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Anglo American records $5.5 bn loss

The mining giant, Anglo American has reported a pre-tax loss of $5.5bn for 2015 as sinking commodity prices hit the mining giant.

The record loss is more than double the loss reported in 2014 as the company took charges of $3.8bn due to falls in commodity prices.

The company reported that its net debt at the end of 2015 stood at $12.9bn. This would fall to $10bn by the end of 2016 and to $6bn over the medium term.

Chief executive Mark Cutifani said the global economy had presented the mining industry with significant challenges.

The mining giant is targeting an extra $3bn to $4bn of asset sales this year as it plots a course to recover from the commodities rout by disposing of some of its largest and oldest business units.

The disposals will include Kumba Iron Ore, Africa's biggest miner of the steel-making ingredient. Anglo said its focus on just 16 assets would bring staff numbers down to about 50,000, from 128,000 at the end of last year. About 68,000 jobs will transfer with businesses while about 10,000 will be cut.

“The company has initiated a review to consider options to exit from KIO at the appropriate time, including a potential spin-out,” Anglo said.

Cutifani said that Anglo would sell its coal mining operations as well "at the right time, for the right value. Anglo would focus only on its copper, diamonds and platinum businesses.

Anglo is also suspending its dividend to conserve cash.

The group’s decision to step away from bulk commodities such as coal and iron ore reflects its more marginal cost positions in iron ore.

Other than that, Anglo also said that it acknowledged changing demand in China, with “evolution away from bulk commodity intensive infrastructure development to increasing demand for base and precious metals for homes, vehicles, household appliances and electronics, as well as for luxury goods”.

De Beers to cut more jobs in South Africa

Meanwhile De beers has joined the retrenchment move  as it plans to cut 189 positions in South Africa to reduce costs as demand for gems dips, the company said on Tuesday.

Weakness in the rough diamond market weighed on the world’s largest diamond company in the financial year ended December 31 2015. A 36 percent decline in rough diamond sales pushed total revenue down 34 percent to $4.7bn.

Despite an 8% decline in its rough price index for the year, the Anglo American subsidiary managed a 5% increase in average realised diamond prices to $207/carat (ct).

De Beers cut diamond production by 12 percent to 28.7m ct from an initial target of 32m ct.

“We demonstrated, at that time, that production to demand is working. We saw the demand being a little bit shaky, we started to cut, we saw the perfect storm building up and we cut further and at the end it was the right response to the market,” Phillipe Mellier, CEO of De Beers said.

Despite tough trading conditions, the company said its Forevermark brand enjoyed double-digit sales growth. Forevermark, which recently relaunched De Beer’s famous “A Diamond is Forever” marketing campaign, increased its footprint by 14% and is now available in more than 1 700 outlets across 35 markets.

De Beers, which expects to produce 26-28m carats in 2016, said it will adjust production in accordance with trading conditions. It also plans to deliver $200m in cash savings through a reduction in production costs, overheads, and capex.

Describing the market as fragile, Mellier said the company has worked to “close 2015 on the right note” and ensure that stocks were close to normal levels at the end of the year. “We are now in a position to start 2016 and look at 2016 as a new cycle with a rebound,” he said.

Initial indications point to a slightly improved diamond market. De Beers and Alrosa, which together make up around two-thirds of the diamond market, sold close to $1bn worth of diamonds in their first sales of the year. However, he expects diamond prices to remain flat from where they ended in 2015.

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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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