Anglo American maintains production rate
Business
Global mining conglomerate Anglo American has reported a slight increase in total production for the third quarter of 2018 ended 30th September.
According to a performance overview released by the diversified mining giant this week total production registered a slight hike of 1 percent on copper equivalent basis for the four months ended September 30, 2018. The multi-Exchanges listed global outfit operates major mining undertakings in the world’s richest deposits unearthing almost all mineral varieties from copper, platinum, iron, metallurgical coal as well as diamonds, the latter is through the world’s flagship diamond producer De Beers which Anglo owns on majority shareholding.
De Beers, 15 percent owned by Botswana Government, breaks the world most valuable diamond fields in Botswana and Namibia amongst others. Anglo American reports that De Beers’s productions volumes decreased by 5 percent to 8.7 million carats attributable to expected lower grades at the world richest diamond mine by value, Jwaneng as well as lower volumes at Venetia.
De Beers Botswana operations under the banner of the country’s flagship mining company, Debswana registered production decline of 6 percent recording 5.7 million carats during the third quarter of 2018. Anglo America says the lower production volumes were anticipated because of to the planned processing of lower grade material at Jwaneng.On a more satisfactory note Orapa regime which is a basket of Orapa plants, Letlhakane and Damtshaa mines remained in line at flat figures with insignificant difference to 2017 Q3 production of 2.6 million carats.
Next door to Botswana, Anglo American also have lucrative mining interests in Namibia through another De Beers outfit, Namdeb Holdings a 50-50 venture between De beers and Government of Namibia recorded flat performance at 0.5 million carats. De Beers’ operations in South Africa recorded a production decline of 14 percent to 1.3 million carats due to a planned shutdown at Venetia to upgrade the processing plant ahead of the transition from open cut to underground operations, while Canada production increased by 5 percent to 1.2 million carats, driven by higher grades at Victor, which is approaching the end of its life.
In the overall Anglo American observes that rough diamond sales volumes amounted to 5.0 million carats, 4.6 million carats on a consolidated basis from two sales cycles in Q3 2018, compared to 6.9 million carats-6.5 million carats on a consolidated basis from two sales cycles in Q3 2017.
“Rough sales volumes were down as a result of sight holders being given the opportunity during the seventh Sight of 2018 to re-phase the allocation of some smaller, lower value rough diamonds. Rough sales revenues were broadly in line with Q3 2017,” reads the report.
On Anglo American flagship base metal mineral, copper, production volumes hit an impressive hike by 17% to 171,800 tonnes, with production increases at all operations.
Anglo notes that 23 % production increase 95,800 tonnes at Los Bronces was by enlarge driven by continued strong mine and plant performance, supported by significantly lower than usual winter snowfall and planned higher grades. For the company’s traditional revenue spinner Platinum mining operations, production increased by 4 percent to 649,000 ounces while palladium production increased by 1 percent to 410,800 ounces due to improved operational performances across the majority of the portfolio, despite the placing of unprofitable production from Bokoni on care and maintenance in Q3 2017.
Still under platinum basket own mined platinum production decreased by 7 percent to 332,900 ounces and palladium production decreased by 5 percent to 250,200 ounces due to the sale of Union mine to Siyanda Resources on 1 February 2018, after which its production was purchased as concentrate. The United Kingdom incorporated mining giant explains that excluding Union, own mined platinum production increased by 5 percent and palladium production increased by 2 percent.
Refined platinum production decreased by 19 percent to 556,200 ounces and refined palladium production decreased by 29 percent to 321,500 ounces due to a rebuild of the Mortimer smelter in Q2 2018 and its progressive ramp up in Q3 2018 as well as the Polokwane smelter furnace repair that required a full shutdown for 35 days.
Platinum sales volumes with exclusion of refined metal purchased from third parties decreased by 20 percent to 530,100 ounces and palladium sales volumes decreased by 30 percent to 324,300 ounces due to lower refined production. Still during the period under review Anglo American’s Kumba Iron ore production volumes decreased by 9 percent to 10.5 million tonnes, as planned, following rail constraints in half 1 2018, and a small decrease in plant yields as Kumba produced higher quality products to maximize the value of tonnes railed to port.
Export sales decreased by 10 percent to 9.7 million tonnes due to the scheduled refurbishment of a ship loader at the Saldanha Port that reduced loading capacity during the quarter. Total finished product stocks increased from 6.2 million tonnes at 30 June 2018 to 6.6 million tonnes at 30 September 2018, representing ~$175 million of working capital.
For its metallurgical Coal, Anglo recorded 3 percent depreciation in exports to 5.4 million tonnes, with the Grosvenor ramp up being offset by a longwall move at Moranbah, anticipated challenging geological conditions at Grasstree and lower production at Dawson. For thermal Coal production in South Africa, exports increased by 16 percent to 5.1 million tonnes, following operational improvements in the quarter and the impact of a 100-hour safety stoppage in Q3 2017, partly offset by conveyor issues at Zibulo.
While domestic thermal coal production decreased by 68 percent to 2.7 million tonnes due to the completion of the sale of the Eskom-tied operations to Seriti on 1 March 2018. Nickel output increased by 3 percent to 11,500 tonnes driven by enhanced stability arising from operational improvements implemented at Barro Alto during 2018, while Manganese ore production increased by 6 percent to 887,600 tonnes.Manganese alloy production decreased by 7 percent to 34,800 tonnes due to a planned maintenance shutdown of the furnace during the quarter.
Anglo American Chief Executive Officer (CEO) Mark Cutifani, remarked that his company’s focus on driving efficiency and productivity across the business resulted in another strong quarter. “With volumes 1% higher than the solid operational performance seen in Q3 2017.
Production per employee has increased by 5 percent in 2018, compared to 2017, as we maintain relentless discipline on controllable costs.”
Cutifani observes that Anglo’s strong operational performance at its Copper assets which delivered a 17 percent increase in production mirrored quarter 3’s best performer, more than offsetting planned lower volumes at De Beers and the impact of rail infrastructure constraints at Kumba in the first half of the year.
Business
Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Business
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Business
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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