News Update as @ 1530 hours, Monday 16 June 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

By Tawanda Musarurwa

AIM-listed resources and develop-ment company African Consolidated Resources (ACR) is set to acquire Fal-gold's mothballed Dalny gold mine for $8 million.

ACR is currently undertaking due dil-igence on the mine with a view to assuming all the debts and liabilities the non-operational gold producer had accrued.

In a cautionary published today, Fal-gold said most of the full payment will go towards "various payments".

"This transaction is subject to a full dil-igence and various actions which ACR is in the process of undertaking. The terms of disposal include: full settle-ment of all known trade creditors of Dalny Mine; settlement of labour costs

of workers; full settlement of any cap-ital gains tax or other tax liabilities due to the Zimbabwe Revenue Authority; the balance of funds after these pay-ments will then be remitted to Falgold.

"ACR have offered a full payment price of $8 000 000 before various pay-

ments, as detailed above, need to be made. The estimated net cash from the transaction is approximately $2,5 million," said Falgold.

The disposal of Dalny Mine will con-stitute a restructuring that will help Falgold meet some of its other capital requirements.

In March this year, the struggling gold producer said it was looking to extend the 25 percent wage cut it effected last year, indicating that it was still in a loss-making position.

The company, which is owned by Toronto Stock Exchange-listed junior miner New Dawn, posted a $12,5 mil-lion loss for the year ended September 30 2013 citing poor gold prices, the temporary closure of Dalny Mine and persistent labour issues.

Falgold slashed salaries by 25 percent in October last year initially for three months, citing operational challenges, but further extended the cuts in Janu-ary and then said the extension would remain indefinitely.

ACR, which recently appointed Zimba-bwean Roy Pitchford as it acting CEO, looks to extend its Zimbabwean foot-print with the acquisition of Dalny Mine.

The revival ofDalny will come as relief for its 900 worker who were sent on unpaid leave during the third quarter of last year.

ACR is in the process of advancing its flagship asset, the Pickstone-Peerless gold project, after it currently boasted a Joint Ore Reserves Committee-com-pliant resource of 3,56-million ounces of gold. •

ACR to pay $8m for Falgold's Dalny gold mine

BH24

3 NEWS

By Rumbidzai Zinyuke

Zimbabwe’s deflation has continued to thaw but remaining in the negative after the annual inflation rate gained 0,07 percentage points to -0,19 per-cent.

Figures from the Zimbabwe National Statistical Agency the annual rate of inflation for May improved slightly from -0,26 percent in April.

“This means that prices, as measured by the all items CPI decreased by an average of 0,19 percentage points between May 2013 and May 2014,” ZimStats said. The inflation rate meas-ures a broad rise or fall in prices that consumers pay for a standard basket of goods.

Zimbabwe entered deflation in Feb-ruary as liquidity conditions tightened while aggregate demand kept declining due to lower disposable incomes.

During deflation, when the annual rate of inflation falls below zero, compa-nies cannot increase prices of goods; instead, they cut prices even when costs are rising. Some economic ana-lysts however believe the deflationary period is temporary as it is a gradual

climb down from dollar-induced infla-tion the economy went through after adopting multi-currencies.

More pessimistic observers contend that the current deflationary state is real and could affect the country for a long time as deflation is typically noto-rious to come out of.

They believe that the current thawing of deflation is simply a reaction to the tobacco marketing season, which has helped to liquefy the economy.

On a month on month basis, inflation rate in May was -0,13 percent after

shedding off 0,71 percentage points on the April rate of 0,58 percent.

The year-on year food and non-alco-holic beverages inflation stood at -3,75 percent whilst the non-food inflation rate was 1,62 percent.

The month-on-month food and non-al-coholic beverages inflation stood at -0,30 percent, gaining 0,16 percentage points on the April rate of -0,46 per-cent. the month on month non-food inflation stood at minus 0,05 percent shedding -1,14 percentage points on the April rate of 1,09 percent. •

Zim deflation continues to thaw

By Lynn Murahwa

Implementation of the Corporate Gov-ernance Framework will now move with speed after Cabinet's approval for the establishment of a Corporate Gov-ernance and Delivery Agency in the Office of the President and Cabinet.

The new agency will work along with the Zimbabwe Revenue Authority and state enterprises to ensure compliance with the approved frameworks.

Speaking at the Zimra Stakeholders Workshop for Parastatals this morn-ing, Chief Secretary to the President and Cabinet Dr Misheck Sibanda said this was Government's initiative to inculcate values of good corporate gov-ernance and to ensure that all public institutions comply with the country's tax laws.

"Cabinet has approved the establish-ment of a Corporate Governance and Delivery Agency in the Office of the President and Cabinet, for purposes of ensuring compliance with the approved Corporate Governance Framework," he said.

Dr Sibanda said particular irregular-ities have been revealed within the

country's parastatals and enterprises through the Zimra investigations.

"The investigations undertaken by Zimra on a number of state enter-prises, parastatals and some local authorities have unearthed a number

of irregularities in the areas of income tax, PAYE, withholding tax, among other tax heads" he said.

He added that these revelations have brought about the need for a platform where the heads of the parastatals can be reminded of their duties.

"Such revelations brought to the fore need for an interactive forum where all chief executives can be enlightened on their tax obligations" said Sibanda.

He said Government has begun work-ing to address the issues affecting the implementation of ZimAsset. He said the Cabinet approved Corporate Governance and Remuneration Policy Framework to tackle these challenges in State Enterprises include a review of tax laws for heads of parastatals.

"Government has started to address some of the challenges affecting imple-mentation of the ZimAsset. With spe-cific reference to the public sector I wish to advise that Cabinet has already approved the Corporate Governance and Remuneration Policy Framework for designated posts in State enter-prises, parastatals and local authorities.

"Highlights of the framework include all total pay packages for designated posts in state enterprises, parastatals and heads of local authorities be taxable, as well as the total pay packages should comprise of basic salary of 60 percent and benefits of 40 percent. The Chief Executive Officers and Heads of Local Authorities be appointed for a four year term, which is renewable once, on the basis of satisfactory performance." •

NEWS4

Govt sets up Corporate Governance and Delivery Agency

5 NEWS

By Lynn Murahwa

The Rural Electrification Tariff is set to go up after the Minister of Energy and Power Development called upon the new Rural Electrification Agency board to review the current tariff.

While announcing Zesa boards appointments yesterday, Energy and Power Development Minister Dzikamai highlighted his concerns over the 'low' rural electrification tariff to the new Rural Electrification Agency board.

"The 6 percent levy for rural electrifi-cation is not enough, we hope the new board that is taking over is aware of our concerns," said the Minister. The new REA board is constituted by chairman

Willard Chiwewe and board members including Christinah Moyo, Fungai Samuel Mbetsa, Christopher Shumba, Josphat Jaji, Felix Chikwowo, Midard Khumalo and Cecelia Chitiyo. The chief executive officer is Joshua Mashamba.

It is however expected that the new board will face a public backlash in increasing the rural electricity tariff due to the inefficiency and duplicity of the previous board after it had become involved in loaning activities.

Observers are generally against a tar-iff hike. "It cannot be the new board's first task to raise the rural tariff increase before it even justifies that the current monies being paid in the public are

being utilised the right way," said one observer. Earlier in February this year, Minister Mavhaire dissolved the then REA board and management after they were embroiled in a $4 million scandal whereby they extended to themselves and other connected private citizens loans amounting to close to $4 million.

Minister Mavhaire yesterday called upon the new REA board to re-align to its original mandate. "REA must focus on its mandate...it must drop some of its failed integrated or comprehen-sive development thrusts as it is not a development agency but a Rural Elec-trification Agency," he said.

Meanwhile, the Energy Minister has said the solar energy initiative, which is being championed by the Zimbabwe Power Company and REA, is one of the reasons for an upward increase in the overal electricity tariff rate.

"Whilst we have very high solar radi-ation rates, solar power remains very expensive. The same people that are demanding solar power are the same that will denounce us when electricity tariffs are adjusted on account of using any significant portion of solar power," he said. •

UN's Principles for Responsible Investment aims for ZSE partnership

The producer price for sugar has dropped by nine percent to $574 per tonne from $627.67 last year mainly due to decline in value of the commodity on the international market, an official said on Monday.

Commercial Sugarcane Producers Association of Zimbabwe vice chairper-son Tawanda Mafurutu told New Ziana that the producer price of raw sugar was largely determined on the global market and was subject to periodical review.

“Sugarcane growers are currently being paid $574 per tonne for now but the price can go up or down as the season

progresses depending on what is hap-pening worldwide,” he said. “Last year the price declined towards the end of the selling season. We started at $627 per tonne and ended at $572.

We hope that this year the price will firm for us to get more profit,” he added.

The price of raw sugar in Zimbabwe for the 2013 marketing season dropped to US$627, 67 per tonne from US$700 the previous year owing to massive produc-tion of the crop in some parts of the world, hence pushing prices down.

Sugarcane growers in the Lowveld are

this year anticipating an upsurge in pro-duction spurred by heavy rains received in the 2013-14 cropping season. Growth in sugar cane yield is also driven by the increase in area planted from 44 818 hectares in the 2012/13 season to 50 000 hectares in the 2013/14 sea-son.

According to the African Development Bank Monthly Economic Review (Janu-ary) sugarcane production in the South-ern African country for the 2013/14 cropping season was projected to grow nine percent from the 2011/12 sea-son yield to 4 550 000 metric tonnes. Harvesting of sugarcane in Zimbabwe

started on April 1 this year and is likely to continue until December. Sugarcane is grown on a commercial scale in the south-eastern parts of the country which include Chisumbanje in Man-icaland province and Chiredzi in Mas-vingo province where more land is set to be availed soon following completion of the Tokwe-Mukosi Dam.

Prior to the land reform program in early 2 000, sugarcane production was a monopoly of Tongaat Hullet, a South African company that still controls the milling and marketing of the crop in the country. ― New Ziana •

BH24 Reporter

Zimbabwe’s tobacco sales are inching towards the 200 million kilogramme mark although low prices have seen earnings not going significantly higher than last season.

The targeted crop this season was 180 million kgs which was surpassed last week. Latest figures from the Tobacco Industry and Marketing Board show that more than

191 million kgs worth $610 million have been sold, a 32 percent increase from the same period last year. But the value sold to date is only 14 percent higher than last year's $537,5 million due to prevailing lower prices for auction sale.

Contract floors have so far received 144 million kg worth $479 million while auc-tion floors have purchased 48,1 million kg worth $132 million. The average price for

contract tobacco was $3,33 per kg and $2,74 for auction tobacco.

While auction floors have been the life-blood of many farmers, the low prices have pushed most of them to turn to contract farming for them to get more from their crop. Auction floors are also reportedly considering diversifying into contract farm-ing. •

6 AGRICULTURE

Tobacco sales nears 200 million kgs

Producer price of sugar falls nine percent

BH24

The equities market has begun the week on a positive note, rising 0.17 percent in today's trades to notch a fifth consecutive gain.

The Industrial Index pushed up 0.31 points to settle at 181.05 points follow-ing gains in selected heavyweights.

Conglomerate Innscor advanced 1.49 cents to 77 cents, while giant insurer Old Mutual gained 0.42 cents to trade at 250.92 cents.

Cottco was up 0.09 cents to 0.90 cents, while construction firm Masimba rose 0.01 cents to close at 1.51 cents.

On the downside, bankers CBZ was the only counter to trade in the red after easing 0.50 cents to trade at 14.50 cents. The Mining Index also continued

on a positive trend, gaining 3.40 points (or 7.53 percent) to close at 48.57 points on the back of the positive per-formance of BINDURA, which added 0.31 cents to trade at 3.61 cents.

The other mining counters, Falgold, Hwange and Riozim all maintained previous trading levels. — BH24 Reporter •

8 ZSE REVIEW

Equities in fifth consecutive gain

Government has once again made it clear that it will not change its stance on the production of genetically mod-ified commodities.

This is a good thing. Citizens need to be aware of Government policy at all times. Despite reports that Govern-ment could consider allowing GMO, Agriculture, Mechanisation and Irri-gation Development Minister Joseph Made last week made it clear that GMOs have no place in our country.

“We will not allow our country to be contaminated by these commodities... we can be a producer for the regional market and indeed for the international market,” he said.

But what Government has not made clear is how it will make sure that pro-duction of non-GMO agriculture pro-duce is increased.

Zimbabwe is currently battling under a food deficit which has made us rely on food imports. At one point we were even importing fruits, tomatoes, eggs and chicken livers! One of the things Government has done is to put in

place more stringent measures on the importation of such basic agricultural produce.

With these stricter measures in place, there is a ray of hope for local farmers.

Farmers now have the market freed up

for them to produce on a large scale. What then can stop farmers in produc-ing enough to supply the local market and export the excess when they have been protected by Government?

The simple answer is “capacity”. Farm-ers need the necessary funds required to make their farming activities self sustaining.

Most of our farmers lack the capacity to produce three months’ supply of com-modities let alone a year’s supply.

So this triggers imports because we cannot meet demand and the products become more expensive due to high costs of production in the country.

Indeed, Zimbabwe can produce for local, regional and international mar-kets; we were once the bread-basket of Africa after all. But the past decade and a half has not been easy on the farmers, especially the communal farmers who once used to produce enough to feed the urban population.

Although the poultry and horticulture industries have picked up, they are still struggling to meet demand so they need help.

Some suggestions on what Govern-ment can do: First, there should as much clarity on the method of financ-ing farmers to meet demand consist-ently.

European countries can afford to ban GMOs because they know that they have the capacity to produce organic

commodities and import the deficit from other countries. Zimbabwe, does not have that capacity.

Second, Government should make sure that there are stricter measures on imports, not on paper only but in terms of enforcement of these reg-ulations. Despite the ban on imports, some products keep finding their way into the country and they are still cheaper than our own products.

Last, farmers should increase yields to be able to meet demand. If they have the money to do it then they should do it properly and not take shortcuts.

Should they want to overtake imports, they should be consistent as the Minis-ter Made rightly said.

Once the yield is increase, they can maintain supply. When demand increases and costs eventually go down.

When this eventually happens, the Government can afford to offer export incentives on the excess supply and we go back to being the region's bread-basket. •

9 BH24 COMMENT

Govt clear on GMO stance, but crop production needs to increase

Kenya plans to sell two dollar bonds today in its first offering on interna-tional capital markets, a day after a terrorist attack killing 48 people height-ened security concerns in East Africa's biggest economy.

Kenya is issuing a five-year Eurobond at a yield in the low 6 percent area and a 10-year bond in the low 7 percent range, according to a person familiar with plans who asked not to be identi-fied as the information is private. That compares with the 7.1 percent yield on similarly-rated 2014 bonds from Zam-bia sold in April.

Kenya will use the proceeds for infra-structure projects and repayment of a $600 million loan that matures this August.

The government forecasts economic growth will accelerate to 6.1 percent in the year through June 2015 from an estimated 5.3 percent in fiscal 2014, helped by exports of tea and flowers.

Bombings in Nairobi and the port city of Mombasa killed more than 100 people since a Sept. 21 attack on the West-gate Mall in the capital.

“At this price it looks attractive” relative to Zambia which “arguably has weaker credit fundamentals than Kenya,” Max Wolman, who helps oversee $13.5 billion in emerging-market debt as a money manager at Aberdeen Asset Management Plc in London, said by phone today.

“Yields are particularly low, demand for emerging markets is high, so they can get the deal done at attractive levels for the issuer.”

Zambia raised $1 billion two months ago in Africa’s first sovereign dol-lar-debt offering of 2014. It was priced

to yield 8.6 percent, more than 340 basis points above the government’s debut issue in September 2012, after a widening fiscal deficit prompted a rat-ings downgrade last year. Kenya shares Zambia’s B1 rating at Moody’s Inves-tors Service, three levels below invest-ment grade. ― Bloomberg

10 REGIONAL NEWS

Kenya taps debt market with debut Eurobond amid security concern

enjoy the CAIO ride!

11 DIARY OF EVENTS

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

POWER GENERATION STATSGen Station

16 June 2014

Energy

(Megawatts)

Hwange 423 MW

Kariba 750 MW

Harare 45 MW

Munyati 26 MW

Bulawayo 21 MW

Imports 200 MW

Total 1465 MW

26 June - Pioneer 44th Annual General Meeting of Sharehold-ers, Venue: Pioneer Corporation Africa Limited Boardroom, Corner Hood/Hermes Roads, Southerton, Harare, Time: 10:00 hrs

26 June - Masimba Holdings Limited Thirty-Ninth Annual General Meeting of Mem-bers for the period ended 31

December 2013, Place: 44 Til-bury Road, Willowvale, Harare, Zimbabwe, Time: 12:00

30 June - TA Holdings 79th Annual General Meeting of the ordinary members Venue: Miti Room, Sango Conference Centre, Cresta Lodge, Harare, Time: 1400 hours

30 June - ZIMRE 16th Annual General Meeting of members, Venue: NICOZDIAMOND Audito-rium, 7th Floor Insurance Centre, 30 Samora Machel Avenue, Time: 1230 hours

THE BH24 DIARY

BH24

13 ZSE

ZSEMOvERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

COTTCO 11.11% 0.90 CBZ -3.33% 14.50

BNC 9.39% 3.61

INNSCOR 1.97% 77.00

MASIMBA 0.67% 1.51

OLD MUTUAL 0.17% 250.92

Indices

INDEx PREvIOUS TODAY MOvE CHANGE

INDUSTRIAL 180.74 181.05 +0.31 POINTS +0.17%

MINING 45.17 48.57 +3.40 POINTS +7.53%

Stocks Exchange

14 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 2,343.98 +9.46 +0.41% 06June

Kenya 4,881.56 +12.30 +0.25% 06June

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 41,529.11 -40.98 -0.10% 06June

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 178.58 +1.54 +0.87% 06June

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 —"The secreT of success is consisTency of purpose." - Benjamin Dis-raeli Globalshareholder.com

BH24

Russian natural gas exporter Gazprom reduced supplies to Ukraine on Monday after Kiev failed to meet a deadline to pay off its gas debts in a dispute that could disrupt supplies to the rest of Europe.

Announcing that Ukraine will now only get gas it pays for in advance, Moscow put the onus on its neighbour to guar-antee the European Union receives supplies that transit through Ukraine.

Kiev and Moscow failed to agree over-night on the price of future gas deliver-ies, with both sides refusing to aban-don well-established positions: Russia offering a discount and Ukraine reject-ing it as a tool for political manipulation.

Talks were already difficult but were also clouded by the worst political crisis between Russia and Ukraine since the Soviet Union collapsed, including the shooting down of a Ukrainian military plane by pro-Russian separatists in the east of the country on Saturday and accusations by the West that Russia is arming the rebels. Russian officials said Alexei Miller, Gazprom's chief execu-tive, and Energy Minister Alexander

Novak would meet President Vladimir Putin later on Monday. "Today, from 10:00 a.m. Moscow time, Gazprom, according to the existing contract, moved Naftogaz to prepayment for gas supplies ... Starting today, the Ukrain-ian company will only get the Russian gas it has paid for," it said.

Gazprom had demanded Kiev pay off at least $1.95 billion of a gas debt that it puts at more than $4 billion by the Monday morning deadline, or face sup-ply cuts and the prospect of paying up front.

Gazprom said on Monday it had filed a lawsuit at the Stockholm arbitration court to try to recover the debt, while Ukraine's Naftogaz said it was filing a suit at the same court to recover $6 bil-lion in what it said were overpayments.

A source at Gazprom said supplies to Ukraine had been reduced as soon as the deadline passed. EU data sug-gested that volumes were broadly sta-ble as of 0630 GMT, but it could take hours for data on Russian gas flows via Ukraine to reflect any reduction in supply in Slovakia or elsewhere. Any

reduction of supply could hit EU con-sumers, which get about a third of their gas needs from Russia, around half of it through pipelines that cross Ukraine. Earlier price disputes led to the 'gas wars' in 2006 and 2009 and Russian accusations that Ukraine stole gas des-tined for the rest of Europe. - Reuters

...as European Union transfers €250 mln financial aid to Ukraine

The European Commission has trans-ferred the first €250 million tranche to help Ukraine with reforms, part of an €11 billion 2-year support package. "Today's disbursement is one of many steps we are currently making to help

the government of Ukraine in address-ing the short-term needs as well as preparing for the implementation of the Association Agreement. We stand by Ukraine and we are proving it with concrete actions," Commissioner for Enlargement and European Neighbor-hood Policy Stefan Fule was cited in the statement as saying.

The second €105 million tranche will follow in the next months and will be linked with the progress in reforms in the areas of anti-corruption, pub-lic finance management, civil service, constitutional reform, electoral leg-islation and justice, TASS reports. — voice-of-Russia •

16 INTERNATIONAL NEWS

Russia's Gazprom reduces gas to Ukraine after deadline passes

By Natasha Odendaal

As the future of the bulk of South Africa’s platinum group metals (PGM) output hangs in the balance on the back of a protracted strike weighing on the nation’s three largest produc-ers, palladium and platinum deficits were likely to reach two-million ounces and 1.2-million ounces respectively

this year, Standard Bank commodities head Walter de Wet told Mining Weekly Online.

This was an uptick on Standard Bank’s April forecast of a 815 000 oz platinum supply deficit for 2014 as a whole – a volume that could have been down to 300 000 oz had the strikes not occurred – and a palladium deficit of

more than 1.5-million ounces. Palla-dium would close 2015 with a 1.3-mil-lion-ounce deficit and 2016 with a 1.8-million-ounce deficit, de Wet said.

Further, the palladium price was likely to breach the $900/oz mark sooner than 2016, as previously forecast by the bank earlier this year, owing to ris-ing palladium exchange-traded funds

and supply constraints as the crippling strike continued with only a tentative end in sight.

In April, Mining Weekly reported that Standard Bank had revised its 2014 palladium price forecast upwards to $785/oz, while palladium prices were expected to rise to $875/oz, $938/oz and $975/oz in 2015, 2016 and 2017 respectively. The market looked bullish for palladium, particularly as demand from the US and China rose, he noted.

Palladium prices on Thursday reached a high of $863/oz, while platinum prices, which had remained stagnant since the start of the strike, rallied to $1 482/oz, before stabilising at around $1 475/oz.

As with palladium, platinum had sig-nificant above-ground inventories, but there was also muted demand for plat-inum jewellery, which accounted for 30% of overall demand.

The demand for gold jewellery had out-stripped demand for platinum jewellery owing to the lower gold price.

“The recent price rises in both platinum

17 ANALYSIS

Platinum, palladium deficits to increase

and palladium have been driven by an outlook for improving supply-de-mand dynamics both in the short and medium term.

“On the demand side, it appears that European auto sales have troughed and overall global industrial growth appears to remain robust,” Barclays precious metals research analyst Andrew Byrne said in an emailed response to Mining Weekly Online.

Cadiz economist Peter Major indicated that it was possible for the palladium price to catch up to that of the declining platinum price, but should the price rise further, it was likely that autocatalyst manufacturers would seek out the use of rhodium or platinum as a substitute.

De Wet noted that the platinum price was unlikely to rally past Standard Bank’s 2014 forecast of $1 470/oz, as supply was supported by recycled metal and above-ground stock.

However, should the platinum belt strike continue until year end, it could potentially rise to $1 600/oz, which was in line with Major’s prediction that the price would likely rise about $50/oz a month. Major said that, in addition to the 25% supply from recycling, the

platinum market was already in over-supply, which had kept the prices low.

“The platinum price was [already] on its way down [when the strike started],” he explained, saying that the strike was holding the price steady and, should it end in the short term, the price would continue its decline.

By March, the then two-month-old Association of Mineworkers and Con-struction Union- (AMCU-) led strike had removed about 670 000 oz of PGMs from the market, comprising 400 000 oz of platinum, 225 000 oz of palladium

and 54 000 oz of rhodium.

By Friday, the strike had cut about 30% of the year’s output.

“The strikes have removed over one-million ounces of platinum supply in 2014 (about 12.5% of global sup-ply) reducing available above-ground inventories,” added Byrne.

The growth in PGM recycling would off-set some of the primary supply short-fall; however, the markets could enter a sustained period of fundamental deficits, which would be supportive of

higher metal prices, he said.

“Even if [the] strike ended tomorrow, it would take two months to gear back up production, meaning that conditions are likely to be similar for much of the third quarter of the year, and likely into the fourth quarter too.

“All the while, this will have knock-on impacts on the wider economy and [strikes in other sectors] will likely start to overlap in the third quarter too,” Nomura economist Peter Attard Mon-talto said. ― MiningWeekly •

18 ANALYSIS

Mobster believes in signs. Like a weathercock indicating which direction the wind is blowing, signs give us a general direction of things.

Some signs - like the weather-cock - are practical and tangible. Others - like the ones Mobster is about to describe - are more sub-tle and interpretive. But all signs are important. In the inquiry of

signs, smoke signifies fire. Every-body knows that. So as Mobster sat in a hotel room that was slowly but surely filling up with smoke as some electric cables had caught fire somewhere, a sense of doom was all too overpowering.

What was overpowering too was the passive befuddlement of the hundreds of engineers and elec-tricity geniuses that were set to be appointed to the numerous ZESA boards.

As the room filled up with smoke to choking levels, all these 'engi-neers' could do was point at the smoke and laugh. Mobster is not an engineer but the smoke was unmistakably from burning cables.

Now, Zimbabwe has been suffer-ing from crippling power short-ages for a decade and half now, and most people were pinning hopes of a resolution to the power crisis following the appointment of the new ZESA boards last week. To those people Mobster says:

"Mwuahahahaha...hahahaha...Mwuahahahaha...hahahaha....Mwauaaaaaahahahahahahahaha-haha..hahahhahaha...Mwauaha-hahahha..die foolish mortals" (Ok, remove the die foolish mortals part, but keep the rest).

But seriously, we are doomed. If, in the event of a crisis, a pointing of fingers and laughter are all the new ZESA boards members can accomplish then Mobster foresees a blacked-out future.

Now in the philosophy of signs, there is the interesting concept of the 'infinite semiosis' of signs, which basically follows that an infinity of further signs both pro-ceed and precede from any given sign.

It was therefore very telling too, that the energy minister and his permanent secretary both crowed about how they had amazingly organised the present event in "10 minutes" just the previous day, having sent text messages to the new appointees informing

them of their appointment.

Significant too, were the contents of the new boards. New wine into old wineskins or old wine in new bottles, nothing good ever comes out of that. It's coming...and it's coming a little sooner than you think. Total black-out.

Or maybe Mobster is just being notorious for nothing. After all, the smoke did eventually just dis-appear and the boards appoint-ments went through without much hitches.

Maybe, just maybe, our electricity problems will just disappear too.

(Mobster is a Zimbabwean phi-losopher 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 represent-ative of this platform. You can send your feedback to her on mobsterzim1980@gmail.com) •

19 MOBSTER’S MONDAY MUSINGS

Doomed to darkness