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Anglo halves business units, shelves divi, cuts 3 850 plat jobs

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The share price of Anglo American fell by more than 9 percent on Tuesday after the diversified major set out radical portfolio restructuring, further material cost savings, more capital expenditure (capex) reductions, a reduction of the total number of employees to 50 000 and a retention of 20 to 25 assets from the current 50.

Anglo American Platinum (Amplats) shares fell by a similar percentage after the company said it was postponing investment in all growth and replacement projects and outlined its release of 3 850 employees.

Kumba Iron Ore said it was targeting unit costs of $30/t and a breakeven price of $40/t for 2016 to cope with badly deteriorating conditions in the global iron-ore market. Anglo American itself outlined that the severity of commodity price deterioration required bolder action, which would see 60 percent of its assets being sold or stalled.

“Any asset that’s cash negative will not remain in operation,” Anglo American CEO Mark Cutifani said in a media conference call from London, in which Creamer Media’s Mining Weekly Online participated. The dividend was being suspended and the progressive dividend concept abandoned completely as being inappropriate for cyclical companies.

The current six business units would be halved to three – De Beers for diamonds, industrial metals for base metals and platinum, and bulk commodities for coal and iron-ore. The commodities outlook for bulk was seen as being the worst of the three units with the outlook for diamonds the best and the outlook for industrial metals in the middle ground.

But together with the additional material capital, cost saving and productivity measures, the company was setting out an accelerated and more aggressive strategic restructuring of the portfolio to focus on assets that were best placed to deliver free cash flow through the cycle and that constituted the core long-term value proposition of Anglo American.

The company had categorised the assets to be retained as ‘priority one’ assets. In response to Mining Weekly Online’s request for a country outline of the company’s ‘priority one’ assets, only the Venetia diamond project in South Africa’s Limpopo province was divulged as being a ‘priority one’ mine, where there was no risk of the current R20-billion Venetia underground project being curtained.

The detail of the future portfolio would be set out in February, with the aim of delivering a resilient Anglo American and a step change in the company’s transformation.

“This will be a totally different looking company,” Cutifani told journalists, adding that it would be placed in a more competitive position to deliver sustainable shareholder returns.

Anglo American’s London office would co-locate with that of De Beers in 2017. In a drive towards operational discipline, cost and productivity improvements of $3.7-billion were being targeted from 2013 to 2017, of which $1.6-billion would be delivered by end 2015, $1.1-billion in 2016, and $1-billion in 2017.

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Cell City rewards customers

Keikantse Lesemela

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Cell City gave away two Toyota Hilux pick up cars worth about P300 000 and three Hisense televion sets worth P15 000 each to their customers through their annual competition.

In partnership with Hisense and Orange Botswana, Cell City conducts annual competitions to reward their customers and contribute to citizen empowerment. Handing over the cars on Friday, Cell City Chief Executive Officer, Brian White said through the competition they want to satisfy their customers and give back to the community. “Cell City and Orange clients were given a chance to win either a Toyota Hilux pickup or a Hisense television set.

All they had to do was purchase any Hisense mobile phone from a Cell City or Orange retail outlet and fill in the competition form in the store,” said White.Thato Ntshabele, who won one of the cars told the Business Trends that she bought a Hisense cell phone worth P900. 00.

“I never expected that I can win a car. I was just filling the forms and dropped into the entry box and I forgot about it. I am so happy to receive this prize and I thank Cell City for this opportunity,” said Ntshabele. Another winner, Dimakatso Mmusi expressed his excitement saying he had always wanted a van and he is grateful to Cell City.

“I just bought a cell phone worth P899.00 at Cell City Railpark mall, I never expected anything, and I was just submitting the form as I was requested by the shop assistants. This car is very useful to me,” said Dimakatso.

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Smecha chillie hits the shelves

Keikantse Lesemela

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For the love of food and the passion to apply modern technology processes in food manufacturing locally, Kgalaletso Mothoagae established her own brand, Smecha specializing in relishes.

She processes and packages chillie in 325 gramms and 1 litre bottles selling at P50 and P150. She told the Business Trends that she decided to process chillies as it is one of the products that are rarely processed in the food industry.

She started cooking it for home consumption and later started selling to friends and currently the product has gone beyond borders at South African Spar shops and Restaurants. “I couldn’t look for any other vegetable as most of them have already been processed in the market. It is my first product of research in the food industry so I found out that I can do good business with this product. This chillie is free from preservatives but still has extended shelf life of 6 months,” said Mothoagae

The Kanye born young lady studied food technology and has the passion to explore the food processing market in Botswana and contribute to reduce the high food import bill. “I wanted to explore more about food and use my skills to contribute to the development of the local food processing and manufacturing industry. I also wanted to supplement my income at the same time,” said Mothoagae.

She has a degree in Food Technology. She says there is a lot of potential for business growth as there is a demand for the product locally and in South Africa. “My main customers are individuals in homes, they have embraced the product, and they love the taste. There is also a market that has been secured in SA; it is available in several shops like spars and some restaurants”. In future, Mothoagae said she would increase the product range to 10 using various vegetables and flavours.

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