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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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Matambo calls on financial sector to pick GDP

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Finance Minister, kenneth Matambo

Finance Minister Kenneth Matambo has announced that government is committed to support financial service sector to prop up the country’s Gross Domestic Product (GDP).

Currently contributing over 13 percent to GDP, Matambo said the sector has potential to increase its share. “Hence government’s interest in the sector,” said Matambo addressing delegates at the inaugural Botswana Insurance Holdings Limited (BIHL), Global Financial Summit.

The country has built a strong, resilient and fast growing financial sector underpinned by a robust regulatory framework. The finance minister who is expected to step down next year, noted that government’s commitment to the financial service sector has this year been buttressed by a number of laws passed in July relating to money laundering activities.

In addition, Matambo said the continued investment in the development of information, communication and technologies (ICTs) backbone infrastructure is also to support local banks’ rising appetite for online services.

The Minister said the country remains committed to maintaining micro-economic stability to spur private sector participation in the economy. “Our vision is to become a high income country by 2036,” said Matambo, challenging the private sector to step forward and help government to develop the country, bemoaning the low levels of financial inclusion and shallow domestic capital markets.

He said the private sector should come up with more initiatives to develop further the local capital markets. The Minister’s sentiments were also shared by Martin Davies, Managing Director for Emerging Markets and Africa at Deloitte who has challenged the country to start dealing with its low manufacturing value add.

“How do we start to diversify beyond the single commodity economy,” quizzed Davies, adding that manufacturing increase is vital for low inequality across the country.

“Inequality results in bad public policy, as the state starts to believe and think they have to intervene more,” said Davies, highlighting that the country needs to move away from the absolute concept of state drive growth. Meanwhile, minister Matambo has applauded the private sector for leading economic dialogue in the country through events such as the BIHL Global Finance Summit.

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First Lady advises women entrepreneurs

Keikantse Lesemela

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First lady, Neo Masisi

First Lady, Neo Masisi has urged women entrepreneurs to bring change in the economic development of the country and the rest of Africa.

Speaking during the Lioness Lean in Africa breakfast on Friday, Masisi said women entrepreneurs are remarkable engines of economic growth and job creation. “I believe women entrepreneurs hold incredible potential and credentials on the continent because Africa has the highest percentage of women entrepreneurs in the world.

It is projected that millions of much needed jobs will be created over the next decade and these will be created predominantly through small businesses which are mostly run by women,” said Masisi.She highlighted that women entrepreneurs are also the most powerful engine for equitably distributing growth and they are also solutions for addressing inequality on the continent.

“It is a proven fact that for many generations, women understand the simple concept of barter and commerce. These are the role models of our past and our present and they will continue to inspire new generations to do more for business to grow,” she said.

The Lioness Lean In Breakfast Series brings together inspirational and successful women entrepreneurs to share, inspire and connect with the next generation of great women-led start-ups.

The platform is based on a breakfast networking and speaker presentation format, which has been organized in locations across the African continent for the past year by Lionesses of Africa, empowering over one million women entrepreneurs across the continent.

Stanbic Bank Botswana Head of Personal Markets, Omphemetse Dube said they are pleased to bring the Lionesses of Africa Lean In platform to Botswana once again to bring together women entrepreneurs in the country and help to nurture their growth further.

“Botswana is blessed with a number of thriving female entrepreneurs, and the potential for the next generation of talent is strong. Platforms such as this are therefore paramount in growing the cause and we as a bank are proud to help champion that movement further,” said Dube.

Founder and CEO of Lionesses of Africa,Melanie Hawken noted that Gaborone is a growing and exciting centre for women’s entrepreneurship in Africa. “This is a must-attend event for women entrepreneurs in the country as it gives them the opportunity to hear the inspiring entrepreneurial stories of women who are building great businesses here,” she said.

The annual Lionesses of Africa event allows entrepreneurs to benefit from the insights and advice of women entrepreneurs who have seen and experienced it all and to also provide an excellent opportunity for networking.

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