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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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SMEs benefit from Consumer Fair growth

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The Botswana Investment and Trade Centre (BITC) has applauded Botswana Consumer Fair’s continued efforts to improve small to medium enterprises’ linkages.

BITC Chief Executive Officer, Keletsositse Olebile, when opening the fair, said the event has provided interactive forum for both local and foreign exhibitors. He said the shopping show has enabled manufacturers, wholesalers and traders to market their products directly to consumers, an alignment to government’s endeavors.

“As part of government intention, we continually encourage local sourcing by retailers and distributors,” said Olebile who is just few months into his new post. He further celebrated the growth of Botswana Consumer Fair over the years, attributing the expansion to quality of goods displayed at the previous shows.“Improved quality and increased variety of wares increases the interest of the visitors and makes them look forward to returning the following year,” said Olebile.

This year’s exhibitors at the 13th event still running under the banner: ‘It is more than just shopping’ have been drawn from Lesotho, Zambia, Swaziland, South Africa, Nigeria, Ghana, Kenya, Egypt, Japan, India, Tanzania and Zimbabwe.

Consumer Fair is a flagship event for Fairgrounds Holdings and provides a platform for small medium enterprises (SMEs) from the different sectors of the economy to showcase and promote their products and services. In addition, the SMEs are expected to establish long term business linkages and promote local manufactured goods.Fairgrounds Holdings is already optimistic that the Fair immensely contribute to the socio-economic development of the country through supporting SMEs.

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‘Involve SMMEs in standards development’-Minister

Keikantse Lesemela

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Minister of Investment, Trade and Industry, Bogolo Kenewendo appealed to Botswana Bureau of Standards (BOBS) to include the Small, Medium and Micro Enterprises (SMMEs) when developing the standards to improve the sector.

She said the Ministry of Investment, Trade and Industry has identified three areas of focus going forward which are modeled on SMME development, investment promotion and export development apexes. “I would like to implore you to include this sector in standards development processes and assist in improving SMMEs conformity to standards and compliance to technical regulations,” said Kenewendo.

Speaking during the BOBS Technical Committee Members appreciation ceremony on Thursday, Kenewendo explained that the important roles of standards are underpinned by the aspirations and intentions espoused in both diversified export led economic growth and job creation as priority areas. “It goes without saying that the diversification of the economy requires a National Quality Infrastructure and Technical Regulatory Framework that promote competitiveness of Botswana goods and services.”

She also emphasized that an effective National Quality Infrastructure and Technical Regulatory Framework are essential as they provide crucial links to global trade, market access and export competitiveness through their contribution to consumer confidence in product safety, quality and the environment.Since inception in 1997 BOBS has published more than 1700 standards through 48 technical committees across several sectors of the economy; 109 certification licences have been issued against some of these standards. Currently 46 Botswana Standards are being implemented through the standards regulations with a view to protecting the health and safety of consumers as well as protection of the environment.

On her note, BOBS Vice Chairperson of the Standards Council, Professor Edward Dintwa said standards are powerful tools for helping organisations that implement them to realize their potential, have access and compete in the global marketplace. “In this highly competitive and complex world, issues of sustainability and productivity, viewed from economic, environmental and societal perspectives require that businesses must be more efficient in their operations, which can be achieved through the implementation of standards”.

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