News Update as @ 1530 hours, Monday 4 August 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

By Rumbidzayi Zinyuke

Government is seeking funds to build a laboratory that will allow for the testing of all minerals produced in Zimbabwe and ensure that mining companies do not prejudice the country of the minerals coming from the ground, an official said today.

Giving oral evidence to the parliamen-tary committee on mines and energy,

Mines and Mining Development minister Walter Chidhakwa said the country could be losing revenue from under declared minerals that are exported in platinum concentrate.

“Application for a permit for a platinum company is accompanied by a statement that specifies that we want said to export so many tonnes of PGM concentrate and that concentrate is comprised of so much percent of other minerals. Then it states

the values expected from the exports,” he said. “We don’t have a lab to get samples of their concentrate and test to make sure that the figures they give us are correct. This is why you see the push for a platinum refinery. Everywhere l go, l am looking for funds

Zimplats recently announced to build a lab to test our minerals. “At the moment it’s an act of faith and trust but we must do things that ensure that we are able to test. But more importantly, we must make sure that we don’t allow concen-trates to go out of the country, we must move to the smelter, to the PGM base metal refinery and the precious metal refinery,” he said. Zimbabwe, which has the world’s second largest platinum reserves after South Africa, has given miners two years to localise platinum group metal refinery, which is currently done in the southern neighbouring coun-try

that it will spend $690 million to refurbish its existing base metals refinery and build a precious metals refinery.

The platinum refining process goes through two significant stages; in the base metal refinery – which separates base metals such as nickel and copper – and then the precious metal refinery which processes the various platinum group metals and gold to high levels of purity.

Currently, two of the country’ major plat-inum producers, Unki and Mimosa have been exporting platinum ore in its raw form to South Africa for refinery while Zimplats exports the product in matte form.

Minister Chidhakwa said a lab would make it easy to see the amount of min-erals being exported by the companies until the refining is done locally. •

Gvt seek funds for PGMs testing lab

Minister Chidhakwa

BH24

3 NEWS

By Lynn Murahwa

The National Railways of Zimbabwe says it is owed a total of $6,4 million by other parastatals, a situation which has compounded the company’s oper-ational challenges.

Addressing the parliamentary portfolio committee on Public Accounts, NRZ director of technical services Lewis Mukwada said the bulk of the compa-ny’s debtors are parastatals that have been struggling to return to profitabil-ity.

"When we look at the averages, they were mainly caused by some para-statals some of whom were failing to operate, like Ziscosteel, Cold Storage Company and also Zimbabwe Power Company and Grain Marketing Board.

"As it stands now the total amount owed to us by debtors is $6,4 million and most of it is current," he said.

He said their outdated billing system was a major cause for concern as it caused problems with debt collection.

"At the time of dollarisation right up to 2012 we had a lot of challenges with our debtors, the customers that we were supplying services to could not pay us on time plus the large some of these were parastatals. With the com-puterisation of the system invoices are now online and we are able to bill them as soon as the wagons are loaded."

Mukwada said the company has resorted to exchanging funding for dis-counted services as a large amount of capital is required to keep operations running. "We have approached some

of our customers who consider railway services critical to their business and

have entered agreements where they put forward some money to finance the repair of our wagons and we then give them a service labour agreement and agree on a tariff reduction to amor-tise the amount that they would have advanced to us.

"Other initiatives that we have also taken now are focused on are trying to raise the long term capital because both the infrastructure and the equip-ment require quite a lot of money to this," he said. •

NRZ owed $6 million in inter-parastatal debt

Senior Reporter

Government has released funds to the Grain Marketing Board so that farmers who delivered their grain will be paid starting this week.

Addressing Zanu-PF supporters in Magunje on Saturday, Local Gov-ernment, Public Works and National Housing Minister Dr Ignatius Chombo said he was aware that GMB now had money and was informed by Finance Minister Patrick Chinamasa. He did not divulge the amount of money GMB

received from Government. “I am aware that GMB will by next week (this week) start paying farmers who deliv-ered their maize. Just be patient as you will soon get your money,” he said. Minister Chombo said he was aware that there were some unruly elements within society that were buying maize from farmers at low prices.

“There are some unruly elements who are moving around offering farm-ers money to buy maize, don’t sell to them. Some are offering amounts

ranging between US$180 to US$200. So be wary of these unruly elements,” he said. Price per tonne is pegged at $390 including for small grains such as sorghum, millet and rapoko.

By end of May, Government had provided $4,6 million for grain pro-curement and payments will be done within two months of delivery or earlier through CBZ and Agribank. Last week, maize deliveries to the Grain Marketing Board had risen 231 percent since the beginning of the 2014 marketing sea-

son in April.

Farmers have so far delivered just over 40 000 tonnes of grain to the GMB up from about 12 000 during the same period last year, permanent secretary in the Ministry of Agriculture, Mecha-nisation and Irrigation Development Ringson Chitsiko recently said in a statement. Maize output is expected to reach one million tonnes this year, a 30 percent increase from last year’s production, according to earlier crop assessment by Government. •

4 NEWS

GMB to start paying farmers

NRZ in bid to curb copper theftBy Lynn Murahwa

National Railways of Zimbabwe hasss teamed up with the Zimbabwe Rev-enue Authority to tighten security at border posts and help to curb the smuggling of stolen copper out of the country, parliamentarians heard today.

The NRZ's operations have been crip-pled by the large amount of thefts of copper wires along the tracks.

Addressing the parliamentary portfolio Committee on Public Accounts, Trans-

port and Infrastructure Development permanent secretary Munesu Munod-awafa said the theft of copper from the NRZ has been a significant factor in the company losing revenue.

"The problems at NRZ go further, when you look at the signaling and telecoms systems that were originally copper based but it has been totally vandal-ised," he said. He said more needs to be done to bring the offenders to jus-tice as they are taking opportunity in the security deficit along the tracks.

"Vandals take the copper for re-selling in South Africa so now we are work-ing with local authorities and Zimra to block the leakages of that copper through our borders," he said.

Munodowafa said there is a need to discontinue the use of copper in the system and get optic fibre to aid recap-italisation plans. He said the company has been in discussions with local tel-ecoms companies to find ways of facil-itating the installation of fibre cables. "We have been engaging in partner-

ships with private sector for exam-ple on Harare, Mutare road we have allowed service providers to lay optic fibre in exchange they have given us full capacity to use but what we then require is the equipment to interface with that.

"On certain corridors where we have got masts we have shared those masts with those services providers and through that mechanism we have reduced the total investment as a country in those miles," he said. •

BH24

AdM-DI156506-

BH24

The equities market maintained its bull run opening the week in positive territory in mixed trading.

The mainstream industrial index was up 0.21 points to close at 189.52 points. BAT moved up 24 cents to trade at 1325 cents, Hippo added 8 cents to close at 70 cents and Fidelity Life traded 0.58 cents firmer to close

9.10 cents. Willdale doubled to 0.20 cents and beverages maker Delta was marginally up by 0.09 cents to settle at 126.33 cents.

The gains were partially offset by losses in Econet which shed a cent to trade at 71 cents and First mutual retreated by 0.50 cents to close at 6.50 cents. Padnega lost 0.20 cents

to 8 cents whilst Star Africa and ZPI went down 0.10 cents each to 2.50 cents and a cent respectively.

The mining index was steady at 94.45 points. Bindura, Falgold, Hwange and RioZim were unchanged at previous trading levels. ― BH24 Reporter •

7 ZSE REVIEW

Equities maintain bull run

BH24

Zimbabwe's economic malaise, now more than a decade old, has pushed women into male dominated spheres. Not only is this good for them, since they have a way to take care of their families, it is one sure way to get the economy running again.

Women generally are enterprising and they usually get the work done. This is why they have successfully entered the mining sector which was predom-inantly male.

We have organisations such as the Zimbabwe Women Rural Develop-ment Trust (ZWRDT), which has more than 500 members and operates mainly in the Midlands and Matabe-leland provinces, helping women get a foothold in the mining sector. More than 100 members of the organisation are miners.

And we also have the 50,000-strong NGO Women in Mining, which helps women start mining ventures.

Not only have these organisations helped women get into mining, they make them a very important part of

economic recovery. Mines and Min-ing Development Minister Walter Chidhakwa seems to concur with this view.

He told a parliamentary portfolio com-mittee that women now dominate the mining sector, especially small scale gold mining.

“Most mining that take place out there is by women,” he said.

What this means is that women have stepped up to the call to work for Zim-

babwe’s recovery. Not to take any-thing away from men who are work-ing as hard as these women, we feel these women deserve to be praised for their efforts, especially those work-ing in such harsh conditions.

There are tangible gains for women who have joined the sector as small-scale miners, especially in gold and chrome, as they can afford everyday household needs, pay school and medical fees, and even afford some modest luxuries.

However, accessing capital for min-ing ventures remains one of the big-gest obstacles. Mining equipment, such as compressors for milling ore and pumps to drain water from mine shafts, are generally unaffordable, and women miners have to resort to rent-ing equipment at high costs, eroding their profit margins. The lack of equip-ment makes mining an even more arduous occupation.

We have always been saying women should stand up and be counted, not sit around and mop about their situa-tions. They are definitely standing up now and its time for Government to come in and help them.

The fact that they are already in large groupings means it’s easier to help them. Women in mining have stepped up to the call to help revive the econ-omy, let the powers that be recognise that and make their work easier.

With the right equipment and funds, they have the potential to contribute more to Zimbabwe’s economic recov-ery. •

9 BH24 COMMENT

Women in mining have stepped up

BH24

Diversified miner Vedanta Resources said it was open to a scrutiny of its Zambian copper business, which has faced protests recently over allegedly not paying enough taxes.

The company's shares were up 2.5% at 1077p at 1457 GMT on the London Stock Exchange.

Vedanta chairperson Anil Agarwal said on Friday his comments on Zambia in

a video circulating on the Internet had been taken out of context.

"I can assure you we have paid our fair share of taxes in Zambia (and around the world) and we welcome any scru-tiny of that," the one-time scrap dealer, who controls the FTSE-250 company, said at Vedanta's annual general meet-ing.

Zambia's mines minister Christopher

Yaluma said in May the government would investigate and recover back taxes if it found that Vedanta made more money from its Konkola Copper Mines (KCM) than it had reported.

Hundred of Zambians protested at KCM's Lusaka headquarters after the video showed Agarwal boasting of vast profits from the mine, in which Vedanta bought a controlling stake a decade ago.

The business — which accounts for about 10% of Vedanta's revenue — was part of the company's push beyond its origins in India, but has repeatedly disappointed.

The company reported a 43% fall in core earnings at its Zambian copper business for the first quarter ended June 30, earlier this week. ― Reuters •

11 REGIONAL NEWS

Vedanta says open to scrutiny of Zambian copper business

Kenyan telecoms given month to pay USF

Telecommunication service providers in Kenya have until the end of this month

to pay their contributions to the Uni-versal Service Fund (USF) or have pen-

alties imposed on them and have the Communications Authority of Kenya (CAK) recover the money by force.

The USF was introduced last year and is designed to grow access to ICTs in rural areas that are deemed uneco-nomically viable by operators.

Mobile network operators and internet service providers are required by law to remit 0.5 per cent of their annual turn-over to the USF.

The Standard reports of the over 500 ICT registered companies, only a hand-

ful have remitted their dues, with the rest late.

Only Telkom Kenya (Orange) has remitted the money among the mobile operators, with Safaricom, Airtel and yuMobile not having made their contri-butions by mid-July.

“All the operators have until end of August to make their contributions to the USF after which we will start to impose penalties,” said Fred Matiangi, cabinet secretary at the Ministry of ICT. ― The Standard (Kenya) •

BH24

13 DIARY OF EVENTS

The black arrow indicate level of load shedding across the country.

POWER GENERATION STATSGen Station

4 August 2014

Energy

(Megawatts)

Hwange 645 MW

Kariba 720 MW

Harare 30 MW

Munyati 28 MW

Bulawayo 40 MW

Imports 50 MW

Total 1513 MW

Seed Co Limited 19th Annual General Meet-ing Venue: Seed Co Administration Block at Sta-pleford Date: Wednesday 20 August Time: 12:00 hours

National Tyre Services Limited 52nd Annual General Meeting Venue : Boardroom, Stand 4608, Corner Cripps/Seke Roads, Granite-side, Harare Date: 20 August 2014 Time: 14:30 hours

THE BH24 DIARY

BH24

15 ZSE

ZSEMOVERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

WILLDALE 100.00 0.20 ZIMRE -9.09 1.00

HIPPO VALLEY 12.90 70.00 FIRST MUTUAL -7.14 6.50

FIDELITY LIFE 6.81 9.10 STARAFRICACORPORATION -3.85 2.50

BAT 1.84 1,325.00 PADENGA -2.44 8.00

DELTA 0.07 126.33 TRUWORTHS -1.75 2.80

ECONET -1.39 71.00

INNSCOR -0.01 76.00

IndicesINDEx PREVIOUS TODAY MOVE CHANGE

INDUSTRIAL 184.95 183.76 -1.19 POINTS -0.64%

MINING 61.13 66.53 +5.40 POINTS +8.83%

Stocks Exchange

BH24

17 AFRICA STOCkS

Botswana 8,664.65 -11.96 -0.14% 12July

Cote dIvoire 246.37 +2.18 +0.89% 07Mar

Egypt 7,949.60 -75.68 -0.94% 06Mar

Ghana 2,301.05 +0.70 +0.03% 01Aug

Kenya 4,943.28 +37.19 +0.76% 01Aug

Malawi 12,662.47 +0.00 +0.00% 07Mar

Mauritius 2,074.51 -3.51 -0.17% 07Mar

Morocco 9,544.10 +21.01 +0.22% 07Mar

Nigeria 41,934.40 -163.09 -0.39% 01Aug

Rwanda 131.27 +0.00 +0.00% 24Oct

Tanzania 2,018.97 +25.40 +1.27% 07Mar

Tunisia 4,624.39 -39.32 -0.84% 07Mar

Uganda 1,503.90 +0.81 +0.05% 10Sep

Zambia 4,242.74 +14.95 +0.35% 10April

Zimbabwe 189.31 +1.23 +0.65% 01Aug

African stock round up Commodity Prices

Name Price

Crude Oil 1,300.91 -0.21%

Spot Gold USD/oz 1,292.63 -0.26%

Spot Silver USD/oz 19.38 -0.46%

Spot Platinum USD/oz 1,421.25 -0.33%

Spot Palladium USD/oz 798.50 -0.64%

LME Copper USD/t 6,770 -0.18%

LME Aluminium USD/t 1,780 -1.17%

LME Nickel USD/t 18,230 -1.73%

LME Lead USD/t 2,095 -1.41%

Quote of the day — "Develop success from failures. Dis-couragement anD failure are two of the sureststepping stones to suc-cess." - Dale carnegie

Globalshareholder.com

Investors breathed a sigh of relief on Monday after Portugal prevented the collapse of one of its biggest banks, putting some life back into European stocks following last week's slide and pushing bond yields lower across the board.

Lisbon on Sunday announced a near 5 billion-euro rescue of the country's largest listed bank Banco Espirito Santo (BES.LS), preventing its collapse and potential contagion across the conti-nent's banking sector.

This dovetailed with easing fears of higher U.S. interest rates following Friday's U.S. employment report, and eclipsed growing geopolitical concerns surrounding the Middle East and effect of Western trade sanctions on Russia.

"The market's initial reaction is that it's pretty reassuring to see Portugal moving quickly to rescue BES. Over-all it eases systemic fears that had resurfaced last week," Saxo Bank sales trader Andrea Tueni said. "But it's not enough to spark a real rebound in the overall market. This is mostly a techni-cal bounce from last week's slide and

the trend remains negative for now," he said. In early trade on Monday the FTSEurofirst 300 .FTEU3 index of leading shares was up 0.2 percent at 1,335 points, led by a 0.8 percent rise in pan-European banking stocks .Sx7P.

Euro zone financials were up 1.3 per-cent .Sx7E and Portuguese banks were up 6 percent .TRxFLDPTPBANK. Shares in BES were still suspended.

Germany's DAx rose 0.2 percent to

9,226 points .GDAxI, France's CAC 40 was up 0.5 percent at 4,223 points .FCHI and Britain's FTSE 100 index was up 0.2 percent at 6,692 .FTSE.

European shares led the losses last week as concern mounted over ten-sion between Russia and the West, as well as the BES crisis which saw its share price plunge 50 percent on Friday alone. It was a more mixed picture in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan

.MIAPJ0000PUS rose 0.4 percent, largely as Chinese shares continued to rally on signs that the economy was regaining momentum, but Japan's Nik-kei average .N225 hit a one-week low.

The three main indices on Wall Street pointed to a higher open on Monday of around a third of one percent SPc1 DJc1 NDc1. The S&P 500 .SPx fell 2.7 percent last week, its biggest weekly decline in more than two years.― Reu-ters •

18 INTERNATIONAL NEWS

Investors cheer Portuguese bank rescue

Base metals stocks, like gold stocks, nowadays offer some enormous investment opportunities.

They fell so low, along with most base metals prices that, particularly with the improved economic recovery in the U.S. and in some other nations, and with China showing some positive growth indications again, there is rela-tively little downside remaining.

Indeed base metals stocks have been some of the best performers so far this year as they have risen off their nadirs.

And in the junior sector in particular, selective stock picking – i.e. those with good projects, the finances to survive any continuing price malaise and suc-cessful management teams – should, like similarly placed gold juniors, ulti-mately pay off in spades. It may yet take time, but picking the absolute bot-tom in stock prices is more a matter of luck than judgement.

The best most investors can hope for is picking stocks near their bottoms and when there looks to be little downside risk as at present, this has to provide

some great opportunities.

But it is not only the juniors which will benefit from an upturn in metal prices. The base metal mining majors, and the big diversified miners, will also ben-efit strongly from a global economic pick-up, with far less investment risk involved – and also offer the additional benefit of regular dividend payments which does not apply to most juniors.

The leverage involved in any pick up for the big companies is obviously far less than from a potential high flying

junior, but the latter remains more of a gamble – although again the better juniors could also provide more imme-diate, but perhaps smaller, gains if they are swallowed up by a bigger company.

We have already seen some interesting M&A activity and there will undoubtedly be more as companies with financial strength look to improve their medium to long term growth potential through acquisition.

The other factor in favour of the big-ger mining companies – mirrored also in the precious metals sector – is that, often under new leadership, they have been looking much more closely at rationalising operations with a par-ticular emphasis on controlling capital, operating and administrative costs. The good times did lead to the ball being dropped in some aspects of cost control and this returned to bite them with the falls in metals prices.

As an indicator of how far the base metals miner stock prices fell the par-ticularly hard-hit Canadian S&P/TSx Capped Diversified Metals and Mining index fell to a four-year low last year,

19 ANALYSIS

Like gold, base metal stocks offer huge investment opportunities

20 ANALYSIS

having dropped by almost 60% from its early 2011 peak leading to the mining companies ditching CEOs and some top executives, postponing expansions and new project developments - and in some cases dropping them altogether and generally attempting to cut costs across the board.

In the latter they were helped by con-tracted organisations – engineers and project management companies hav-ing to cut their charges as the move from glut to scarcity had a similar impact on them too. Manufactures also needed to make concessions as waiting lists for major equipment items disappeared.

But there has been something of a pick-up since, despite continuing low prices for copper and aluminium – the two biggest elements in the base met-als sector, both of which plunged to low points at the beginning of the current year, but have picked up a little since. Looming shortages have seen zinc prices, in particular, rise and nickel and lead have also seen some good coun-ter-trend strength too as prices have been stronger although still well below historic highs.

While the perceived U.S. ‘recovery’ , however dubious the government statistics, will have had an impact, it is still China and its growth pattern which remains the key. Even a weak growth year sees a 7% plus rise and there is a growing realisation that the Asian dragon economy seems unlikely to collapse in tatters as it has to maintain growth to assuage the expectations of its massive population for growing wealth and advancement.

What we are seeing now is a typical cyclical pattern of base metals price rises and falls, and which looks to be on the up again. The pattern develops thus. Demand rises, prices accelerate, the mine developers bring on massive new projects and expansions to meet perceived demand growth. Demand falters, leading to a glut of supplies and price collapses.

Major mining companies are pressured to cut back on expansions and new projects and close unprofitable opera-tions. Then demand picks up again but the project cutbacks and mine closures mean there isn’t sufficient supply to meet it. Prices rise and the whole cycle begins again. The China fuelled growth

of the past decade or so led to the coin-ing of the term supercycle and there is huge argument amongst economists and market followers as to whether this ‘supercycle’ is over or not.

But one suspects that in reality the supercycle in some form or another is here to stay failing some enormous global environmental disaster or con-flict decimating world population.

Global population growth is acceler-ating as are the expectations of peo-ple for better living standards. China is the prime example of this, but it is also happening elsewhere. Rising liv-ing standards demand more ‘stuff’ and this can only be provided by producing more resources with which to make it.

Thus the supercycle remains alive and well, although perhaps not quite as strong as it was pre the 2007/8 global financial crisis, and the recent down-turns almost certainly just represent a blip in continuing global growth.

So, on the base metals investment sector which is purely supply-demand driven, certainly the medium to longer term outlook has to remain highly pos-

itive. Canada’s Globe & Mail quotes Terry Shaunessy, President and portfo-lio manager at Shaunessy Investment Counsel thus: “This is an industry that was absolutely savaged.

It’s not unlike what happened with American banks. The downside risk was almost zero, because expecta-tions, there weren’t any. All you’re really waiting for is the cycle to get going.”

So, long term investors should see the recent base metals malaise as provid-ing a distinct investment opportunity. If one does one’s due diligence in stock picking carefully there could be some huge gains ahead.

Avoid the dogs and almost any solid base metals miner, developer and better explorer should generate some substantial rewards in the pipeline in the medium to long term.

Pick carefully, buy, and hold should perhaps be the mantra here and wait for the next down cycle to re-appear before divesting. Easier said than done but such a policy could serve you well. ― Mineweb •

And what happened to that debate of preserving the retail sector for indige-nous Zimbabweans?

It is in this sector where "foreigners" are committing the worst of atrocities. So Mobster just recently discovered that this popular wholesaler in Harare is

also involved in the business of selling parcel counter space.

Yes, that’s correct. The wholesaler charges you a whole dollar to leave your parcel at their parcel counter. That’s for the few minutes (or less) that you intend to spend in that lifeless edi-fice. When Easi-Park introduced their $1-an-hour-vehicle parking bays, Mob-ster thought that was a bit much (see how these foreigners come up with these devious plans to swindle us?)

Now, a $1 charge for leaving a parcel at a parcel counter? That’s just evil. Mob-ster is sure it’s a violation of some yet undefined human right. Mobster isn’t a shopaholic, so is not aware of any significant precedence to compare this with. But paying to leave your stuff at the parcel counter of shop where you

intend to do your shopping is simply WRONG. It’s an unwritten convention, but corporations have a duty not to abuse their customers.

Mobster ranks this shop’s parcel busi-ness among the most unethical of business practices alongside Monsanto, which has consistently been voted the most evil company in the world year after year for their unethical practices and borderline illegal business tactics.

But what’s just as disgusting was the number of parcels that Mobster saw stacked in those little partitions behind the grim Asian whose only purpose there was to ensure that no parcel finds its way without paying, or perhaps that the dollars trickle into the right pockets.Are Zimbabweans really agreeable to this? Do we really lack options? Are we

so desperate? In any case, "foreigners" like this wholesaler must go!

I know, I know, that simple avowal brings about all these questions of whether businesses have an obligation to be moral or not, as well as what con-stitutes being Zimbabwean. That deci-sion to charge customers $1 for parcel counter services is a deliberate result of a corporate internal decision-making process. And who makes those deci-sions... and who are the owners?

That’s more than adequate reason to attribute moral agency to them. This wholesalers has been operating in the country for decades, and the propri-etors probably having stayed in the country for much longer. But whatever the definition of being Zimbabwean is, Zimbabweans don’t treat each other like this.

(Mobster is a Zimbabwean philos-opher who has an opinion on just about anything. She however has a particular liking for business and economics stuff. However her opinions are not necessarily rep-resentative of this platform. You can send your feedback to her on mobsterzim1980@gmail.com) •

21 MOBSTER’S MONDAY MUSINGS

This wholesaler must go!