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10% rise in China overseas investment

China's overseas direct investment is projected to rise at least 10 percent annually for the next five years, a trend that will soon make the country a net capital exporter, a senior commerce ministry official said on Wednesday.

"It's only a matter of time," said Zhang Xiangchen, an assistant minister at the Ministry of Commerce (MOFCOM), referring to when China's outbound investment will eclipse inbound investment.
"If it doesn't happen this year, it will happen in the near future," he added.

Speaking on Wednesday at a news conference to publicize new regulations meant to simplify overseas investments for Chinese companies, Zhang said the value of overseas assets held by Chinese firms still lagged behind foreign competitors, including in the energy and natural resource sector.

The Chinese government's push to stoke overseas investment is part of an effort to slow the rise of its foreign currency reserves at home, while helping domestic companies buy assets, resources and technology overseas.

Although Chinese outbound direct investment is expected to reach $120-billion this year, Zhang said, Chinese firms' holdings equalled only a tenth of the assets held by American firms and only half those held by Japanese companies.

Under the revised rules, which were first published in September, most domestic firms will no longer need to seek MOFCOM approval prior to making an overseas investment, but must register the investment with regional regulators.

MOFCOM approvals only are required for non-financial outbound investments in "sensitive countries and regions" and "sensitive sectors." The regulator also eliminated approval requirements for the formation of offshore special purpose investment vehicles.

The new rules also greatly simplify approval and filing procedures and reduce the time allowed to review overseas investments.

Of the total 6 608 overseas investments approved by MOFCOM in 2013, only 100 deals – mostly in "sensitive" sectors related to national security – would require approval under the new regulations, Zhang said, adding that companies have so far reacted "very positively" to the changes.

The MOFCOM regulations follow similar rules issued by the National Development and Reform Commission in April which stipulate that regulatory approval only is required for investments in excess of $1-billion or if a project involves a sensitive country, region or sector.

China is moving to diversify its $4-trillion in foreign exchange reserves, while reporting its slowest economic growth since the global financial crisis. On Tuesday, China said its economy grew 7.3% in the third quarter, the slowest pace since the first quarter of 2009.

Chinese firms, including Shanghai-based conglomerate Fosun International Ltd and Beijing-based Anbang Insurance Group, made $74.96-billion in offshore acquisitions in the first nine months of the year, a 21.6% rise from a year earlier. Foreign direct investment amounted to $87.36-billion in the same period.

Earlier this month, Anbang Insurance entered into an agreement with Hilton Worldwide Holdings Inc to purchase its flagship Waldorf Astoria New York hotel for $1.95-billion.

Zhang noted that Chinese energy and mining companies hold fewer overseas assets compared to companies from developed countries. The energy and mining sectors accounted for 16.7% of Chinese companies' overseas holdings, a proportion Zhang considered low.

"Energy and natural resources is something we need," he said. "Importing the energy and resources we lack to manufacture for the world's consumer is very normal."

In 2013, China's non-financial direct investment overseas amounted to $90.17-billion, a rise of 16.8% from a year earlier, according to MOFCOM statistics. Total non-financial foreign direct investment at year's end amounted to $525.7-billion.

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Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.

“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.

A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020

Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.

A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.

Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.

In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.

The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.

In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.

Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.

The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”

In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.

Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.

The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.

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