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Masisi-China new romance boosts Shumba investment dreams

Shumba Energy chairman Alan Cleg suggested that President Dr Mokgweetsi Masisi regime’s appreciation of the controversial One China policy and the recent opening of further trade and investment opportunities with the second biggest economy will help in improving coal markets.

Masisi’s predecessor Lt Gen Dr seretse Khama Ian Khama was seen as a threat to One China policy after refusing to block Tibetan spiritual leader Dalai Lama’s visit to Botswana.  In One China policy, China sees Tibet as an autonomous region of itself and the Dalai Lama is a stern advocate of Tibet independence (why he is seen as an enemy to China and should be rejected by country with ties to the Asian superpower).

 Khama then accused China of trying to colonise Botswana by threatening to sabotage the country’s relations with other countries. Many expected the worst, China completely stopping trade with Botswana. But Masisi rekindled the China-Botswana romance which has been in existence for almost six decades. “We have renewed our relationship with China and we stand firm to our recognition of One China Policy,” said Masisi.

In Shumba Energy’s annual report which was released this week, company chairman Cleg said lamented that regional mineral economy politics is still largely led by emergence of resource nationalism in Africa and this is what brought continued negative arbitrage on prospective risk investment in the coal sector.

“However, regime changes in South Africa and Zimbabwe offer something of a hopeful light for future re-opening of that sentiment within the next year or two. While even in Botswana the government change has brought recognition of the one China policy and opening of further investment opportunity for the Chinese Dragon that was closed before,” said Cleg.

Shumba to increase Auditor’s remuneration

In Shumba’s next Annual Meeting to be held on 28 December 2018, the company is expected to approve the remuneration of its external auditor, Grant Thornton, for the year ended 30 June 2019. Shumba is expected to give Grant Thornton around P27 500 next year after decreasing the fee by P865. In 2017 Shumba gave the auditor P26, 450 while this year it became P25, 585. Almost all the board members are expected to be re – elected in the next AGM.

According to the latest annual report released this year, Grant Thornton has indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the Annual Meeting. Shumba is also going to approve the remuneration of the directors. According to the annual report, all remuneration of the members have been duly reviewed or recommended by the Remuneration and Risk Committee and to be approved by the Board before any disbursement has been done. Director’s fees have decreased from P 114,730 in 2017 to P106 216 this year.  

Shumba’s operating expenses have however increased to P1, 053,408 from P1, 003,706 in 2017. According to the annual report, total expenditures on projects and asset development during the year were around USD 500,000. On the other hand, net assets at the end of the year were USD 10.4m, an increase year on year of 18% reflecting the acquisition and development expenditures. Cash and Cash Equivalents of the Group as at the reporting date were USD 1.35m, a decrease year on year of 45% resulting from the acquisitions made during year.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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