Cape Town – A roundup of Monday’s top economic and finance reads on Fin24.
#MiningIndaba: Mining execs happy with ‘Ramaphosa medicine’
Deputy President Cyril Ramaphosa has reinvigorated hope within the mining industry, with executives at the African Mining Indaba praising recent changes in the country steamrolled under the new ANC president’s watch.
At an early morning press briefing on Monday, Roger Baxter, CEO of the Chamber of Mines, which represents 90% of the industry, noted the “new sense of hope and buoyancy” which has swept over South Africa and the industry in recent weeks.
Baxter said the chamber has been engaging with “key leaders” of the ANC to find a way to get the industry back on track.
Meanwhile, Mines Minister Mosebenzi Zwane faced backlash after Baxter criticised the Department of Mineral Resources leadership at an early morning briefing ahead of the African Mining Indaba 2018.
Speaking to journalists on Monday, Baxter gave an overview of expectations for the industry in 2018 and reflected on the challenges of 2017.
“The challenge in the regulatory environment was the worst the industry experienced,” he said, referring to Mining Charter 2017.
He said Zwane’s actions had the potential to sink the industry. “The extent of damage to institutions, the economy and the mining industry particularly has been immense.”
Petrol price relief for motorists
The per litre price of all grades of petrol will be 30c cheaper from Wednesday, the Department of Energy announced on Monday.
The latest decrease comes on the back of a sterling rand performance against the dollar.
The price of both grades of diesel will decline by 17c a litre, illuminating paraffin (wholesale) and illuminating paraffin (Single Maximum National Retail price) 19c and 26c respectively and the maximum retail price of LPGas will decrease by 23c a kilogram.
How Eskom’s state rot could sink Zuma
The name of Eskom, Africa’s largest electricity company, has become synonymous with the worst corruption scandals in South Africa and the utility could well become the final nail in the political coffin of President Jacob Zuma.
The sacking of yet another of its short-lived CEOs and the release of dire financial results confirmed the depth of the crisis plaguing the power utility.
Eskom’s woes started in 2007 with the highly unpopular power shortages that plunged many neighbourhoods into darkness on a nightly basis. Outages have been sharply reduced, but credit rating agencies have repeatedly downgraded the power utility over its financial and liquidity problems.
Now the new head of the ruling ANC party, Cyril Ramaphosa, has moved in to overhaul Eskom as well as ease President Zuma out of office.
Eskom, meanwhile turned to the Public Investment Corporation for a lifeline to keep it running in February. The PIC said in statement
Citing confidence in the newly appointed Eskom board, the PIC said it, on behalf of the Government Employees Pension Fund (GEPF), was advancing a
R5bn bridging facility to Eskom for one month. The loan will fund the
company’s operations during the month of February 2018.
approached the PIC, indicating that it was experiencing enormous
liquidity constraints, which were threatening the company’s going
Ramaphosa’s most dangerous week is upon us – Daniel Silke
Meanwhile, political analyst Daniel Silke says this week is likely to be the most dangerous few days for Cyril Ramaphosa since he became ANC president in December. And it is the showpiece State of the Nation Address that will play its part as a key catalyst in the unfolding political drama.
It’s the week in which those supporting him must effectively secure an early retirement of President Jacob Zuma – or face losing the substantial momentum of hope that has been created over the last six weeks.
And while momentum can be lost – and later found – Ramaphosa’s narrow elective conference victory and the very divided Top 6 (and broader ANC) necessitate a much swifter response from the new ANC president.
Capitec defends its loan book as Viceroy takes aim at SARB
Capitec [JSE:CPI] defended the robustness of its loan book on Monday, while US-based short seller Viceroy Research criticised the South African Reserve Bank (SARB) for previously vouching for the bank.
Viceroy in late January published a report labeling Capitec a “loan shark” with bad debt that should be placed under the curatorship of the SARB.
The report initially caused Capitec’s share price to drop, but it has strengthened since then.
Capitec shares were trading at R871.23 on the JSE at 16:56 on Monday – 5.74% lower than its previous close.
Paying back millions ‘not enough’ as Molefe and others face criminal charges
Trade Union Solidarity will lay criminal charges against former Eskom boss Brian Molefe on Tuesday over his controversial golden handshake.
But the trade union said the charges handed over to the National Prosecuting Authority, the Hawks and the South African Police Service will also include other Eskom officials who were complicit in Molefe’s pension scandal. Solidarity will reveal the people implicated on Tuesday, when laying the charges.
Solidarity said the move comes in the wake of, among other things, a “condemnatory finding” by a full bench of the North Gauteng High Court in January. The court ruled that Molefe had 10 days to pay back about R11m he has received from the power utility, as part of a R30m payout.
Solidarity said the ruling justifies a criminal prosecution.
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