities trader, Michele Santangelo.

Information Technology company EOH continued to slid from the previous session after flagging an up to 25 percent decline in half-year headline earnings per share. It closed 11.76 percent down to 52.50 rand.

($1 = 11.8350 rand)

Africa's Helios ditches London IPO plans, Congo turmoil weighs

LONDON (Reuters) - African mobile phone mast firm Helios Towers on Thursday pulled its plans to list in London, with one banker saying the expected IPO price was too low for shareholders who had been valuing the firm at as much as 2 billion pounds ($2.8 billion).

Helios, which operates phone masts in Ghana, Congo Republic, Democratic Republic of Congo and Tanzania, said it had received “considerable interest” from institutional investors who liked its business plan and growth prospects.

However, without giving reasons, it said shareholders had decided to withdraw from the listing, which had been scheduled for next month.

The banker involved on the deal said investors were worried about the political and policy risks in Democratic Republic of Congo (DRC) and Tanzania.

“The valuation from market feedback was not enough for the shareholders. We had a lot of interest from investors but they wanted a discount for the political risk in DRC and Tanzania,” the banker, who asked not to be named, said.

Millions died in a 1998-2003 civil war in Democratic Republic of Congo, and a deepening crisis over President Joseph Kabila, who was meant to leave office in 2016, is raising fears of the vast nation of 75 million people imploding once again.

Last month, the front cover of the influential Economist magazine carried a picture of heavily armed Congolese soldiers walking down a road below the headline “Heading back to hell”.

Tanzania, by contrast, is politically stable but President John Magufuli, nicknamed the ‘Bulldozer’ for his style, has put off foreign investors with his heavy-handed attacks on the mining sector as part of an anti-corruption drive.

Helios is owned by telecom firms Millicom and Bharti Airtel and hedge funds including Albright Capital Management and Soros Fund Management, which owns more than 20 percent.

Helios was formed in December 2009 and owns around 6,600 towers in Ghana, Tanzania and Democratic Republic of Congo.

On March 2 it said it was targeting an IPO on the main market of the London Stock Exchange in early April.

($1 = 0.7154 pounds)

Nigeria's central bank to delay rate meeting - governor

LAGOS (Reuters) - Nigeria’s central bank will delay its next interest rate-setting meeting after a political spat over nominations for its Monetary Policy Committee, governor said on Thursday.

Governor Godwin Emefiele told CNBC the meeting scheduled for March 19-20 would be delayed by about seven to 10 days, or at the latest, until the first week of April.

Nigeria’s Senate will next week consider a report into nominations for the central bank’s monetary policy committee, its president said on Wednesday, a move that could end an impasse that has halted policy decisions.

IMF approves $158 mln credit to Burkina Faso

DAKAR (Reuters) - The International Monetary Fund (IMF) on Wednesday approved a three-year, $157.6 million credit facility for Burkina Faso, in part to help boost security after a spate of attacks by Islamist insurgents.

Jihadists linked to al Qaeda killed eight people during an attack on the French embassy and the army headquarters in the capital Ouagadougou this month, the third major attack there in just over two years. [nL2N1QP0CA]

“Burkina Faso faces significant development challenges, which have intensified in the recent period due to security shocks and social unrest,” said IMF Deputy Managing Director Mitsuhiro Furusawa in a statement.

The agricultural economy is expected to grow 6 percent this year, down from 6.5 percent in 2017, but above the 5.9 percent in 2016, the IMF said, driven by cotton production and mining.

Bad blood: The rise and fall of Theranos and Elizabeth Holmes

Elizabeth Holmes, aged 19, came up with an idea that she believed could change the world.

There was just one problem: it didn't work.

However, that didn't stop her creating a multi-billion dollar company, Theranos, on the back of it.

On Wednesday the illusion finally shattered as she lost control of the firm and was fined $500,000.

Neither she nor the company admits any wrongdoing, but the dream that created Theranos and made Ms Holmes a billionaire was well and truly dead.

Theranos founder charged with $700m fraud

Like all good internet start-ups, Theranos and Ms Holmes had a great story. Her father worked for government agencies, often overseeing relief work and she was brought up wanting to change the world for the better.

Aged 19, she dropped out of Stanford University shortly after filing her first patent, for a drug-delivery patch that could adjust dosage to suit an individual patient's blood type, and then update doctors wirelessly.

"Edison" - the Big Idea

The patch never made it to market but the big idea - the one upon which the whole hoopla of Theranos was built, was a machine that could test for a variety of diseases through only a few drops of blood from a person's finger.

Naturally, it too came with a story: as a child she had hated needles, and she would tell how her mother and her grandmother fainted at the sight of them.

But more than that, it really could have been a game changer.

Called "Edison", after the inventor, it promised to revolutionise blood testing. Theranos planned to charge less than half the rates charged by Medicare and Medicaid in the US - potentially saving the US government $200bn over the next decade.

It would democratise the testing process, allowing anyone to get a test done at a pharmacy and have it analysed in hours. Theranos was what every investor loves - an industry disrupter, a David to take on the Goliaths of the diagnostics industry such as LabCorp and Quest.

By 2014 the company had raised more than $400m and was valued at about $9bn. Ms Holmes was worth $4.5bn, according to Forbes magazine, making her the youngest self-made female billionaire.

She had also convinced big names on to her board including two former US Secretaries of State, Henry Kissinger and George Schultz. With hindsight, it is easy to point out that few of the names, while famous, had much to do with medicine or science.

Meanwhile, Ms Holmes was an interviewer's dream: she cultivated a Steve Jobs image, wearing only black turtleneck sweaters in public. She quoted Jane Austen by heart. She went vegan and talked enthusiastically of her favourite wheatgrass-celery-cucumber "green juice". She spoke on panels with Bill Clinton, and gave impassioned TED talks.

There was even talk of making a movie based on her, tentatively titled Bad Blood.

But if she talked the talk, there were hints that Theranos did not quite walk the walk. To start with there was the obsessive secrecy. Ms Holmes was founder, chief executive and chairman. Nothing was done without her approval. And when it came to talking about "Edison", the shutters came down.

This is what she said to a New Yorker reporter when he asked how "Edison" worked: "A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel."

Was this secrecy - or a cover-up?

Investigations

Not everyone was a believer. Bill Maris, who runs Google Ventures (GV) in 2013 decided not to invest. In an interview with Business Insider, Maris said he had got a member of his life-science investment team to take the blood test. It turned out it wasn't as simple as the publicity claimed. Maris said: "It wasn't that difficult for anyone to determine that things may not be what they seem here."

One journalist who was more than suspicious was the Wall Street Journal's John Carreyrou. A two-time Pulitzer Prize winner, he worked patiently to find out what was really going on at Theranos, talking to employees who started to tell a very different story from that of the dazzling public image.

Some were saying that the "Edison" results were inaccurate. Others revealed that the vast majority of tests were not done in Theranos labs at all, but in conventional machines bought from mainstream suppliers.

After his story was published by the Journal in October 2015, the US financial regulator, the Securities and Exchange Commission, opened an investigation.

The Centers for Medicare and Medicaid Services, which oversee blood testing laboratories, revoked Theranos' licence. Within a year the company began shutting down its labs and laid off more than 40% of its full-time employees.

Forbes magazine revised Ms Holmes' wealth down to "nothing".

The company has survived and managed to get financing to rebuild itself, but as of Wednesday Ms Holmes lost control of it, gave up all her shares and was fined $500,000. Looming over her is the possibility that federal prosecutors will pursue criminal charges.

The SEC summed up what was wrong with Ms Holmes and Theranos in a damning report: "Innovators who seek to revolutionise and disrupt an industry must tell investors the truth about what their technology can do today - not just what they hope it might do someday."

Theranos said: "The company is pleased to be bringing this matter to a close and looks forward to advancing its technology."

It is now banking on a new development, the Mini-Lab, which it says combines the capabilities of an array of traditional diagnostic instruments.

But it has an uphill struggle. Despite changing its management and restructuring, it has a reputation that will be hard to live down, with or without Elizabeth Holmes.--BBC

Blackberry modified to 'help drug cartels'

The chief executive of a company that created highly-secure smartphones allegedly used by some of the world's most notorious criminals has been indicted.

Canadian-based Phantom Secure made "tens of millions of dollars" selling the modified Blackberry devices for use by the likes of the Sinaloa Cartel, investigators said.

The charges marked the first time US authorities have targeted a company for knowingly making encrypted technology for criminals.

The Department of Justice arrested Vincent Ramos in Seattle last week. He was indicted on Thursday along with four associates.

The BBC has been unable to reach Phantom Secure.

They are charged with racketeering and conspiracy to aid the distribution of drugs. Both crimes have a maximum penalty of life in prison. Mr Ramos is the only one of the group currently in custody.

"This organisation Phantom Secure was designed to facilitate international drug trafficking all throughout the entire world," US attorney Adam Braverman told the BBC.

"These traffickers, including members of the Sinaloa Cartel, would use these fully-encrypted devices to facilitate their drug trafficking activities in order to avoid law enforcement scrutiny."

'Handful of other organisations'

Blackberry did not respond to requests for comment on Thursday - and investigators would not say whether the firm had worked with them on this case. Mr Braverman said Blackberry was not alone in having its handsets altered for illegal purposes.

"Our understanding is there are a handful of other organisations that exist like this. The FBI, and our office, will continue investigating not only Phantom Secure but any other company that provides this kind of communication device to criminal organisations."

He added that while almost every smartphone on the market offers hard-to-crack encryption - as well as apps from Facebook, Google and Apple - Phantom Secure should be held culpable for what the users of its services were doing.

"The difference is this company was specifically-designed to aid international drug trafficking organisations," he said.

"The only way that you're able to actually utilize one of these devices and obtain one of these devices is if somebody else vouched for you."

Phantom Secure sold devices on a subscription basis at a cost of $2,000-$3,000 for around six months of use.

In order to become a customer, an existing user must vouch for the new person. That system, authorities said, was a way of preventing law enforcement from getting hold of the devices.

Agents estimated as many as 20,000 Phantom Secure-modified handsets are in use around the world.

Communications through the phones are automatically routed to servers in Panama and Hong Kong, according to court documents, making data more difficult to trace.

Phantom Secure could also remove key functionality from the devices to lock them down, such as voice communication, microphone, GPS, camera, internet and messaging apps, leaving just the text functionality.

Law enforcement authorities have repeatedly been frustrated by encryption technology making it harder to access communications between suspects.

In 2016, Apple refused to provide a tool that would allow the FBI to unlock an iPhone belonging to Syed Farook, a man involved in a mass shooting that resulted in the death of 14 people.

On Thursday, a spokesman for the FBI reiterated the agency's concern about criminals being able to "go dark" and hide behind these sophisticated technologies.

Privacy and open rights activists argue that removing or just weakening encryption would put everyone at risk of data theft and surveillance - not just criminals.--BBC

Merlin Network strikes streaming deals for independent music in China

Merlin Network has struck licensing deals for its members, such as Diplo's Mad Decent record label, to enter the Chinese market

Digital rights agency Merlin Network has said it has signed agreements for its members to distribute music on China's major streaming platforms.

The firm announced deals with NetEase Cloud Music, Xiami Music, and Tencent Music Entertainment Group, which includes QQ Music, Kugou and Kuwo.

Merlin said the firms cater for about 90% of China's digital music listeners.

Merlin's members work with artists such as Diplo, Death Cab for Cutie and Papa Roach.

Merlin Network, which is headquartered in Amsterdam, negotiates digital rights for independent record labels.

It said the licensing deals would "expand the range and diversity of music legitimately offered in the Chinese market, and make music from the most successful and unique independent artists available legally in China for the first time".

Terms were not disclosed.

China is a growing market for the music industry, with revenues from recorded music increasing by more than 20% in 2016, according to the International Federation of the Phonographic Industry.

Last year, Universal Music Group announced a deal with Tencent, which gave Tencent the exclusive right to sublicense content to other providers in China. Tencent has also signed an agreement with Warner.

Merlin's approach differs because it has not granted exclusive rights to one service.

Merlin chief executive Charles Caldas said the firm wanted to have its own relationships with distributors, without ceding control to another company.

"Putting an entire market in the hands of one of the customers... just felt inherently inefficient to us," he said.

He added that he expects the agreements to be "lucrative in the context of the market".

Merlin works with about 20,000 record labels and distributors in more than 50 countries. The firm says it represents about 12% of the world's digital recorded music market.--BBC

French baker disputes fine for opening every day

A French baker has been fined €3,000 (£2,650) for opening his business seven days a week, breaking labour rules.

Cédric Vaivre, who runs the only bakery in Lusigny-sur-Barse in north-east France, was open every day during the summer of 2017 to serve tourists.

A local decree in place for over a decade bans bakeries from opening seven days a week.

Mr Vaivre is reportedly refusing to pay the fine and his community, including the local mayor, is supporting him.

"There is nothing worse than closed shops when there are tourists," said Christian Branle, Lusigny-sur-Barse's mayor. He is hoping to meet with the official from the French department of Aube who imposed the fine.

A petition in support of the 41-year-old baker has attracted more than 2,000 signatures.

Mr Vaivre told local media he only wants his bakery La Boulangerie du Lac to be open seven days during the summer months to deal with the demands of tourists.

"I only did my job," he said in December after labour inspectors were alerted to his case.

The town of 2,000 people experiences an influx of tourists visiting the lakes at a nearby protected regional park during the summer.

In 2017, over 120 local businesses were asked by the employers' bakers union in Aube whether they wanted to maintain the decree Mr Vaivre broke. The majority reportedly said they wanted to maintain the rule that mandates them to have a day of rest.--BBC

Airbus warns over GKN takeover bid

Airbus has warned it would be "practically impossible" to give new business to engineering giant GKN if it was bought by turnaround specialist Melrose.

GKN makes wing components and other key aircraft parts for Airbus, which is its biggest customer.

However, it is fighting off a hostile bid from Melrose, saying it fundamentally undervalues the firm.

GKN employs more than 59,000 people, with 6,000 in the UK.

Tom Williams, Airbus's chief operating officer at its commercial aircraft division, said: "The nature of our industry is one that requires a commitment to long-term investment and strategic vision.

"The industry does not lend itself to shorter term financial investment which naturally reduces R&D budgets and limits vital innovation.

"It would be practically impossible for us to give any new work to GKN under such ownership model when we don't know who will be the long-term investor."

His comments were first reported by the Financial Times.

Earlier this week, GKN rejected what Melrose called its "final" offer. Melrose said the bid valued the company at £8.1bn.

GKN chairman Mike Turner said: "The comments from Airbus that stress the need for long-term investment and strategic vision in our industry emphasise our firmly held belief that Melrose is not an appropriate owner of GKN.

"Its management lacks the relevant experience and its short-term business model is inappropriate for GKN's customers and investors."

Christopher Miller, chairman of Melrose, said his company "invests in its businesses for the long term".

He added: "Under Melrose, shareholders and customers will be able to enjoy a considered and longer-term process of value creation, investment and business enhancement, which is clearly not an option under continued GKN ownership."

The intervention by Airbus, GKN's biggest customer, is as dramatic as it is unusual.

The takeover bid by the turnaround specialists Melrose is described as hostile, because it was not sought by GKN's management. But it is Melrose that is experiencing hostility on several fronts.

The board of GKN, MPs, pension fund trustees and now a key customer have all very publicly questioned Melrose's attempt to buy one of Britain's oldest engineering giants.

Airbus's decision to wade in raises new concerns for GKN shareholders. They have two weeks to decide whether to back the bid or send Melrose packing. The share price of GKN suggests this is far from a done deal.

MPs' concerns

GKN also makes parts for Boeing 737 jets and Black Hawk helicopters, as well as parts for Volkswagen and Ford cars.

Under the terms of the Melrose bid, GKN investors would receive 81p in cash and 1.69 new Melrose shares for GKN share they held. GKN shareholders would end up owning 60% of Melrose.

However, GKN says a fall in the Melrose share price has reduced the value of the cash and shares offer.

GKN has fought hard against the bid, offering to give back £2.5bn to shareholders and agreeing to merge its car unit with US company Dana.

The takeover approach has raised fears among unions and MPs that GKN, one of the UK's largest industrial firms, will be broken up and sold to overseas owners.

The Pensions Regulator has warned that the Melrose takeover could affect the company's ability to fund its pension scheme.

Last week, a cross-party group of MPs wrote to the Business Secretary, Greg Clark, saying the Melrose takeover should be blocked.

A brief history of GKN

*         Founded in 1759 as an ironworks in South Wales

*         Involved in aerospace, automotive, materials and manufacturing engineering

*         Operates in 30 countries with more than 59,000 employees

*         Employs 6,000 staff in the UK, mostly in aerospace and automotive technology

*         Ten UK sites, including Bristol, Cowes, Luton, Portsmouth, Birmingham and Telford

*         Chief executive Anne Stephens took over in January--BBC

S.Africa's ARM posts 15 pct rise in H1 profit on strong manganese business

JOHANNESBURG (Reuters) - African Rainbow Minerals Ltd (ARM) posted a 15 percent rise in first-half profit on improved performance at its manganese, coal and copper divisions.

Headline earnings per share (HEPS) rose to 1,023 cents ($0.86) in the six months ended Dec. 31 from 893 cents in the same period a year earlier. That was in line with the South African diversified miner’s guidance.

HEPS is the main profit measure in South Africa that strips out once-off items.

Headline earnings climbed to 1.945 billion rand from 1.693 billion rand, boosted by improved income from the manganese division, ARM Coal, ARM Copper and the Modikwa mine.

The manganese division’s headline earnings rose 131 percent to 872 million rand due to higher sales and alloy prices, and as the company sold more high-grade manganese ore.

ARM declared a dividend of 250 cents per share for the first half.

“We are pleased to have declared a maiden interim dividend and will continue to consider interim and annual dividends taking into account amongst things our financial position, the outlook for our operations and commodity markets, capital expenditure and growth,” ARM said in a statement.

($1 = 11.8888 rand)

Glencore, Randgold mines quit Congolese industry body ahead of govt talks

(Reuters) - Mines run by Glencore, Randgold Resources and three other international companies have quit the Democratic Republic of Congo’s chamber of commerce, saying the industry body does not adequately represent their interests after the introduction of a new mining law.

The miners said in a joint statement that a team representing the companies had arrived in Kinshasa and would begin detailed talks soon with the government on implementation of the new rules signed into law last Friday by DRC President Joseph Kabila.

The law, passed by parliament in late January, replaces an earlier code from 2002. It raises royalties on minerals across the board and removes a clause that protected miners from changes to the fiscal and customs regime for 10 years.

International mining companies including Glencore, Randgold, Ivanhoe Mines, MMG and China Molybdenum have vigorously opposed the new law. Kabila has pledged to work with them while implementing it in Africa’s biggest copper producer.

At least five mines - which churn out more than 85 percent of Congo’s copper, cobalt and gold production - resigned from the industry body, the joint statement said.

How Congo faced down some of the world's biggest mining firms

DAKAR (Reuters) - In an ornate room in Democratic Republic of Congo’s presidential palace last week, some of global mining’s most powerful men faced off against government officials over proposed changes to the country’s mining code. Facing the officials, including President Joseph Kabila, the executives at times threatened to pursue arbitration or close mines if the government went ahead with changes including royalty increases, according to one of the president’s top advisers, Barnabe Kikaya bin Karubi, who attended the meeting. But there was no mistaking the sense of defeat as executives from Glencore, Randgold, Ivanhoe and other firms descended the red carpeted stairs after six hours to accept before the media a mining code that hikes taxes and removes exemptions for cobalt and other minerals. It was an extraordinary climb down for companies that had campaigned tooth-and-nail for six years for better terms, and the president signed the bill into law two days later.

Congolese officials close to the process say that, in being so publicly combative, the miners overplayed their hand, and in so doing hardened the government’s resolve. “We realised the bad faith on their part,” said Patrick Kakwata, president of the National Assembly’s Natural Resources Commission, which oversees mining legislation.

“They only wanted to look after their own interests and not also the interests of the Congolese people.”

The changes to the mining code in Congo, which supplies some 60 percent of the world’s cobalt, could have repercussions for consumers around the world if mining companies pass on costs.

Cobalt is a key ingredient in lithium-ion batteries that power smartphones and electric cars. Rising demand for those products has caused cobalt prices to more than triple in the last two years.

The Congolese government’s success in facing down the companies’ lobbying could also signal a shift in the balance of power as countries sitting on increasingly lucrative resources become emboldened. Congo’s effort could serve as a model for other countries looking to boost mining sector revenue, particularly those that can leverage demand for prized metals like cobalt.

TEAM DISPATCHED

Meeting participants Glencore, Randgold, Zijin, China Molybdenum and Ivanhoe declined to comment for this story. The other participant, MMG, did not immediately respond to a request for comment.

Early last month, Randgold publicly threatened to challenge the new code through international arbitration if Kabila did not return it to the mines ministry for further consultation with industry.

And, in December, several of Congo’s largest mining companies said in a statement that an earlier version of the code passed by the lower house of parliament would “cause the certain death of a young industry”.

On Thursday, the mining companies said in a statement they had dispatched a team of legal and technical specialists to Kinshasa for talks with the Congolese government about drafting measures to implement the code.

The companies said they hoped those discussions would include negotiations over royalties and taxes as well as recognition of the previous code’s stability clause.

Mines Minister Martin Kabwelulu, however, said after last week’s meeting that nothing agreed to in the follow-up negotiations could contradict the terms of the new code.

The new mining code strips away a stability clause protecting existing investments from changes to the fiscal and customs regime for 10 years, opens the door for cobalt royalties to increase five-fold and introduces a 50 percent windfall profits tax.

The new code applies to all minerals, including copper, of which Congo is Africa’s top producer.

Companies could still challenge it through international arbitration. It is also unclear how rigorously the code will be enforced in a country where informal arrangements often supersede legal provisions.

In a joint statement issued by the Congo government and the mining executives directly after the meeting, the miners said they had received assurances from Kabila “that their concerns will be taken into account through a constructive dialogue with the government after the promulgation of the new mining law”.

“SUCKERED” Private investors have poured money into Congo since Kabila signed the 2002 mining code at the tail end of a 1998-2003 war. But locals have seen few benefits. Congo remains one of the world’s least developed countries, plagued by corruption and poor governance.

In March 2015, the government submitted a bill to parliament that proposed raising royalties to levels higher than in the 2002 code but still lower than in most rival mining countries.

Mining companies resisted, saying that proposed changes to the code would “put the future of the country’s mining industry at grave risk” and urged the government to retain the 2002 code.

Following a steep drop in commodities prices, Congo’s government buckled to industry pressure and announced in March 2016 it was suspending consideration of the new code.

But as the commodity slump bit into the national economy last year - stretching foreign reserves to breaking point and pushing inflation to 47 percent - the government needed cash.

Parliament toughened up the code at the start of this year.

Protections under the previous code’s stability clause were axed entirely. A 10 percent royalty was introduced on “strategic substances”, which the prime minister’s office said this week would include cobalt and possibly copper.

Companies were also mandated to repatriate 60 percent of export revenues to Congo, up from 40 percent in earlier drafts.

Lawmakers involved in the negotiations did not provide clear explanations for how these last-minute changes came about, but two of them said that they had grown inured to doomsday warnings from miners about the code killing investment.

“There is this contradiction that emerges each time ... when the miners declare losses (in Congo) when their mother company is only enjoying success,” said Alain Lubamba, an MP closely involved in the revision process.

“This means that we’re being suckered.”

Mining companies in Congo typically say that the high risk and cost of investing in the vast country with poor infrastructure hit profitability, justifying demands for favourable terms.

TENSE TALKS

Randgold, based in Jersey in the English Channel, formed a new lobbying platform with Glencore and others and requested an audience with Kabila.

The president accepted a meeting with top executives from six mining companies, but insisted they come to Kinshasa in person; no stand-ins would be admitted.

After a last-minute postponement by a day, the meeting finally began at around 2:30 p.m. last Wednesday with Kabila presiding.

Randgold CEO Mark Bristow, the miners’ designated spokesperson, started by laying out their main concerns and imploring Kabila to re-open negotiations. The other executives chimed in from time-to-time, according to Kikaya, the Kabila adviser.

“For three hours, they were very confrontational and they were talking in terms of closing down the mines,” Kikaya said. Bristow couldn’t be reached for comment.

Kabila interjected occasionally, Kikaya said, urging the miners not to pursue arbitration.

“The president explained that this would be bad for everyone. He said, ‘Look you are a businessman. If you make a mistake, you lose money. I am a politician’,” Kikaya said.

A breakthrough appeared to come after Kabwelulu, the mines minister, promised the miners that their concerns would be addressed on a case-by-case basis in regulations to be hammered out after the code was signed, according to Kikaya.

Kabila then exited the room, leaving his advisers and the executives to figure out how to break the news.--bbc

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

CBZ

finals and analysts briefing

Stewart Rooms, Meikles

15/03/2018 3pm

Econet

3 2017 dividend of 0.9379c per share record date

16/03/2018 

NicozDiamond

finals and analysts briefing

7th Floor Auditorium, Insurance Centre, 30 Samora Machel Avenue

20/03/2018 12pm

Old Mutual Zim

analysts briefing

Stewart Room, Meikles

20/03/2018 2pm

Simbisa

EGM

Royal Harare Golf Club

21/03/2018 9am

First Mutual Properties

Financial Results Presentation

The Venue Avondale

21/03/2018 2pm

First Mutual Holdings

Financial Results Presentation

The Venue Avondale

21/03/2018 3pm

Zimplow

final dividend 0.13c per share record

23/03/2018 

TSL

AGM

28 Simon Mazorodze Road, Southerton

27/03/2018 12pm

Willdale

AGM

19.5km peg, Lomagundi Road, Mount Hampden

29/03/2018 11am

Good Friday

30/03/2018 

Easter Monday

02/04/2018

Zimbabwe

Independence Day

Zimbabwe

18/04/2018

Workers’ Day

01/05/2018

Africa Day

25/05/2018

Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

 <mailto:info at bulls.co.zw> 

DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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