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Barrick Gold prepares for Zambian copper mine sale

Barrick has said it plans to shed $1.5 billion of less productive mines.

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Barrick Gold prepares for Zambian copper mine sale
Zambia's Lumwana copper mine. Photo credit: AFP

The world’s second largest bullion miner, Barrick Gold Corp, is preparing its Zambian copper mine, Lumwana for sale in the second half of 2019, looking to target Chinese buyers.

Fresh from two major deals in recent months, Barrick has said it plans to shed $1.5 billion of less productive mines, which have little expansion potential.

Among the possible sales, is Lumwana, a relatively low-grade copper mine- whose margins could be materially affected by Zambia’s new mining code and import duty. Analysts value the mine at up to $500 million.

Barrick is holding discussions with investment banks about appointing advisers to the sale, the sources said.

Two of the sources say that a bank with links to Chinese companies was likely to get the advisor role for Lumwana.

The group is looking to enter talks with Chinese state-owned companies including Aluminum Corp of China, known as Chinalco, and China Minmetals Corporation, which have been seeking growth abroad and a foothold in Africa, lured by its vast resources.

The sale process, however, may not be easy, sources say, as the potential acquirer will have to be comfortable with the risk associated with tax changes in Zambia.

Pure copper

Africa’s second-biggest copper producer is determined to enforce a new 5% copper import duty and also plans to replace value-added tax with a non-refundable sales tax as part of a plan to keep a greater share of mineral resource profits for the country and tackle its debt.

The new taxes also include a royalty on copper production that increases as commodity prices rise.

Zambia has overcome opposition of some of the world’s biggest mining companies, betting that a global need for its resources, particularly copper, essential for manufacturing electric cars, and cobalt, used in lithium-ion batteries, will keep the tax receipts flowing.

Diversified miners, Glencore, Vedanta Resources and First Quantum also operate in the country.

Lumwana’s sale does not signal a complete exit from copper assets for Barrick. The company is interested in acquiring assets that include both copper and gold, and pure copper projects if it has a competitive advantage over traditional copper miners, Chief Executive Officer, Mark Bristow told Reuters last week.

Over the past six months, Barrick closed a $6.1 billion acquisition of African miner Randgold Resources and formed a joint venture with rival Newmont Goldcorp to combine operations in U.S. Nevada to create the world’s biggest gold complex.

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Angola awards fuel tender to Total, Trafigura

Angola was hit hard by the 2014 oil price crash, which pushed its economy into recession

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Angola awards fuel tender to Total, Trafigura

Sonangol, Angola’s state-run oil firm says it had awarded contracts for its refined products for the next 12 months to Total and Trafigura. In the arrangement, Total will supply Angola with petrol or gasoline while Trafigura will supply diesel and marine diesel.

This came due to the longest run of fuel shortages that hit Angola in years, which led to the sacking of Sonangol chair, Carlos Saturnino earlier this month.

According to Sonagol, the shortage was blamed on difficulties accessing hard currency as well as unpaid debts owed to the energy company by industrial clients.

Heavily reliant on oil sales for government income, Angola was hit hard by the 2014 oil price crash, which pushed its economy into recession and created foreign currency shortages that crippled business.

In the statement on Tuesday, Sonangol reported that it had issued the tender in February with nine companies bidding for the supply contracts.

The tender result marks a return to Angola for Trafigura, which for many years, enjoyed an effective monopoly on lucrative fuel supply deals with OPEC member Angola.

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Nigeria’s central bank holds benchmark interest rate

This reduction is the first since November 2015.

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Nigeria's central bank holds benchmark interest rate
A photo of the Nigerian Central Bank in Abuja, Nigeria. (Photo by Pius Utomi EKPEI / AFP)

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has maintained the interest rate at 13.5 per cent. From the last Monetary Policy Committee(MPC) meeting in March, a 0.5 per cent cut was made in the interest rate.

The decision comes a day after Nigeria’s bureau of statistics reported that economic growth had slowed in the first quarter of 2019, dropping to 2.01% from 2.38% in the previous quarter as the country’s dominant oil sector shrank.

This reduction is the first since November 2015. The rate had been held at 14% since July 2016 to support the naira and curb inflation.

Earlier this month, Emefiele, became the first Nigerian Central Bank governor since the return to democracy in 1999 to be given a second term. The CBN had predicted that growth this year would come in at 2.38 per cent.

Nigeria emerged from its first recession in 25 years in 2017. Higher oil prices and recent debt sales have helped it accrue billions of dollars in foreign reserves, but growth remains fragile with inflation edging up in April to 11.37% from 11.25% a month earlier.

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MTN pays off bulk of $1.5 billion Nigeria fine

MTN, which began operation in Nigeria in 2001, is the country’s largest operator with 53 million subscribers.

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MTN pays off bulk of $1.5 billion Nigeria fine

South African telecoms giant MTN has paid more than three-quarters of a record $1.5 billion dollar fine levelled by Nigeria for failing to disconnect unregistered subscribers, the government said late Tuesday.

Africa’s biggest wireless operator was initially fined $3.9 billion in October 2015, after failing to disconnect 5.1 million subscribers -amid concerns the lines were being used by Boko Haram insurgents.

After series of negotiations, the fine was reduced to $1.5 billion, or 330 billion naira.

“MTN has so far paid 275 billion naira to the federal government,” the Nigerian Communications Commission (NCC) said in a statement.

With more than 80 per cent paid, the agency said MTN has until the end of May to pay the rest.

MTN, which began operation in Nigeria in 2001, is the country’s largest operator with 53 million subscribers.

It generates almost half of its revenue in the oil-rich west African nation, and last week floated on the Nigerian Stock Exchange (NSE).

The $6 billion flotations on the Nigerian bourse was part of the agreement to resolve its disputes with the Nigerian authorities over some infractions. 

Last December, MTN agreed to pay a separate $53 million fine after being accused of illegally repatriating $8.13 billion to South Africa.

The decision to impose fines shocked MTN and its foreign investors, with four commercial banks involved in the transfer also sanctioned.

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