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Anglo American to rescue troubled Sirius Minerals plc

Anglo American plc, a British multinational mining company based in Johannesburg, South Africa and London, United Kingdom, listed on Botswana Stock exchange (BSE), has this week announced its intentions to purchase the troubled Sirius Mineral plc which is faced with liquidation.

According to a communique issued this week, the world's largest producer of diamonds, platinum and copper (Anglo American plc) is said to have proposed taking over Sirius which is valued at £404.9 million. The multinational mining company is said to have proposed a share of 5.5 pence per share for each share to all the shareholdings. However tens of thousands of retail investors, who ploughed their life savings by buying Sirius Minerals shares would suffer huge loss if the 5.5 per share is approved by the board.

Sirius Minerals plc which is a fertilizer development company based in the United Kingdom and also listed on the London Stock Exchange announced in September 2019,that they were undertaking a strategic review in order to assess the development plan for its North Yorkshire polyhalite project (the “Project”) and an  appropriate financing structure to provide relevant funding. This after the UK’s biggest mining company’s shares crushed by more than 80 percent last year after having traded as high as 43p in 2016.

Sirius employs 1,200 staff and its Project would create a further 2,500 high-earning jobs in the future. But the mine was plunged into doubt last year after Sirius shelved a $500m (£400m) bond issue, blaming factors such as a lack of government support and Brexit uncertainty. Mark Cutifani the Chief Executive Officer (CEO) of Anglo American said they intend to bring financial, technical and product marketing resources and capabilities to the development of the Project, which would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area.

“The Project will support the ongoing transition towards supplying those essential metals and minerals that will meet the world’s evolving needs –in terms of the undoubted need for cleaner energy and transport, and providing infrastructure and food for the world’s fast-growing and urbanizing population,” he shared.

Russell Scrimshaw who is the Chairman of Sirius Minerals said following the setbacks in the bond market, they took the difficult decision to slow the pace of development of the Project and initiate a strategic review to reassess how best to unlock the long term value to the shareholders, UK, and customers all around the world. Scrimshaw further said in the communique that the scope of the strategic review was to consider and incorporate optimizations to the Project development plan and also to exploring alternative funding solutions.

“We were successful in reducing the initial funding needs of our Project to map out a way to develop the Project in a way that better aligned risk to capital providers but, despite an extensive global search for a strategic investor, we have to date not received a firm proposal for a partial Project stake. The only viable proposal was received from Anglo American in early January, who were only interested in pursuing a 100% control transaction,” he commented.

“Alternative financing solutions have also been pursued in parallel to the strategic partner process, which resulted initially in a non-binding proposal being received in December 2019 and subsequently a revised proposal being received on 9th January 2020.”
If acquisition of Sirius Minerals by Anglo American is not approved by shareholders and does not complete, there is a high chance that the business could be placed under administration or liquidation within weeks thereafter and this outcome would most likely result in shareholders losing all of their investment, as well as put the future of the entire project in jeopardy.

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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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