Company news in brief
11 March 2019 | Business
South Africa's struggling state power firm Eskom may need more bailouts from government to survive, after the country's energy regulator on Thursday granted it smaller tariff hikes than the utility had wanted.
The government last month promised Eskom a bailout of R69 billion over the next three years, but that is insufficient to cover the revenue shortfalls which will result from the tariff hikes granted by regulator Nersa on Thursday.
Nersa granted Eskom average tariff increases of 9.4%, 8.1% and 5.2% over the next three years, far below the 17.1%, 15.4% and 15.5% Eskom said it needed last month.
The regulator also allowed Eskom to recover R3.9 rand from customers for electricity supplied in the 2017/18 financial year, but it has not yet decided when that recovery will happen.
Nersa disallowed around R100 billion of revenue Eskom sought over the three years from 2019/20 to 2021/22, leaving the company with a shortfall of more than R30 billion when the recent government bailout is factored in. – Nampa/Reuters
Aspen to split SA pharma business
Multinational drugmaker Aspen Pharmacare said it will split its South African Commercial Pharmaceuticals business into two divisions as it disposes of non-core assets to reduce its debt.
Without giving details, the company said in its half-year results statement that it was conducting a strategic review of its South African and European operations and a second phase would develop strategies for each of the businesses.
Although it did not say what each division would include, Aspen said the split would improve its focus on products and customers.
Aspen's normalised headline earnings per share (HEPS) for the six-months ended December 31, fell by 9% to 743.4c from 814.1c a year earlier. HEPS is the main profit gauge in South Africa, which strips out certain one-off items.
Normalised earnings before interest, tax, depreciation and amortisation from continuing operations fell 3% to R5.5 billion, while revenue inched up 1% to R19.7 billion. – Nampa/Reuters
Rio Tinto says bauxite mine set for full production
Global miner Rio Tinto said on Friday that its US$1.9 billion Amrun bauxite mine in northern Australia is set to enter full production after finishing its ramp-up phase, boosting output at its Weipa operations by more than a third.
Rio Tinto produces about 50 million tonnes of the aluminium raw material globally, accounting for around 15% of world supply.
The Amrun mine will produce 22.8 million tonnes at full production, and take Rio's bauxite output at Weipa on Australia's northern tip to 35 million tonnes a year, the company said.
Amrun, which was approved in November 2015, had originally been expected to begin production and shipping in the first half of 2019 and hit full production by the end of the year.
In what it called an industry first, Rio Tinto was able to cut construction time by a year as the 1 km-long export facility was built in modules off-site and then brought to Amrun and hooked up, rather than having all the construction done over-water. – Nampa/Reuters
Tanzania orders water cleanup at Acacia
Acacia Mining Plc has until March 30 to stop waste water pollution at its North Mara gold mine in Tanzania or the mine will be shut down, the country's mining minister said.
Doto Biteko, appointed minister in January with orders to be "strict" on managing Tanzania's mineral wealth, said Acacia must stop contaminated water seeping from a waste storage dam at the mine to nearby communities in the country's north.
North Mara has produced more than 2 million ounces of gold since it began commercial operations in 2002, according Acacia's website.
Biteko said after inspecting the mine that toxic water from waste rock at North Mara's tailings storage facility was being discharged into the environment.
The mine has faced long-standing accusations of pollution, which Acacia Mining has previously denied. – Nampa/Reuters
Germany does not want to ban Huawei
Germany does not want to ban Chinese telecoms equipment maker Huawei Technologies from building its 5G networks, economy minister Peter Altmaier said on Thursday, adding that Berlin would tighten security criteria for all vendors instead.
Asked on a ZDF television talk show if the government plans to bar Huawei from the upcoming 5G auction due to concerns over the global market leader's ties to the Chinese government, Altmaier said: "No, we will not want to exclude any company."
But the government will change the law to ensure that all components used in the 5G networks will be secure and that there will be no violations against data protection rules, he added.
Altmaier also said that the government would not use its increased veto powers to fend off foreign takeovers in this case because the construction of the 5G network was not an issue of a merger or an acquisition.
Germany on Thursday set tougher criteria for vendors supplying telecoms network equipment, stopping short of singling out China's Huawei Technologies for special treatment and instead saying the same rules should apply to all vendors. – Nampa/Reuters