By Tawanda Musarurwa

HARARE – The Govern-ment – through the Mines and Minerals Amendment Bill – has come up with a list of strategic minerals in line with contemporary devel-opments and global best practices, Mines and Mining Development Minister Walter Chidhakwa has said.

It is expected that the declaration of the strategic minerals will enhance the country’s benefits from the mining sector.

“Zimbabwe currently pro-duces under 60 minerals, and some of these minerals are mined commercially and hence they are making a

commercial contribution to the economic development. But overtime we have seen

minerals graduating, moving from non-commercial min-erals to becoming commer-

cial minerals depending on what is happening on the international scenario or the

News Update as @ 1530 hours, Monday 14 March 2016

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Govt identifies 19 strategic minerals

Minister Walter Chidhakwa

development needs of that particular mineral,” he said.

Minister Chidhakwa added that the declaration of stra-tegic minerals will benefit mines such as Kamativi, which previously was essen-tially a tin producer.

“For instance tantalite, we know that Kamativi hosts not more than six different type of minerals and the main mineral that was mined in Kamativi was actually just tin and the others were looked at as by-stander minerals that were just there because there was no big demand for them internationally, but as the international economy was growing particularly the electronics sector you begin to see lithium, for example, becoming critical for national economic development

According to the Mines and Mining Development Amend-ment Bill, the following minerals have been declared as strategic minerals: coking coal, natural gas or coal-bed

methane, iron ore, uranium, chrome, platinum group met-als, phosphate ore, beryl-lium, lithium and tin.

The other strategic minerals also include: tantalite, rare earths elements, natural graphite, magnesite, tung-sten, antimony, manganese, fluorspar and caesium.

But these will not be fixed in stone, so to speak.

According to the Govern-ment, “in the interests of the development of the mining industry in Zimbabwe” it can “designate any other mineral to be a strategic or non-stra-tegic mineral in terms of this section (5A).

“The world over, countries have defined resources that are of a strategic nature to them. This includes some OECD member groups that do not have minerals them-selves have defined them but us as a country with abundant mineral resources we have for a long time not defined minerals that are strategic to us,” said Minister Chidhakwa.

The Mines and Minerals Amendment Bill, along with the Minerals Exploration and Marketing Corporation Bill and the Pan African Min-erals University of Science and Technology Bill are expected to be tabled before Parliament in the “next few weeks.”●

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By Funny Hudzerema

HARARE– At least 33 South African companies will par-ticipate at the Zimbabwe International Trade Fair as a commitment to cement busi-ness relationships between the two countries.

In a speech ready on his behalf during the 6th Invest-ment and Trade Initiative conference Deputy Minister Department of Trade and Industry for South Africa Mzwandile Masina said

Zimbabwe and South Africa have got business relations which must be strengthened through joint-ventures part-nerships.

“Ladies and Gentlemen, it is in this vein that we return to Harare, Zimbabwe's leading financial, commercial, and communications hub. South Africa remains committed to partnering with Zimbabwe in

the realisation of our joint economic aspirations.

“This commitment has been translated into tangible initiatives over the years as evidenced by the five pre-vious investment and trade initiatives undertaken,” he said.

He added that a further attestation of South Africa’s commitment can be displayed in our ongoing participation in the Zimbabwe Interna-tional Trade Fair attended by 23 South African exhibitors last year.

“We return this year with a business delegation com-prising of 33 companies representing diverse sectors including Agro-processing, Mining, Health Care, Infra-structure and ICT amongst others.

Currently 75 percent of the ZITF exhibition space has

been taken up with the event running from April 26 to the 30th.

“We need to util ise our resources as African coun-tries to stimulate growth of our countries because they will be util ised by other con-tinents that are capitalising us.

“The African continent loses over 40 percent of its competitiveness because of the absence of or poor and inefficient infrastructure,” he said.

Officially opening the event Industry and Commerce Deputy Minister Chiratidzo Mabuwa said there should be a balance in trade rela-tions between Zimbabwe and South Africa for them to be beneficial to both countries.

“The trade balance is skewed in favour of South Africa for example in 2014 Zimbabwe

exported $2 051 498 612 to South Africa and imported $2,7 million worth of goods from South African resulting in a trade deficit of $684 023 204.

“You will agree with me that there is need to bal-ance our trade flows and we can achieve this by seeking South African investment in Zimbabwe’s productive sec-tor,” she said. In his remarks during the same event South African Ambassador to Zim-babwe Vusi Mavimbela said South Africa’s president will visit Zimbabwe to assess progress on business part-nerships which the two coun-tries signed some time ago.

“President Jacob Zuma will visit Zimbabwe before the end of this year to access developments on business partnerships we have signed, so these projects must be taken seriously,” he said.●

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33 SA companies for ZITF

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HARARE – The Government rejected a proposal by the country’s mobile telecommunica-tion companies to ban the use of over the top services (OTTs) such as WhatsApp which they say are eating into their profits, a cabinet minister has revealed.

Zimbabwe’s mobile networks have in the past generated the bulk of their revenues from pro-vision of calling and messaging services which cost around 24 cents per minute and eight cents per message respectively.

But introduction of OTTs which allow mobile phone users to communicate at far less charges than the mobile phone opera-tors are levying while riding on their very networks, saw hard pressed consumers opting for the cheaper alternatives.

As a result WhatsApp, Viber and Skype are among applications referred to as OTTs that have taken over the communications landscape at the expense of the networks.

Realising that their profitability had been compromised, the operators last year approached government seeking to have the OTTs banned or stifled, Informa-tion Communication Technology, Postal and Courier Services Min-ister, Supa Mandiwanzira said.

“Sometime last year, the telecommunication players approached the ministry con-cerned about the loss of revenue that networks were experienc-ing as a result of over the top services such as Skype, Whats App Calling, Viber and the like, they wanted Government to look at the possibility of either banning or stifling these opera-tions to ensure that they would continue to be profitable,” Min-ister Mandiwanzira said at the recently concluded E-Tech Africa symposium.

“We did mention that as a progressive government, which promotes access to technology, we were averse to the idea of stifling these technologies or banning them.”

He said Government told the operators to look at the devel-opment as an opportunity to facilitate young Zimbabweans to develop applications suitable for local and global use than can rival those coming from abroad.

In line with this idea, the minis-ter said Government has set up an innovation fund that will be funded by the mobile network operators to finance innovations by Zimbabweans.

“We agreed with industry that one percent of the revenue of telecom companies which they generate out the use of telecom-munications services will now go into this specific fund for the promotion of the development of platforms, applications by Zimbabweans,” Minister Mandi-wanzira said.

Government is expecting to mobilise up to $25 million in contributions for the fund in the next two years, he said - New Ziana●

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Government rejects WhatsApp proposal ban -Minister

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BH24 Reporter

HARARE -Farmers have called on Government to pro-vide conducive environment for wheat production this season to boost national food security and reduce imports.

Zimbabwe Commercial Farmers Union president, Mr Wonder Chabikwa yesterday said most farmers were no longer will ing to produce wheat because of the viabil-ity challenges.

He said by encouraging farm-ers to produce wheat this season, Government may reduce import costs and at the same time increase food availability.

“Government came up with an irrigation scheme that benefitted most schemes and A1 farmers. These farm-ers can produce wheat if they are given appropriate resources.

“Government should take it upon itself to avail soft loans to farmers and ensure they have undisturbed electric-

ity supply. We do not want free handouts but affordable loans and there will be no excuse for not producing,”

he said.

Mr Chabikwa said some dam water levels had improved in

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Government should provide conducive environment for wheat production- farmers

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some parts of Mashonaland and could be used for wheat production.

Zimbabwe Indigenous Women Farmers Association Trust, Mrs Depinah Nkomo said farmers were will ing to produce food crops but they were facing challenges.

“This has resulted in most farmers turning to tobacco production where contrac-tors offer inputs and higher prices. We should not be importing food when there are farmers with fertile soils,” she said.

Wheat production has been on the decline since 2008.

Agriculture, Mechanisation and Irrigation Development, Deputy Minister responsible for crops and mechanisation, David Marapira said 60 261 tonnes of wheat where pro-duced last year.

“The decline is largely attrib-uted to intermittent power outages, high cost of produc-

tion and inadequate finan-cial resources. An average area of 16 342ha has been planted to wheat over the past seven years,” he said.

Deputy Minister Marapira said the country had been importing 185 000 tonnes of wheat per year since 2009. Zimbabwe requires 400 000

tonnes of wheat.

“The costs of inputs are too high. Seed and fertil iser costs are high. Wheat is an expensive crop because of the low yields produced by farmers. Electricity charges are stil l high and this dis-courages many farmers from producing the crop. By pro-ducing wheat locally, Govern-ment can reduce the import bill,” he said.

He said importation of flour was also another challenges affecting the wheat sector. He said if flour imports were stopped local millers could buy from farmers at viable prices.●

BH2413

HARARE - The equities market sl ipped back into negative territory as the mainstream industrial index retreated 0.79 to settle at 99.02 as two counters lost ground.

Cigarette manufacturer BAT shed a signif icant $0,3972 to close at $10,7500 while giant telecoms shifted down $0,0190 to trade at $0,2310.

But on the upside giant insurer Old Mutual rose by $0,0800 to close at $1,9000 and Starafrica went up by a marginal $0,0002 to

$0,0095.

Activity was l imited to eight counters.

The mining index was flat at 19.14 as Bindura, Fal-gold, Hwange and RioZim maintained previous

price levels at $0,0095, $0,0050, $0,0300 and $0,1040 respectively- BH24 Reporter ●

ZSE14

Market opens week in the red

MovERs CHANGE TodAy PrIcE USc sHAKERs CHANGE TodAy PrIcE USc

Old Mutual 4.39 190.00 ECONET -7.59 23.10

STARAFRICA 2.15 0.95 BAT -3.56 1,075

IndEx PrEvIoUS TodAy MovE CHANGE

INDUSTRIAL 99.81 99.02 -0.79 points -0.79%

MINING 19.14 19.14 +0.00 POINTS +0.00%

15 ZSE TABlES

ZSE

IndIcES

Stock Exchange

Previous

today

16 dIAry oF EvEnTS

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

PoWEr GEnErATIon STATS

Gen Station

14 March 2016

Energy

(Megawatts)

Hwange 406 MW

Kariba 285 MW

Harare 17 MW

Munyati 0 MW

Bulawayo 18 MW

Imports 0 - 400 MW

Total 1172 Mw

•Thursday 24 March 2016 - Annual General Meeting of Willdale limited; Place: Boardroom, Willdale Administration Block, 19.5km peg lomagundi road, Mount Hampden; Time: 1100 hours...

• Upcoming AGM - TSl, Head office, 28 Simon Mazorodze road, Southerton, 16 March, 1200hrs

• Analyst briefing - old Mutual Zimbabwe, Steward room, Meikles Hotel, March 30, 1430hrs

THE BH24 dIAry

ABUJA — MTN Group has offered $1,5bn to settle a much larger fine from Nige-rian regulators for missing a deadline to disconnect unregistered SIM card users, a document shows.

Africa’s biggest mobile phone group has been in talks with Nigerian authorities to have the $3,9bn penalty reduced and last month made a "good faith" payment of $250m towards a settlement.

In a letter to the Nigerian government from MTN’s law-yer, former US attorney-gen-eral Eric Holder, the com-pany proposed a 300-bill ion naira ($1,5bn) settlement to be paid through a combi-nation of government bond purchases, cash instalments and network access to the Nigerian government.

Mr Holder said in the letter, dated February 24, the offer "ultimately is in the best interest of the FGN (Federal Government of Nigeria) and MTN Nigeria."

MTN said on Friday talks with the Nigerian govern-

ment were ongoing.

"MTN has previously advised shareholders not to make decisions based on press reports, and MTN again urges its shareholders to refrain from doing so," it

said.

Nigeria’s telecoms ministry had no immediate comment.

In its annual results last week, MTN said it had put aside $600m to cover a deal

over the fine, which was originally set at $5,2bn on the basis of charging $1 000 for every unregistered SIM card.

Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.

The fine, equating to more than twice MTN’s annual average capital expenditure over the past five years, came months after Nige-rian President Muhammadu Buhari swept to power after an election campaign that pledged tougher regulation and a fight against corrup-tion.

Shares in MTN, which makes about 37 percent of its sales in Nigeria, were little changed at 147,53 at 8.39am GMT, after ris-ing more than 2 percent shortly after the market opened.-Reuters●

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MTn offers $1,5bn to settle fine imposed by nigeria

BrUSSElS-The Federal Reserve won't raise inter-est rates this week, but will l ikely make clear that as long as US inflation and jobs continue to strengthen, economic weakness overseas won't stop rates from rising fairly soon.

That will be a big change from the last time the Fed met, when uncertainty over the impact of slower growth in China and Europe drove policymakers to signal it would stay on hold until it could make a better call on the outlook.

That in turn was a setback from just a month earlier, when the Fed raised rates for the first time in nearly a decade and seemed ready to move four more times this year.

This week, fresh forecasts from the Fed's 17 officials released after the meeting will almost certainly signal a retreat from that pace, to perhaps two or three rate hikes this year, economists predict and Fed officials themselves have suggested.

But the expected downgrade may largely reflect the drag from the oil and stock mar-ket slide in January and the Fed's decision then to put policy on hold, rather than mounting worries over the

US or global outlook.

Indeed, since the last Fed meeting US inflation has shown signs of stabilising, with one measure published by the Dallas Fed rising to

1,9 percent, its closest to the Fed's 2 percent goal in 2-1/2 years. Meanwhile, the US unemployment rate held at 4,9 percent in February, near the level many Fed offi-cials believe represents full employment.

The European Central Bank's decision last week to ease policy further may help add to confidence that action has been taken to underpin growth in Europe, helping ensure a stalling of global growth drag on the US. That could mean another US rate hike by mid-year and, depending on economic data, more to come after that.

"June seems certainly like a possibility" for the Fed's next rate hike, said former Minneapolis Fed President Narayana Kocherlakota, whose own preference is for the Fed to take out "insur-ance" against a recession by cutting rates back to near zero. Market-based inflation expectations have improved somewhat since the Fed's last meeting, he said, "a real positive" development. - Reuters●

InTErnATIonAl nEWS 18

Fed to sit tight on rates at March meet, hint at hikes to come

By Hilary Joffe

WHEN Old Mutual CEO Bruce Hemphill presented his maiden set of financial results on Friday, he did something pretty unusual: he announced plans to get rid of the company that he took charge of only four months ago.

"I won’t have a role by 2018," he told journalists, as he explained Old Mutual’s plans to separate its four underlying businesses from each other in the next two to three years, after which Old Mutual’s £80m-a-year head office will no longer be required.

This reflects how finan-cial services have changed since 1999, when Old Mutual demutualised, moving its head office to London and locating its primary listing there.

A big part of the rationale for the London listing was that Old Mutual needed to access

a much larger pool of capital than was available in SA to fund its demutualisation, which saw it switch from ownership by policyholders to a listed company owned by shareholders.

The group raised a large sum of capital, with pressure to

spend on expansion. That it did, making some costly mis-takes along the way.

The financial crisis not only showed up the fault lines in some of the group’s ques-tionable investments, but also put question marks over financial conglomerates.

The concentration of risk across and within aspects of financial services — such as banking and insurance — led to the crisis. Regulators responded, globally and in SA, by trying to reduce that concentration, forcing those holding more risk to hold higher levels of capital, mak-

19 analysis19 AnAlySIS

no sacred cows as old Mutual splits structure

20 analysis20 AnAlySIS

ing it ever more costly to be complex.

Mr Hemphill ’s predecessor, Julian Roberts, had done much to fix and streamline the group, which last week reported a strong perfor-mance in its underlying businesses, with strong cash flows and capital ratios. But its structure was unsustain-able.

The "managed separation" plan emerged from a com-prehensive, three-month strategic review in which Old Mutual and subsidiary Ned-bank worked with regulators to explore about 30 different options.

It concluded that this was the right way to go, and the group will separate out Johannesburg-based Old Mutual Emerging Markets — which holds its insurance and wealth businesses in SA and Africa, as well as its controlling stake in Nedbank from listed Nedbank by 2018, listed US institutional asset manager Old Mutual Asset

Management and the group’s unlisted UK wealth manage-ment business.

The regulatory burden was not the main driver. The strategic review concluded that synergies between the four businesses were not suf-ficient to justify the costs of supporting the group struc-ture.

Dismantling the structure means that the underlying businesses can be rated rel-ative to their peers, remov-ing the conglomerate dis-count, which some analysts estimate at as much as 20 percent.

The group has changed its dividend policy, paying out less than before in anticipa-tion of the four businesses needing to be self-sufficient. That may disappoint inves-tors, and some analysts are disappointed too at the dearth of detail about how the managed separation will be implemented.

Mr Hemphill emphasises that

consultation with a wide range of stakeholders will be needed before the group can finalise the details.

That includes the holders of Old Mutual’s debt, which it plans to reduce "materially", regulators in several coun-tries and others.

For Nedbank, the announce-ment brought long-sought clarity about its ownership. Old Mutual will distribute the shares to shareholders, but will keep an "appropriate strategic minority stake" in Nedbank, which Mr Hemphill says will probably be 15 to 20 percent.

Much work is stil l needed on how best to effect the distri-bution, with several options being considered. Unbun-dling shares to Old Mutual shareholders would create a significant overhang in Ned-bank’s shares because of the number of Old Mutual share-holders who could not keep them, or would not want to.

About 25 percent of Old

Mutual’s shares are in the hands of index trackers that track the FTSE index, in which it is included. They will have to sell, as will funds with mandates requiring them to invest in FTSE or UK-domiciled stocks.

Fortunately perhaps, more than half of Old Mutual’s shares are in South Afri-can hands — which reflects some of the confusion that has weighed on the group’s value. Many domestic inves-tors have probably been happy to hold the share for its rand-hedge qualities, as well as its exposure to SA Inc.

Mr Hemphill emphasised the plan is not about bringing Old Mutual home, but rather bringing value to sharehold-ers.

The next few years will show whether, in returning its business units to more natu-ral investors, the group can unlock the value it promis-es.-Bdlive●