Posts Tagged ‘BRICS News’

India, Iran boost strategic ties

Iran’s President Hassan Rouhani (left) has told India’s Prime Minister Narendra Modi that the two countries are strategic partners [Image: BRICS2015]

India and Iran have just completed a round of negotiations which saw the two countries boost their economic ties despite Washington’s pressure on Tehran.

Iranian President Hassan Rouhani was in New Delhi this weekend to meet with Indian Prime Minister Narendra Modi to sign nine new trade agreements.

The agreements include the development of the strategic port of Chabahar in Iran.

India intends to lease two berths at Chabahar for 10 years. The port will be developed through a special purpose vehicle (SPV) which will invest $85.21 million to convert the berths into a container terminal and a multi-purpose cargo terminal.

The port of Chabahar in southeast Iran is pivotal to India’s efforts to open up a route to landlocked Afghanistan where it has developed close security ties and economic interests.

“We are ready to sign bilateral and trilateral agreements to turn the transit route passing through Chabahar into a strategic pathway serving the reinforcement of regional ties,” Modi said of the deal.

Modi praised the deal saying that it expands New Delhi’s connectivity to reach other markets. India has already exported wheat from Chabahar to Afghanistan

“We will support the construction of the Chabahar-Zahedan rail link so that Chabahar gateway’s potential could be fully utilized,” Modi said.

“We want to expand connectivity, cooperation in the energy sector and the centuries-old bilateral relationship,” he added.

Iran is India’s second largest supplier of crude oil.

Rouhani says that that Iran and India have “very good cooperation” in the two sectors of “transit and energy”.

Tehran has always maintained that New Delhi is “strategic partner and cannot forget the support India extended to Iran during its difficult times”.

“Indian companies are ready to further their investment in the areas of mutual cooperation, including oil and gas,” Modi said.

The BRICS Post with inputs from Agencies

President Ramaphosa inspires in maiden State of the Nation Address

“Send me” is his call as he invokes the legacies of South African icons Nelson Mandela, Albertina Sisulu and Hugh Masikela

Ceremonial parade ahead of the State of the Nation Address in South Africa, February 16, 2018 [PREUSS]

As analysts told The BRICS Post in mid-December, the recall of President Jacob Zuma by the African National Congress (ANC) will be the first test of its new leader, Cyril Ramaphosa.

This was not easily accomplished and it took a postponement of the State of the Nation Address (SONA) from February 8 to February 16 and the threat of a no confidence motion in Parliament, before disgraced former President Jacob Zuma heeded the call of the party he had given his life to and resigned close to midnight on Valentine’s Day.

Cyril Ramaphosa was then elected President by Parliament the following day and in his maiden SONA, Ramaphosa reminded the world that both Nelson Mandela and Albertina Sisulu would have celebrated their 100th birthday this year.

“This Address should have been delivered last week, but was delayed so that we could properly manage issues of political transition. I wish to thank Honourable Members and the people of South Africa for their patience and forbearance,” he said in his opening remarks.

“In celebrating the centenary of Nelson Mandela we are not merely honouring the past, we are building the future,” he continued.

Radio commentator Chris Gibbons told The BRICS Post in December that it was too early to tell what the impact of a Ramaphosa Presidency would be on South Africa, although he noted that financial markets had taken a very positive view of his election victory.

“It’s far too early to tell what the Ramaphosa victory means, particularly because of the ‘hung’ nature of the ANC’s Top Six. If he can achieve the recall of Zuma before February’s State of the Nation speech, along with the installation of a new finance minister, South Africa will be pointing in the right direction,” Gibbons said.

Nelson Mandela University Business School Professor Chris Adendorff was equally optimistic when he spoke to The BRICS Post.

“All in all I am very excited about what lies ahead and we will shortly see a surge of new investors and countries ready to assist South Africa out of deep waters,” he said.

Renewed economic spirit

The rand has been the best performing currency in the world against the US dollar over the past few months as it strengthened by more than a quarter (26 per cent) from R14.57 per US dollar on November 13 to R11.56 on February 16, 2018.

In the first six weeks of this year, foreigners bought a net R16.8 billion ($1.45 billion) worth of South African equities compared with net sales of R22.1 billion ($1.9 billion) in the same period last year.

In his SONA Ramaphosa gave a set of targets that he wanted to achieve so that there would be no further ratings downgrades and economic growth would go back to the 5 per cent plus growth rates of Zuma’s predecessor, Thabo Mbeki.

The list is fairly extensive as the recent erratic and irrational behaviour of Zuma cost South African equity investors almost R2 trillion ($172 billion) in lost wealth according to equity analyst Ryk de Klerk,  if one compares the rating of the Johannesburg Stock Exchange before Zuma fired respected Finance Minister Nhlanhla Nene in December 2015 and its recent rating.

The number one priority is creating more jobs as South Africa’s unemployment rate is more than 26 per cent with youth unemployment near 50 per cent. To this end Ramaphosa said there will be a jobs summit this year‚ as youth unemployment‚ was “our most grave and pressing challenge”.

The recent declaration of a national drought condition has highlighted the neglect of water infrastructure projects during the Zuma years, as the second phase of the Lesotho Highlands Water Project, which brings much needed water from Lesotho to water-scarce South Africa, is years behind schedule. The agreement between the two countries was signed way back in 2011, yet no work has been started on the main dam and first water is only likely to flow to South Africa in 2025 rather than the original 2020.

“I will assemble a team to speed up implementation of new projects‚ particularly water projects‚ health facilities and road maintenance,” Ramaphosa said.

Focus on the mining industry

Another failure of the Zuma years has been the steady decline in the mining industry, once the bedrock of what made South Africa a great place to live in and resulted in South Africa being the top gold producer for more than a century since the discovery of gold on the Witwatersrand in 1886.

South African Chamber of Mines Chief Executive Officer Roger Baxter told The BRICS Post last week that last year was the worst year for the mining industry in terms of the regulatory environment. This was due to the unilateral imposition by the South African government of the third iteration of the Mining Charter, which wiped out more than R50 billion off the market capitalisation of South African mining companies.

Ramaphosa said mining should be seen as a sunrise industry rather than a sunset industry, despite the fact that net fixed investment in the mining industry has declined by 57 per cent since 2008.

“I am certain we will be able to resolve the current impasse and agree on a mining charter that both accelerates transformation and grows this vital sector of our economy,” Ramaphosa said.

A legacy of the Zuma years has been an expanded civil service while private sector employment has been stagnant as patronage permeated the tendering and procurement practices of government at all three tiers of government as well as state-owned enterprises (SOEs).

“We will initiate a process to review the configuration‚ number and size of national government departments. The recent action we have taken at Eskom to strengthen governance‚ root out corruption and restore its financial position is just the beginning,” Ramaphosa said.

At the end of his speech Ramaphosa invoked the words from Hugh Masekela’s song ‘Thuma Mina’.

“We are at a moment in the history of our nation when the people, through their determination, have started to turn the country around. We can envisage the triumph over poverty, we can see the end of the battle against AIDS. Now is the time to lend a hand. Now is the time for each of us to say ‘send me’. Now is the time for all of us to work together, in honour of Nelson Mandela, to build a new, better South Africa for all, ”Ramaphosa concluded.

Private wealth management expert Ben Pieterse told The BRICS Post that he found the speech inspiring and filled him with hope.

“What a man. A President we can be proud of. His speech was one of hope and meaning,” he said.

Helmo Preuss in Grahamstown, South Africa for The BRICS Post

Modi: India committed to protecting the environment

Both China and India have called on industrialized nations to do more to combat climate change and curb carbon emissions [Xinhua]

India will not shrink away from its responsibility to protect the environment, Indian Prime Minister Narendra Modi said at a World Sustainable Development Summit in New Delhi on Friday.

“Respect for nature is part of India’s culture. We consider Earth our mother. India believes in growth but is also committed to protecting the environment,” he said.

He also urged other leading countries to fulfill their commitments to a global unified approach to dealing with climate change.

The prime minister said different countries had different responsbilities and equity in reducing carbon emissions and thwarting drastic rises in temperature.

During the Climate Change negotiations in Paris, France in November 2015, India expressed concern that some developed countries would shift their responsibilities to developing nations.

India has always maintained that some developed countries have “historical” responsibilities toward climate change, and that developed and developing countries cannot be put on the same level.

Industrialized nations must do more, India has argued.

In the meantime, Delhi is commited to its Intended Nationally Determined Contribution (INDC) to slash the rate of carbon emissions relative to gross domestic product by 33-35 per cent by 2030 from 2005 levels.

Modi on Friday also stressed the urgency of water appropriation.

“We are committed to ensuring that no farm goes without water. We are working to electrify every household of the country,” he said.

The BRICS Post with inputs from Agencies

Cape Town’s Day Zero pushed to June

In May 2017 Cape Town only received 6 mm compared with 60 mm in May 2014

Many countries in Africa are facing severe drought and water shortages [Xinhua][/caption]Cape Town’s Day Zero, when the taps run dry and residents have to queue for 25 litres (l) of water each per day, has been pushed out to June from an earlier expected April as residents have cut their consumption and there has been some rain.

The main rainy season is from May to August and if Cape Town gets its long-term average May rainfall of 72 millimetres (mm) then Day Zero will not take place. In May 2017, however, Cape Town only received 6 mm compared with 60 mm in May 2014.

Cape Town has imposed water restrictions (red dotted line in the graph below) from the beginning of 2016, but in general, those restrictions have been exceeded except in the wet winter months, so the restrictions have been progressively tightened.

Cape Town reduced its water use over the past week to an average of 529-million litres a day – the lowest daily consumption achieved to date.
“Over this past weekend, residents consumed just 499-million litres a day, the first time we have achieved the daily target of less than 500-million litres a day,” Democratic Alliance leader Mmusi Maimane said on Tuesday.

Rain water levels have decreased in recent years

At the start of February, the city moved ahead with the implementation of its level 6B water restrictions and tariffs to limit water use to 50 l per day per person.

Climate change will result in more frequent and severe weather events, increases in temperature in many regions and resulting changes in precipitation patterns. This may result in rainfall in the Western Cape falling by 30% by 2050, even as the city’s population increases it is attracting migrants from other provinces.

The combination of decreasing rainfall and increasing population means there is an urgent need to build more water storage dams in the Western Cape so that economic progress can continue.

This was why the Minister of Water and Sanitation, Ms Nomvula Mokonyane, said in her keynote speech at the 84th annual conference of the International Commission on Large Dams (ICOLD) in Johannesburg in May 2016 that the department was looking at new dams and new water transfer schemes.

“This year’s drought has also opened up our eyes to invest more on water transfer schemes. As a department, we should be able to transfer water from areas of high supply to those under stress when the need arises, thus my department is investigating the possibility of building more of these schemes. We have also commenced with the feasibility study on a project to augment water supply to the City of Cape Town and the surrounding areas,” she said.

The drought is not confined to Cape Town as the Northern Cape, Western Cape and Eastern Cape have already been declared provincial disasters and on February 13 a national drought disaster was declared.

“The reason that I think it would be useful to declare a national state of disaster is because then everything is in place for anything that we need to do that may require us to shortcut certain systems,” Western Cape Premier Helen Zille said.

By Helmo Preuss for The BRICS Post

ASEAN, China to work on maritime Code of Conduct

Trade ties have significantly improved and tensions over the South China Sea have eased since Xi called Duterte’s October 2016 visit to Beijing a “milestone” in China-Philippine relations [Xinhua]

China and the Association of Southeast Asian Nations (ASEAN) have agreed to begin work on a Code of Conduct in the South China Sea, the media in the Philippines reported Wednesday.

Chinese Vice Foreign Minister Kong Xuanyou was in the capital Manila on Tuesday to meet with his Philippine counterpart to discuss security issues in the South China Sea, and the two said that discussions over the Code would begin in early March.

China and the Philippines were involved in a territorial spat over rights to that body of water two years ago.

In 2015, the International Court of arbitration in The Hague ruled that China’s historic claims to most of the South China Sea were invalid.

China called the ruling a farce and said it would not recognize it as it was issued unilaterally, and initiated by the former Philippine government.

But in June 2016, Rodrigo Duterte became president, effectively reversing tension over the South China Sea territorial disputes.

On Tuesday, Kong and Philippine Foreign Undersecretary Enrique Manalo issued a statement which reaffirmed freedom of navigation in and overflight above the South China Sea.

The two countries have established a Bilateral Consultation Mechanism (BCM) to deal with the South China Sea maritime territory.

“There were intensive discussions on mutually beneficial joint initiatives and consensus on the convening of technical working groups in the areas of fisheries, oil and gas, marine scientific research and marine environmental protection, and political security, in the framework of the BCM,” a statement jointly issued by both diplomats said.

Last year, the two countries signed a $1.7 billion trade deal.

In the meantime, ASEAN and Chinese defense officials are planning to hold their first joint naval drills in the South China Sea later in 2018.

The BRICS Post with inputs from Agencies

Western interventions in the Middle East failed – French PM

Entire cities have been destroyed by seven years of intense warfare in Syria [Xinhua]

French Prime Minister Edouard Philippe has called the West’s method of democratization by force a mistake and said that change must happen over time.

“Military interventions like we have seen in Iraq, Afghanistan and Libya to impose democracy through fire failed to achieve their objectives,” Philippe said at the opening of the 2018 World Government Summit in Dubai.

Philippe’s comments are poignant because they fall within the scope of the Summit’s theme – Shaping Future Governments – and come at a time when Syria, Iraq and Libya appearing to be crumbling states after US-led coalition invasions and regime change.

More than a third of Iraq was controlled by terrorist forces like the Islamic State while dozens of militias impose their style of rule today with a weakened central government.

In Libya, different factions backed by different regional states continue to war over control of the country and its vast resources.

In Syria, while the Islamic State has been largely defeated new conflict has arisen with regional players like Turkey and Iran taking military action to protect their interests.

In just these three conflict zones, hundreds of thousands of people have been killed and there has been an exodus of millions of refugees to Europe and neighboring Middle Eastern countries.

Philippe said that democratization cannot be exported. He pointed to the examples of European states which took centuries to progress toward democracy and libertarianism.

The BRICS Post with inputs from Agencies

South Africa mining: Best mood since 2008 crisis

Participants at the Mining Indaba forum are upbeat on prospects for African mining industry

Mining Indaba forum is upbeat about prospects in the mining industry

The mood at this year’s Investing in African Mining Indaba in Cape Town was the best since the 2008 Global Financial Crisis according to a wide range of participants interviewed by The BRICS Post at the sidelines of this year’s event.

South African Chamber of Mines Chief Executive Officer set the tone with the first event at the Mining Investment at 7am on February 5.

He told The BRICS Post that last year was the worst year for the mining industry in terms of the regulatory environment.

This was due to the unilateral imposition by the South African government of the third iteration of the Mining Charter, which wiped out more than R50 billion ($4.17 billion) off the market capitalisation of South African mining companies.

He was hopeful that under the new management team of African National Congress President Cyril Ramaphosa, who was elected in December 2017 and was a former leader of the mine-workers trade union, a new social compact could be reached that was mutually beneficial.

“I have been in discussion with senior leaders of the new team and I think we all want to create the 50,000 new mining jobs and the 100,000 new jobs in ancillary services that a regulatory environment conducive to long term mining investment would create,” he said.

“There are green shoots visible and I am positive about the year ahead.

The Chamber of Mines surveyed its members towards the end of 2017 on what a more conducive regulatory environment would mean for fixed investment and job creation.

The result was that the estimated capital spending in the mining sector (stretching over the next four years) amounted to more than R145 billion, but a more certain and conducive environment (covering at least another three years) would unlock an additional R122 billion ($10.17 billion) or an 84 per cent increase.

Confidence in South Africa’s regulatory framework has all but vanished, so fixed investment in mining has been stagnant since 2009, while net investment has declined by 57 per cent since 2008 and it is has been outside investors such as India’s Vedanta that have invested in new projects such as Gamsberg.

Feeding demand

There is interest in junior mining companies

The key benefit to exploring multi-commodity mineral deposits such as the Gamsberg is that these activities will feed the increasing industrial demand created by accelerating technological innovation in batteries.

This demand is reflected in the ongoing upward trend in the so-called “battery minerals” prices of copper, cobalt, lithium, nickel and zinc. This is anticipation of the electric vehicle (EV) revolution, which will have an impact on commodities form 2020 onwards, as that is when the mass market in EV will take off in China and the US, with Europe following in the subsequent years.

Commodities trading giant Glencore has for instance said that forecast EV-related metal demand will be significant from as early as 2020 – estimates are an additional 390,000 tons of copper; 85,000 tons of nickel and 24,000 tons of cobalt will be needed, yet major mines take at least a decade to move from project to producing mine.

The additional forecast metal requirements by 2030 amount to a massive 4.1 million tons of copper (equivalent to 18 per cent of 2016 supply), some 1.1 million tons of nickel (56 per cent of 2016 supply), and 314,000 tons of cobalt (equivalent to 314 per cent of 2016 supply).

The major part of this additional supply will have to be sourced from mines in Africa with the Democratic Republic of the Congo the most-favoured country in terms of resources.

In order to sustainably mine in Africa, mining companies need a “social licence to mine” that makes use of local labour, the latest technology to ensure a safe and healthy environment and then to leave a legacy such as manufacturing and/or tourism infrastructure that can continue to provide a livelihood once mining operations have ceased.

To show what the digital age holds out in terms of great opportunities for mining companies to reduce risk and improve safety and profitability; SRK Consulting (SA) chairman William Joughin gave delegates a taste of what is already being achieved.

“Larger quantities of better and more reliable data – combined with specialised and in-depth engineering experience – are a real step-change in our ability to understand and manage project risk. Today’s technology gives us the power to collect and analyse data in previously unimaginable quantities – and with remarkable benefits”, he said.

The allure of junior mining co’s

Alex Grose, the managing director of Mining Indaba, told The BRICS Post that what stood out for him at this year’s event was the interest by investors in junior mining companies, which had previously been neglected by investors as they were seen as being too high risk.

“It is a welcome change and we have provided a platform for these junior mining companies to show case their projects. There is also active participation of African governments at this year’s event and we have 36 African Mining Ministers attending. In addition we have also seen greater overseas participation with the number of international investors increasing by 23 per cent compared with last year,” he said.

TSX-listed Thor Explorations Ltd was the winner of the 2018 Investment Battlefield for their gold exploration project located in Osun, Nigeria.

CEO Segun Lawson accepted the award after pitching the project to a panel of judges made up of leading analysts and investors. Thor Exploration was selected as the most promising of 22 junior mining companies who participated in the battlefield. The runner up was Algold Resources, a gold explorer and developer in Mauritania.

“Identifying the best emerging mining companies for investors and supporting the development of new projects is a critical part of Mining Indaba,” said Harry Chapman, Director of Content for the Mining Indaba.

Junior mining companies who took part in the Investment Battlefield were each assigned a broker mentor who gave advice on delivering presentations and approaching investors.

Helmo Preuss in Cape Town, South Africa for the BRICS Post

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