Africa news in brief

07 November 2018 | Economics

Zimbabwe to announce winning bidders for mining assets

Zimbabwe will announce in two weeks the successful bidders for assets owned by state-owned mining company ZMDC, including gold mines, the mines minister said on Monday, adding more companies would be put on sale at the end of November.

Selling struggling state-owned companies, known locally as parastatals, is part of President Emmerson Mnangagwa’s wider reforms to cut government expenditure.

Mines minister Winston Chitando told a parliamentary committee that after announcing winning bidders for its six mines, the Zimbabwe Mining and Development Corporation (ZMDC) would put on sale its remaining 20 assets by the end of this month.

ZMDC will either sell outright, or seek joint ventures, for the mines, most of which are either operating below capacity or under care and maintenance, Chitando said.

London-listed Caledonia Mining Corp, which already operates Blanket mine in southern Zimbabwe, is among the bidders for the two gold mines.

“As government, we would like to see each and every asset owned by ZMDC getting into production,” Chitando said.

Gold is Zimbabwe’s single largest mineral export. Bullion output reached a record 994 726 ounces between January and October this year, compared with 952 397 ounces for the whole of 2017, Chitando said.

-Nampa/Reuters

Equatorial Guinea's energy sector gets US$2.4 bln boost

Equatorial Guinea’s energy industry has secured US$2.4 billion of new investment from US firms with 11 wells expected to be drilled from next year, an oil ministry source with direct knowledge told Reuters on Monday.

In September, oil minister Gabriel Obiang Lima warned that the government might refuse extensions of existing licences to oil companies unless they collectively invested a minimum of US$2 billion in the country.

“We have secured US$2.4 billion worth of investment that will go into drilling, into the backfill project and increasing production which has been declining,” the source said following three weeks of talks in Frankfurt, Houston and Dallas.

Companies expected to invest include ExxonMobil, Kosmos Energy, Marathon Oil Corp and Noble Energy.

OPEC member Equatorial Guinea is Sub-Saharan Africa’s third-largest oil producer and relies mainly on oil and gas exports to power its economy.

Future production is based on pooling supply from stranded gas fields in Equatorial Guinea and the wider region, raising the prospect of boosting LNG output and state energy revenue.

“You are going to see between US$300 to US$400 million capital investment between Noble, Atlas Petroleum, Marathon and Glencore and all the partners in Block O and I for this backfill project… so you are going to be guaranteed LNG to 2030/35,” the oil ministry source said.

Negotiations were also continuing with potential LNG off-takers as Shell’s exclusive arrangement draws to a close in 2020, which Reuters exclusively reported in May.

“There are no negotiations with Shell because the test the government had for Shell was whether they would invest and they have declined and shown no interest to invest. You might even see an American company getting the new off-take agreement because they are investing and taking risks,” the source said.

-Nampa/Reuters

Mali on track for GDP growth of 5%

Mali’s economy is forecast to grow by 5% this year, down from 5.3% in 2017, the International Monetary Fund said.

The country, a gold producer, expects agricultural production of grain and cotton to lead economic growth. The IMF forecast inflation at 1.9%

-Nampa/Reuters

Kenyan private sector activity rebounds in October

Growth in the Kenyan private sector rebounded in October, after cost pressures held it back the previous month, a survey showed on Monday.

The Markit Stanbic Bank Kenya Purchasing Managers’ Index(PMI) for manufacturing and services rose to 54.0 from 52.7 the previous month. A reading above 50.0 denotes growth.

“The onset of the short rain season, which so far seems quite positive for the agrarian sector, could help GDP growth recover in the fourth quarter of 2018,” said Jibran Qureishi, the economist for East Africa at Stanbic Bank.

Sentiment had turned decidedly negative in September after the government imposed a new tax on fuel, but it reduced the proposed rate by half after a public outcry.

-Nampa/Reuters