Global Mining conglomerate, Anglo American closed 2018 on a high note registering significant growth in production during the last quarter of year.
Anglo operates and owns significant stakes in all major mineral business interests across the world. The company’s flagship mines are in Africa, Canada being another host of key revenue generating business for the over 100 years mining giant. For the last 3 months of 2018 the Group which is listed in various stock markets including Botswana Stock Exchange reported a 7% increase in total production on a copper equivalent basis excluding the effect of the stoppage at Minas-Rio.
According to a report released by Anglo this week, the company’s diamond production basket De Beers, world’s leading diamond outfit increased its production output during the period under review by12% to rake in 9.1 million carats bringing total production for the year 2018 to 35.3 million carats. Anglo says the growth is attributable to a planned production increase at Orapa mine, although this was in the lower half of the production guidance range of 35-36 million carats.
A closer look at Debswana, De Beers‘s flagship rough diamond miner, indicates that production increased by 15% to 6.3 million carats. Production at Orapa grew by 20% to 3.6 million carats predominantly driven by planned favorable grade and higher plant utilization. At Jwaneng, the world’s richest diamond mine by value, production output went up by 9% following an increase in tonnes treated. Debswana is a leading rough diamond producer accounting for over 60 percent of De Beers total rough diamond output.
Namdeb Holdings, a 50-50 venture between De Beers and Namibian Government also registered growth in production, dispatching a 3 percent increase to close the quarter a 0.5 million carats. According to the JSE listed mining giant growth at Namdeb was driven by the Mafuta crawler vessel at Debmarine Namibia spending fewer days in port. “This was partly offset by the land operations following the transition of Elizabeth Bay to care and maintenance,” reads the report.
At the De Beers business in South Africa, rough diamond production increased by 7% to 1.2 million carats as a result of planned higher grade ore at Venetia while in Canada production increased by 5% to 1.0 million carats due to higher grades at Victor as it reaches the end of its life. Anglo says the 5 % growth registered in Canada was partially attributable to planned lower grades at Gahcho Kué.
In total volumes, rough diamond sales ended the period under review at 9.9 million carats mirroring 9.3 million carats on a consolidated basis from three sales cycles, compared to 8.2 million carats, 7.5 million carats on a consolidated basis for same number of sales cycles during the equivalent period in 2017.
Anglo American copper production increased by 23% to 183,500 tonnes, registering the highest tonnage since Q4 2013, with production increases at all operations and record copper in concentrate production at Collahuasi. Production from Los Bronces increased by 31% to 99,000 tonnes, driven by continued strong mine and plant performance and planned higher grades.
For Platinum mines, one of Anglo American’s traditional money spinning mineral interests, production increased by 3% to 602,300 ounces while palladium production increased by 3% to 386,600 ounces, due to improved operational performances across the majority of the portfolio. Own mined platinum production decreased by 12% to 307,500 ounces and palladium production decreased by 7% to 234,800 ounces due to the sale of Union mine on 1 February 2018, after which its production was purchased as concentrate.
For refined platinum, production output registered 7% growth up to 770,900 ounces, while palladium production was flat at 493,800 ounces. “Platinum sales volumes which excluding refined metal purchased from third parties increased by 8% to 776,900 ounces due to higher refined production, supplemented by a draw down in refined platinum stocks,” explains the report.
Anglo further reports that its IRON basket shrunk by 13% bringing production volumes to 10.2 million tonnes as planned to offset elevated stock levels at the mines resulting from Transnet rail constraints. “Plant yields remained slightly lower, in line with the strategy of producing higher quality products, to maximize the value of tonnes railed to port and to benefit from the strong demand for high-grade ore” explains Anglo. The Mining giant also says as a result of this decline, full year production of 43.1 million tonnes was at the lower end of the guidance range.
Under the coal segment, metallurgical coal production increased by 15% to 5.6 million tonnes, with productivity improvements at Moranbah offsetting the impact of a long wall move at Grasstree, which started in December 2018. “Grosvenor production also increased year-on-year, but was significantly lower than in Q3 2018 due to a longwall move, which was completed in late December 2018.”
Export thermal Coal production from Anglo’s South African outfits decreased marginally by 2% to 4.5 million tonnes, as operations continue to transit between mining areas. Domestic thermal coal production decreased by 54% to 3.3 million tonnes due to the completion of the sale of the Eskom-tied operations. Export thermal Coal Colombia production from Cerrejón decreased by 19% to 2.4 million tonnes as a result of high rainfall in Q4 2018.
Anglo America Chief Executive Officer Mark Cutifani said expenditure for the fourth quarter increased by 19% to $80 million compared to the same period of 2017. He further notes that exploration expenditure decreased by 6% to $29 million largely driven by adverse weather and delays with access. “Our continuing focus on efficiency and productivity improvements across the business resulted in another strong quarter, adding to our consistent track record of delivery,” he said.
In the coming months prices will go up and inflation will shoot sharply above the target of 3 percent to 6 percent towards the third quarter of 2021, the Bank of Botswana on the other hand will continue to withhold its knife on the Bank Rate. This is according to a forecast made by Kgori Capital in its recent Market Watch Segment.
Statistics from Statistics Botswana show that the recent 1.8 percent increase in the September inflation, from 1 percent in August, was a reflection of the upward adjustment in public transport fares (Transport (from -6.9 to -3.9 percent) in September 2020, which is estimated to have increased inflation by approximately 0.64 percentage points.
Local anti-trust body, Competition and Consumer Authority (CCA), this month received back to back acquisition proposals from South African clothing retailers to wipe out their former rivals, Edcon, from Botswana malls.
Last week BusinessPost was in possession of Merger Notice No 23 of 2020 whereby a South African clothing retailer owner, Retailability Proprietary Limited, through Oclin Proprietary Limited, proposed to acquire parts of the Edgars business conducted by Edcon in Botswana (through Edcon Botswana), as a going concern, consisting of certain assets and identified liabilities.
South African government’s Business Rescue Practitioners earlier this year announced that Retailability will buy Edgars, after the latter filed for a business rescue plan in April after it failed to pay suppliers. This move will see Retailability add Edgars to its portfolio consisting of brands such as; Legit, Beaver Canoe and Style.
Retailability landed on Botswana shores 18 years ago with its flamboyant urban fashion Style which had 17 stores. Style, having almost the same target market as Edgars as it offers men’s and ladies’ contemporary and formal fashion, gave the 91 year old legendary clothing retailer a run for its money, and has won the battle as its parent company has taken over Edgars.
Retailability brands are synonymous with Botswana shopping centres and there are currently five (5) Beaver Canoe stores, 10 Style stores and seven (7) Legit stores across this country. The Beaver Canoe stores sell clothing apparel for men and boys only. The Legit stores have a fashion store format which focuses on the retailing of clothing, footwear, accessories, colour cosmetics and cellular products.
Retailability operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and Eswatini. Many observers suggest that because of the deal with Retailability to swallow Edcon, most Edgars stores in Botswana will change their name and be branded Style. A sad tale for religious consumers of the Edgars trademark who got used to love their favourite brand for years.
According to CCA’s Merger Notice No 23 of 2020, Retailability is controlled by Clifford Raymond Lines (through a company which functions solely as a holding company of his interests in Retailability) and Metier Investment and Advisory Services Proprietary Limited (“Metier”). Metier is a private equity enterprise with investments in a number of industries spanning from healthcare, hospitality, FMCGs and telecommunications.
Retailability directors are mostly South Africans; Clifford Raymond Lines, Mark Richard Friday and Norman Victor Drieselmann. Only Nasreen Essack, who was appointed February this year, is a Motswana. He comes after Brian Thuto Tsima left on the same date. Retailability 100 percent owns Oclin Proprietary Limited, the company it is acquiring Edgars with, by a capacity of 3000 shares.
The target business, Edgars, offer textiles, cosmetics and cellular products. Edcon has a Motswana director, Charles Mzwandile Vikisi, a South African, Shane Van Niekerk and Zimbabwean Jethro Kamutsi.
“The Target Business comprises of two (2) Edgars franchise brands and private label stores across Botswana. These stores target middle to upper income customers and are home to a range of private label brands such as Free2BU, Charter Club and Stone Harbour, and a wide range of market label brands (such as Levi’s and Guess) for clothing, footwear and cosmetics.
In addition, the Target Business operates iconic Edgars Home and Edgars Beauty stores as store-in-store formats rounding out the department store offering in Botswana,” said CCA. Foshini also lines up to take Jet Botswana from Edcon.
The Foschini Group (TFG) released a statement confirming its latest intentions to acquire Edcon assets or Jet for a cash purchase consideration of R480 million. This was after the business rescue practitioners offered TFG to buy Jet by that amount.
CCA is currently mulling on a proposed merger by TFG to take over Jet operations in Botswana. Merger Notice No 21 of 2020 from TFG came a few days before the Retailability proposal. In this merger TFG, acting through Foschini Botswana, want to take over “parts” of the Jet business conducted by Edcon through Jet Supermarkets Botswana.
TFG will be willing to add Jet to its portfolio of 30 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cell phones, and technology products from value to upper market segments throughout more than 4085 outlets in 32 countries on five continents. TFG will also get Jet’s distribution centre located in Durban and certain stores in Botswana, Lesotho, Namibia and Eswatini. Also part of this fat deal is that the company is looking to also acquire JET Club and all existing JET stock of no less than R800 million.
Johannesburg listed TGF owns Foschini Retail Group which owns the local operations called Foschini Botswana, the acquiring enterprise according to CCA merger notice. “TFG is not controlled by any enterprise/s and for completeness, the three largest shareholders of TFG holding shares greater than 5% as at 27th March 2020 are: Government Employees Pension Fund (16.2%) Public Investment Corporation (13.2%); Old Mutual Limited (6.7%); and Investec Asset Management (6.3%). The remaining issued share capital in TFG is widely held,” said the merger notice.
Only Abdool Rahim Khan is a Motswana in the Foschini Botswana directorship, the rest; Ganeswari Shani Naidoo, Anthony Edward Thunström and Gustav Jansen (alternate director) are South Africans.
According to the CCA merger, the Jet Business is Edcon’s discount department store division, selling clothing, footwear, homeware and some cosmetics as well as cellular products and targets lower-to-middle income consumers throughout Botswana. The Jet Business does not directly or indirectly control any enterprises, says the notice. CCA seeks any stakeholder views for or against the proposed merger, which may be sent within 10 days from date of this publication to the following address.
Botswana Communications Regulatory Authority BOCRA signed a memorandum of Agreement (MoA) with the Ministries of Transport and Communications (MTC), Basic Education (MoBE) as well as Local Government and Rural Development (MLGRD).
The MoA seeks to continue the collaboration that dates back to 2016 when the three parties first agreed to work together in a project aimed at computerizing and providing broadband Internet to primary schools in remote and underserved areas of Botswana.
The project benefitted 68 primary schools and 9 secondary schools through the construction of Local Area Network (LAN) in each primary school, provision of 5 Mbps dedicated broadband Internet to each Primary School and provision of Wi-Fi enabled tablets, laptops and related peripherals such as printers and copiers.
Further, the project will see the augmentation of computers in 9 Junior Secondary Schools with 30 laptops per identified school and employment of Information Technology (IT) officers at each primary school.
When speaking at the signing ceremony in Gaborone, Chief Executive of BOCRA and Chairperson of Universal Access and Service Fund (UASF) Board of Trustees Martin Mokgware said the project’s ultimate goal is to facilitate pupils in schools and host villages to be able to play a meaningful role in the digital economy.
Mokgware indicated that this necessitates upgrading of existing Telecommunications infrastructure to high capacity broadband that will support delivery of education, accessibility to the quality Internet and usage of ICTs.
The Fund began its inaugural programme by sponsoring the provision of WiFi hotspots in public areas around the country as its first project. Following the successful implementation of public WiFi hotspots, the Fund identified Kgalagadi, Ghanzi and Mabutsane areas for mobile network upgrades, schools computerization and internet provision.
Conscious that the project would not be possible without buy-in and support from MoBE, MTC and MLGRD, the Fund facilitated the signing of the first MoU between the three parties in 2016 for implementation of the project.
BOCRA Chief Executive said the signing of this agreement is aimed at benefitting the Kweneng District, adding that they have already assessed the area and have determined that they will be covering 62 underserved villages and 119 schools, 91 of which are primary schools.
“This is a project for which the partner Ministries need to re-commit for its success. Lessons from the previous schools’ computerization and internet connectivity project require that we increase our involvement and resources dedicated to the project for it to be successful. It is my belief as the project coordinator, that we will not do things the way we did them during the first project, for if we do, then we will not have learnt anything,” he said at the signing ceremony.
The purpose of learning is so that there can be continuous improvement to minimize the length of time and amount of resources utilized, he said expressing confidence that their partners will step up to the plate and ensure they play their part in the implementation of the project and that it will progress smoothly having already tread along a similar path.
UASF’s role lies mainly in funding and project management. According to Mokgware, once the project is completed, the work to integrate ICTs into the classroom begins in earnest. Therefore, he said, the project will not succeed without full cooperation and oversight of partners.
“MoBE will put in place the necessary content and ensure that the curriculum is available to all. MLGRD will provide, among others, the enabling environment by ensuring readiness of the school’s infrastructure and necessary security.”