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Court dismisses Base Minerals Zimbabwe's appeal

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A digital copy of the Business News 24 (17 July edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 1530hrs to give a summary of the day's business news.

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Court dismisses Base Minerals Zimbabwe's appeal

  1. 1. News Update as @ 1530 hours, Thursday 17 July 2014 Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw By Fidelis Munyoro The Supreme Court has dismissed an appeal in the case in which Base Min- erals Zimbabwe was seeking to quash a High Court decision made in favour of Mabwe Minerals Zimbabwe in a dis- pute over control of barite Dodge Mine in Shamva. Justice Vernanda Ziyambi threw out the appeal for lack of merit. “The unan- imous decision of this court is that the appeal be and is hereby dismissed with cost,” she said. Base Minerals had approached the Supreme Court on appeal after the High Court stopped it from interfering withMabweMineralsminingoperations at Dodge Mine in Shamva. The firm, whichclaimedtobetheholderofatrib- ute of more than six disputed mining claims at Dodge Mine, had deployed an army of armed security personnel who cut through locks and barriers, chasing Mabwe Minerals guards from the premises and took occupation of the mine in the face of a court order against it. On appeal, the firm’s lawyer Francis Katsande argued that the lower court erred when it dealt with an application forinterdictbroughtbeforeitbyMabwe Minerals when there was an application for same relief pending before another court. The judge, argued Katsande, went remiss by deciding on a matter already before the same court. But Mabwe Minerals lawyer Adv Sithembiso Magwaliba urged the court to throw out the appeal for want of compliance with procedure. He argued that Base Minerals submis- sion that when it deployed its guards at the mine it wanted to enforce a tribute agreement was misplaced in a spolia- tion process adding that a tribute could not be enforced by guns and violence. Adv Magwaliba said Mabwe Minerals were the rightful owners of the mine. He also said the notice of appeal was fatally defective and could not be allowed. Mabwe Minerals, which is engaged in the mining and commercial sales of industrial minerals and met- als, acquired the mineral and metal rights for 110 hectares (272 acres) at its Dodge barite mine in Shamva early this year. The company mainly mines barite, a crystalline mineral of barium sulfate (can be white, yellow or colourless) that is used in paint manufacturing and is mostly used as industrial mineral and is also a chief source of barium chem- icals. The hydrothermal barite deposits on Dodge Mine are considered world class due to their high percentage content of barium sulfate. Court dismisses Base Minerals Zimbabwe's appeal Justice Ziyambi
  2. 2. 2 NEWS Mabwe Minerals director Tapiwa Gurupira told The Herald early this year that the company’s property now cov- ers a total area of 233 hectares (576 acres). He said with the extension, the Dodge Mine property range now extends to include all of the first three mountains and a portion of the fourth mountain moving east-to-west. He said Mabwe Minerals has been targeting the expan- sionsincetheareawasgravitymapped in 2012 indicating the continued pres- ence of barite towards the largest mountain on the western end. Gurupira said with a number of third party geologists having visited the mine, it was certain the company aims for expansion this year. Mabwe Minerals has been making plans to initiate a drilling programme that is necessary to complete the grav- ity mapping interpretation with volume estimates. Now that the Dodge Mine extension certificate has been issued by the office of the Mining Commissioners, WGB Kinsey & Company intends to proceed with finalising the drilling plan. Mabwe Minerals Inc. is a US based nat- uralresourcesandhardassetcompany engaged in the mining, logistics and commercial sales of industrial minerals and metals, with first focus on barite and limestone. • By Funny Hudzerema Adherence to quality standards can contribute to the growth of the Zim- babwean economy, an international standards expert has said. International Organisation for Stand- ards (ISO) expert Jochen Fornather said strengthening standards adher- ence results in the production and provision of goods and services that match the requirements of the global market. “All sectors must be in the SAZ to increase economic development through the standardisation of prod- ucts engagement by all stakeholders. "Through the standardisation of goods and services can result in economic development of about 25 percent and can reduce barriers to trade in Zim- babwe, in Africa and the world," said Fornather. He was speaking at a standards work- shop that was jointly organised by SAZ and the ISO. Fornather said Zimbabwe can draw lessons from the European Union where standardisation is of economic importance. “Every euro invested in standardi- sation generates a forty-fold return and standard goods reduce the level of reduction of transaction costs,” he said. “For example, the Austrian standards body has managed to con- tribute about 2,5 million euros every year through the standardisation of goods and services." Even at the World Trade Organisation (WTO) level, the issue of standards is central as it drives the international trade without barriers agenda. A Zimtrade survey released in May this year showed that 42 percent of products from manufacturing sector were certified, a factor that was hin- dering Zimbabwe's export growth. SAZ director general Eve Gadzikwa said for Zimbabwe to achieve business success issues relating to competi- tiveness, trade and consumer protec- tion needed to be addressed. • 'Standards key to economic growth'
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  4. 4. By Rumbidzayi Zinyuke Meikles Africa employees say they might not benefit anything from the Employee Share Ownership Trust formed in line with the country’s indi- genisation laws as they are yet to receive any funds to purchase the 24 million shares promised by the com- pany. Last year, the group said it would extend assistance to the ESOT if the funds on deposit held by the Reserve Bank of Zimbabwe were repaid. The central bank owes Meikles approxi- mately $76,5 million dating back to 1998. Representatives of different arms of the Meikles group told the the- matic committee on Indigenisation, empowerment and economic devel- opment that only one third of the 10 percent they were promised when the ESOT was formed has been paid for so far. “The board of trustees borrowed $1,4 million from the Old Mutual pension fund to which we contribute and bought eight million shares. We however do not have any money to pay for the remaining shares and we are still waiting for the Government to pay what it owes to the company,” said Rodney Mutinhiri, chairperson of the Worker’s committee. He said the employees would only start benefitting from the ESOT once payment for the remaining shares was complete which meant that those who retired or are laid off work will not benefit. “We are not going to benefit anything from the ESOT until we have paid for all the shares and received the share certificate. This means we will not how many shares each individual is entitled to until that happens. At the same time, we cannot see its growth on our money in the pension fund because it is tied up in the shares,” he said. Chairman of the Tanganda Tea Com- pany worker’s committee Blame Donza said management had refused their offer to contribute towards the payment of the shares. “When we met them in April, management said at the moment there is no money so even if we contribute it will not make a difference because there is a lot of money needed. We had suggested contributing at least $5 per employee every month so that we can pool money to pay for the shares. We were concerned that some of our workers were retiring and leaving with benefiting from the ESOT,” he said. The representatives said they believe the company is stalling the comple- tion of the payment to avoid trans- ferring the shares to the employees. They alleged the group is just putting a show for Government to believe they had complied with indigenisation requirements. • 4 NEWS Meikles workers not benefiting from employee share scheme
  5. 5. 5 MINING Unki Mine's Q2 production remains flat By Tawanda Musarurwa Local platinum producer Unki Mine's output for the second quarter ended 30 June 2014 was flat at 15 000 ounces. In its latest Q2 update, Anglo Ameri- can Platinum (Angloplat) which owns the Unki Mine, said the long-drawn- out strike had no material effect on Unki and the group's other South Africa-based platinum mine - the Mogalakwena and other joint opera- tions and associates. "The industrial action did not impact production at the Mogalakwena and Unki mines nor at the majority of the joint operations and associates. "Mogalakwena mine's production increased by 23 percent to 96 000 ounces, due to higher achieved 4E head grade and increased concen- trator throughput, supported by the mining productivity improvement programmes. Unki mine production was flat at 15 000 ounces," said the group. Unki is the third largest platinum pro- ducer in Zimbabwe. In the first quarter of the current year, Unki's platinum output bumped 4 percent, a factor the company then attributedtohighervolumesdelivered to the concentrator and throughput at the mills. Unki's production figures in the first two quarters of the year are however below guidance as the mine produced 67 000 ounces in the prior year, but this remains a fraction of Amplats’ 1,5 million ounce annual output. Angloplat has so far invested $350 million at Unki since it started opera- tions, producing 67 000 refined plati- num ounces in 2013. Production at Unki been on a steady rise since the mine was fully commis- sioned at the beginning of 2011. The smaller mines notwithstanding, Angloplat said the huge South Afri- ca-based platinum producers were negatively impacted by the strike, which led to a decline in overall refined platinum output. "Equivalent refined platinum pro- duction decreased by 40 percent to 358 000 ounces, primarily due to the industrial action, which began on 23 January 2014 and which affected the Rustenburg, Amandelbult and Union mines in South Africa. The industrial action concluded on 24 June 2014. The total platinum ounces lost due to the industrial action for the second quarter was 239,000 ounces. "Total lost production from the indus- trial action during H1 2014 was 424 000 ounces and a further 16,000 ounces has been lost during the ramp up of operations as "safe return to work" procedures are undertaken before mining can commence. In addition, production was 44,000 ounces lower due to the consolidation of mines at Rustenburg and Union as part of the restructuring in 2013," said AngloPlat. • Unki Mine
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  7. 7. 7 NEWS BH24 Reporter Jersey-registered and London-listed Masawara is set to extend its con- trol of Zimbabwe's largest holding company, TA Holdings by buying out minority shareholders in the group. Masawara - an investment com- pany focused on acquiring interests in companies and projects based in Zimbabwe and the Southern African region - have offered to acquire all the issued ordinary shares in TA Hold- ings not currently under its ambit. Masawara presently holds an effective 39 percent interest in TA Holdings. In a cautionary statement released today, TA Holdings announced that it had received an offer from Masawara to purchase 58,96 percent of the ordinary issued share capital of the company at a price of 20,6 cents per share through a scheme of arrange- ment. "(S)hareholders are advised that the directors have received an offer from Masawara Mauritius Limited (“Masawara”), a wholly owned sub- sidiary of Masawara Plc, for Masawara or its affiliates to acquire all the issued ordinary shares in TA Holdings Lim- ited (“the Company”) not currently held by companies under the control of Masawara Plc, constituting 58,96 percent of the ordinary issued share capital of the Company, at a price of $0,206 (twenty point six United States cents) per share through a scheme of arrangement under Sec- tion 191 of the Companies Act (Chap- ter 23:04)," reads part of the caution- ary. "The requisite notice of the scheme of arrangement and the scheme docu- ment incorporating an explanatory statement, the fair and reasonable opinion of the independent financial advisor appointed by the independ- ent directors of the Company and the independent directors’ opinion and voting recommendations will be sent to the Company’s shareholders in due course. "The offer is subject to all applicable regulatory approvals being met." • Masawara to buyout TA Holdings minorities Mr Mutasa
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  9. 9. BH24 Reporter Beneficiation and value addition will be the running theme for the 34th SADC Summit which will be hosted by Zimbabwe, an official has said. The Summit is set for Victoria Falls next month. Addressing journalists on the prepa- rations for the 34th SADC Summit Foreign Affairs Minister Simbarashe Mumbengegwi on Wednesday said the beneficiation theme was in line with the country's long-term eco- nomic strategy. "(T)his time we have selected a theme on the “SADC Strategy for Economic Transforma- tion: Leveraging the Region’s Diverse Resources for Sustainable Economic and Social Development through Beneficiation and Value Addition”. "This theme has been selected very carefully because Zimbabwe believes very strongly in the importance of beneficiating and value adding of our natural resources," said Minister Mumbengegwi. "I think you have all head how President Robert Mugabe has never stopped talking about this issue. Why should we always export our natural resources in their raw form? By so doing, we only get about 10 percent of the value of our prod- ucts whether they be in agriculture, mining or whatever, we lose a lot. "So, the question of value addition is critical not only to Zimbabwe but to the whole of SADC, so in consultation with the secretariat we have come up with this particular theme." The Government fully appreciates the importance of beneficiating its minerals (as shown by strategies announced by Finance Minister Pat- rick Chinamasa in the 2014 National Budget). Minister Mumbengegwi said the problem was not peculiar to Zimbabwe, but it was common amongst the SADC countries as well. "The SADC region is endowed with resources, the same as Africa as a whole. Very rich in resources, but the paradox is that with such abundance of natural resources we are poor. "That’s the paradox. Why are we poor? Because we do not get the full benefit of our natural resources and this is the thrust we would want to champion not only during President Mugabe’s chairmanship of SADC, but to be able to come up with strategies and programmes of action which can continue even after President Mug- abe has left the chairmanship of the organisation because this is a critical area not only for SADC but for the whole African continent and other developing countries," he said. He however highlighted that apart from discussing the theme, there will also be other administrative aspects that the Summit will address, although the overall agenda is yet to be finalised. Zimbabwe will assume the chairmanship of SADC from August this year to August 2015. To this extent, the country will host all meetings of SADC with the Summit among the most important of these. • 9 NEWS Beneficiation to top 34th Sadc Summit agenda Minister Mumbengegwi
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  11. 11. The equities market has remained sluggish as the week heads to a close, going down 0.32 percent in today's trades. The industrial index slipped by 0.59 points to close at 185.49 points as losses weighed heavy. Hippo lost 10 cents to trade at 70 cents, while cement producer Lafarge dropped 8 cents to trade at 55 cents. AFDIS shed 3 cents to close at 32 cents. Other losses were in TSL which dropped 2 cents to close at 24 cents and NTS which slipped a cent to close at 1.70 cents. On the upside, Colcom led the movers with a 2.70 cents gain to close at 25 cents, and giant retailer OK Zimbabwe recovered a cent to close at 18 cents. Zimplow added 0.60 cents to close at 8.60 cents and MASH (MASH.zw) added 0.10 cent to 2.40 cents. Econet gained 0.50 cents to close at 74.50 cents after reports that the giant telecoms firm's subscriber base grew by 4.1 percent in the first quar- ter of this year to reach nine million. The mining index was 0.90 points (or 1.60 percent) higher to close at 57.02 points as Bindura traded 0.10 cents firmer at 4.60 cents. Falgold, Hwange and Riozim all main- tained previous trading levels. ― BH24 Reporter • 11 ZSE REVIEW Equities maintain negative run
  13. 13. Government, through the indigenisa- tion and empowerment laws, made a call to foreign owned companies to empower their employees through Employee Share Ownership Trusts. The ESOTs are envisioned in the Indi- genisation and Economic Empower- ment (General) Regulations of 2010. Many of the companies have complied and ceded the requisite 10 percent to their employees in a move that is supposed to see workers reaping the benefits of the empowerment drive. Big mining companies such as Zim- babwe Platinum Holdings, Mimosa and Anglo Platinum launched their employee share schemes alongside community share ownership schemes while corporates like Meikles, Old Mutual, Delta Beverages and BAT Zimbabwe also launched theirs. Basically, an employee share owner- ship scheme is a contribution plan that provides a company’s workers with an ownership interest in the company. Under such schemes, companies provide their employees with stock ownership, typically at no cost to the employees. The model of Zimbabwe’s indigenisa- tion law places prominence on wealth creation through broad-based par- ticipation of the indigenous people in economic activity. But since the launch of these ESOTs (and some of the CSOTs), we have noticed little to no change in the liveli- hoods of the people targeted by such drives. What has happened is that the schemes have become mere decora- tions; a means to avoid punishment from a Government that expects the companies to contribute to communi- ties and employees livelihoods. Senators today heard that the Meikles ESOT is yet to take effect because there is no money to pay for the shares. Although Meikles promised to help its employees to buy the 10 percent stake, the condition was only after Government has paid back more than $80 million owed to the company by the RBZ. So this means if the Government does not have the capacity to pay Meikles, the employees suffer. It basically means they are holding Government ransom! And workers whose pension money was taken to pay for part of the stake will lose out on both the ESOT and their pension if they retire before Gov- ernment pays its debt. That management has also denied the employees the chance to pay for their own shares means they just want to have something to hold over them or they just want to keep hold of those shares. Unless they are paid for, they belong to Meikles not the employees. These big companies have a com- munity as well as employees for so long and they are getting away with it because there have been loopholes in the manner in which the programme was carried out. So Government should do a few things to correct this problem. First, Government should close off all those loopholes being manipulated by companies so that they do not have a choice but contribute to the welfare of employees and communities. Then it should go back to the draw- ing board and make the provisions for ESOTs and CSOTs clear. Government should also make time frames for the operationalisation of the schemes clear so that companies comply with these provisions on time. Or else it will take decades for the schemes to start benefitting the employees. Last, Government should ensure that all companies that launched ESOTs and CSOTs are making good their promise. We are tired of empty promises, promises made to make the powers that be happy but not followed up with action. It’s time we see some action! Employ- ees should receive their benefits for working for that company before they die. After all, their children might not even benefit once they are gone. • 13 BH24 COMMENT ESOTs should make a difference in workers' lives
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  15. 15. Ford Motor Corporation announced 17 new vehicles for Sub-Saharan Africa on Thursday, as carmakers jostle for posi- tions in one of the last major markets where potential growth remains largely untapped. The models, among 25 to be intro- duced by 2016 in a broader product offensive across the Middle East and Africa, draw on the US auto giant's global vehicle architectures to offer more up-to-date features for markets such as South Africa. "Middle East and Africa is the final frontier for global automotive growth," Ford's regional chief Jim Benintende said. "We're put- ting the infrastructure and people in place to participate." Western carmakers are showing renewed interest in Africa, in some cases reviving previously abandoned manufacturing sites or considering new ones. Chinese brands are also a growing presence on the streets of cities such as Nairobi and Lagos. On Wednesday, PSA Peugeot Citroen announced the gradual resumption of car assembly in Nigeria, Africa's most populous country, and said it may soon add a second and third model there. Total vehicle sales across the Middle East and Africa region are expected to grow 40 percent by the end of the dec- ade, according to Ford's projections. The planned model roll-out includes updated versions of the Focus compact and Fusion large car, escorted by Ford's resurrected Mustang sports car. They bring a step up in fuel economy, touch- screen connectivity and other features intended to hone Ford's competitive- ness against more spartan rivals in African markets. At the start of this year, Ford created its Middle East & Africa business unit in a region that includes 67 countries, part of which until this year reported to Ford's Europe operations, part to North America and part to Asia-Pacific. Ford sold about 200,000 autos in the Mid- dle East and Africa in 2013, including a sales increase of 40 percent in South Africa to 64,500 vehicles, its top mar- ket in the region. Its second-biggest market in the region is Saudi Arabia, where it sold 54,000 vehicles last year. IHS Automotive consultancy said Ford was fifth in South African auto sales last year with a 9 percent market share and sixth in Saudi Arabia with a 4 percent market share. But Ford's long-established South African manu- facturing base may yet be undermined by industrial unrest. Ford was forced to halt one of its two plants in the country this week as a wave of strikes that had crippled the mining sector and broader economyspreadtoautosuppliers,with workers seeking pay increases of 12 percent to 15 percent. The stoppages have also hit General Motors, Toyota, and Mercedes-Benz and may soon affect BMW and Nissan unless resolved swiftly. Ford regional chief Benintende has sought to play down suggestions that unrest could ultimately force the Dearborn, Mich- igan-based automaker to move pro- duction elsewhere. ― Reuters • 15 REGIONAL News Ford unveils new models for Africa as it eyes big untapped market
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  17. 17. 17 DIARY OF EVENTS The black arrow indicate level of load shedding across the country. POWER GENERATION STATS Gen Station 14 July 2014 Energy (Megawatts) Hwange 421 MW Kariba 750 MW Harare 45 MW Munyati 29 MW Bulawayo 0 MW Imports 0 MW Total 1245 MW 23 -25 July - Mine Entra, Place: Zimbabwe Inter- national Exhibition Centre, Bulawayo 24 July - OK Zimbabwe Thirteenth Annual Gen- eral Meeting Place: OKMart Functions Room, First Floor, OKMart, 30 Chiremba Road, Hillside, Time: 15:00 hours. 1 August - Sixteenth Annual General Meeting of the members of Econet Wireless Zimbabwe Limited, Place: Econet Park, 2 Old Mutare Road, Msasa, Harare, Time; 10.00am THE BH24 DIARY
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  19. 19. 19 zse ZSE Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc Colcom 12.10% 25.00 Lafarge -12.69% 55.00 Zimplow 7.50% 8.60 Hippo -12.50% 70.00 OK Zim 5.88% 18.00 Pearl -11.86% 2.60 Mash 4.34% 2.40 ZPI -10.52% 0.85 BNC 2.22% 4.60 Zimpapers -10.00% 0.72 Econet 0.67% 74.50 AFDIS -8.57% 32.00 Truworths 0.33% 3.00 TSL -7.69% 24.00 Old Mutual 0.03% 257.60 Fidelity -5.88% 8.00 Indices Index Previous Today Move Change Industrial 186.08 185.49 -0.59 points -0.32% Mining 56.12 57.02 +0.90 points +1.60% Stocks Exchange
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  21. 21. 21 AFRICA StockS Botswana 8,664.65 -11.96 -0.14% 12July Cote dIvoire 246.37 +2.18 +0.89% 07Mar Egypt 7,949.60 -75.68 -0.94% 06Mar Ghana 2,357.65 -12.86 -0.54% 15July Kenya 4,889.99 -12.31 -0.25% 15July Malawi 12,662.47 +0.00 +0.00% 07Mar Mauritius 2,074.51 -3.51 -0.17% 07Mar Morocco 9,544.10 +21.01 +0.22% 07Mar Nigeria 43,030.27 +58.71 +0.14% 16July Rwanda 131.27 +0.00 +0.00% 24Oct Tanzania 2,018.97 +25.40 +1.27% 07Mar Tunisia 4,624.39 -39.32 -0.84% 07Mar Uganda 1,503.90 +0.81 +0.05% 10Sep Zambia 4,242.74 +14.95 +0.35% 10April Zimbabwe 186.08 -0.04 -0.02% 16July African stock round up Commodity Prices Name Price Crude Oil 1,300.91 -0.21% Spot Gold USD/oz 1,292.63 -0.26% Spot Silver USD/oz 19.38 -0.46% Spot Platinum USD/oz 1,421.25 -0.33% Spot Palladium USD/oz 798.50 -0.64% LME Copper USD/t 6,770 -0.18% LME Aluminium USD/t 1,780 -1.17% LME Nickel USD/t 18,230 -1.73% LME Lead USD/t 2,095 -1.41% Quote of the day — "In life, as in a football game, the prin- ciple to follow is: Hit the line hard." - Theodore Roosevelt Globalshareholder.com
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  23. 23. Gold extended an advance from a three-week low amid signs of increased demand in China and India, the world’s two largest consumers. Palladium climbed to the highest level since 2001. Bullion for immediate delivery rose as much as 0.7 percent to $1,308.31 an ounce and traded at $1,305.34 at 3:25 p.m. in Singapore, according to Bloomberg generic pricing. The metal fell to $1,292.26 on July 15, the lowest level since June 19 as inves- tors assessed prospects for higher U.S. interest rates. Palladium climbed 0.9 percent after the U.S. and Europe increased sanctions on Russia, the biggest producer. Gold imports by India jumped 65 per- cent to $3.12 billion in June from $1.89 billion a year earlier, after the central bank allowed more banks and traders to buy bullion overseas, the Commerce Ministry said yesterday. In China, which surpassed India last year as the biggest consumer, volumes for the benchmark spot contract in Shanghai rose for a second day yes- terday to a one-week high of 13,421 kilograms. “The drop below $1,300 has gener- ated some buying interest, especially from physical users,” said Zhu Siquan, an analyst at GF Futures Co. in Guang- zhou, China. “Gold continues to take cues from the Federal Reserve and U.S. economic data.” Fed Chair Janet Yellen said yesterday that while she’s optimistic about the economy, accommodation is necessary. U.S. data today may show improve- ments in the housing market after a report yesterday showed industrial pro- duction climbed in June. SPDR Holdings Gold sank the most in more than three decades in 2013 amid expectations the Fed will reduce stimulus as the U.S economy recovers. Prices rebounded 8.6 percent this year, in part as U.S. policy makers pledged to keep interest rates low. Gold for August delivery added 0.5 percent to $1,305.60 an ounce on the Comex. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange traded product, fell to 806.03 metric tons yesterday, the first decline in a week. Palladiumforimmediatedeliveryroseto $881.50 an ounce. The Obama admin- istration, acting in concert with the European Union, imposed sanctions on Russian banks, energy companies and defense firms yesterday in a bid to pun- ish it over Ukraine. The metal, used in pollution-control devices for cars, has advanced 23 per- cent this year after a five-month mine strike reduced production in South Africa, the second-biggest producer, amid rising global auto sales. Spot platinum increased 0.6 percent to $1,493.75 an ounce. Silver added 0.3 percent to $20.8260 an ounce. ― Bloomberg • 23 INTERNATIONAL NEWS Gold rises from three-week low as palladium reaches 13-year high
  24. 24. By Nigel Gambanga There are more people signing up for mobile connections but fewer calls are being made by these same subscrib- ers. This fact has been expressed by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ)'s Sector Performance Report for the first quarter of 2014. The report has provided a snapshot perspective on the state of telecoms in Zimbabwe, with a notable decline in mobile traffic being registered in the first quarter of the year. While the number of subscribers has gone up by 1,9 percent the data in the report shows a 20,7 percent decline in total mobile traffic from 2,4 billion minutes in the last quarter of 2013 to 1,9 billion minutes in the first quarter of 2014. Ironically the largest decline in mobile traffic was noted in net-on-net traffic, this is despite the string of on-net call promotions from operators such as the bundles promotions from Econet and Telecel as well as NetOne's dollar a day feast. An obvious trend regarding traffic has been the decline of international traffic, which is attributable to the proliferation of alternatives for communication such as WhatsApp and VoIP solutions like Skype and Viber. Inversely Internet subscriptions are up by 2,9 percent with 98 percent of total internet connections being noted through mobile data. This should trig- ger a greater focus on data solutions from the MNOs, something that has already started with OTT services for Facebook and WhatsApp. Traffic between mobile operators and VoIP operators has increased, with incoming calls from VoIP up 20,6 per- cent and outgoing calls up by 1,6 per- cent. According to the report, this is a result of interconnection agreements between IAPs and MNOs. Hopefully these agreements stretch into fair pricing policies which could be an issue judging from how the three MNOs are offering voice call discounts that encroach into the VoIP operators' pricing models. The declining trend in mobile traffic is attributable to inter- twined factors actually. These include a tougher challenge on the average subscriber’s disposable income, the emergence of alternatives such as Instant Messaging (WhatsApp is the biggest culprit/subscriber's sav- iour here) and a greater awareness of the possibilities presented by broad- band. The era of data is definitely upon us judging from the facts on the ground. In a not-so-friendly economic environ- ment the average subscriber will spend less on voice calls, particularly when such communication can be substi- tuted by cheap alternatives. It's even more convenient when these alternatives are offered through affordable bundles. ― TechZim • 24 Analysis POTRAZ Q1 Report shows significant mobile traffic decline