DRC's licence relook has a long-term silver lining
Thématique :
congo RDC
Business Report, November 7, 2007
Mining stocks made up ground yesterday after taking a knock on Monday on news from Reuters about the preliminary report. The final version of the report was due to be handed to the central African nation's ministry of mines yesterday.
There is precedent for newly elected governments to renegotiate contracts that may have been awarded under questionable circumstances. The Bolivian government did so with oil contracts last year, while South Africa embarked on a conversion process to new-order mining rights.
So local firms affected by the DRC review, such as AngloGold Ashanti, BHP Billiton, De Beers, Metorex, Teal and Metmar, are not unfamiliar with the process.
Of the local companies whose licences are under review, it's the smaller firms that are likely to be the most worried.
The initial report, while apparently critical of mining majors like AngloGold Ashanti and BHP Billiton for irregularities in negotiating contracts, recommends they be renegotiated rather than rescinded.
Of course, it's unlikely that multinationals that have long had a presence in the DRC and made major infrastructural investments would now be booted out.
It's worthwhile to remember that the commission's findings have yet to be submitted to the DRC cabinet for review by the presidency - and anything can happen between now and then.While it has caused some short-term unease, the review - once completed - is likely to boost certainty over mining rights in the DRC in the medium to long term, and could even act as a catalyst for further investment.
It's a welcome change from the political instability that characterised the former Belgian colony during the six-year war that ended only in 2003.
Personal income
While 6.6 million Gautengers earn R485 billion annually, almost the same number of KwaZulu-Natal residents earn only R231 billion. This gives an idea of the Gautengers' spending clout.
At an average of more than R73 000 each, Gautengers' personal income is far higher than that of their KwaZulu-Natal counterparts, who get less than R38 000. Only in the Western Cape, where people earn a little more than R69 000 on average, is spending power close to that in Gauteng.
The information comes from an analysis by the University of SA's Bureau of Market Research (BMR) of surveys of income and spending conducted by it and Statistics SA.
The BMR, which also tracks spending patterns, found Gauteng households are consuming an estimated R82.6 billion worth of food this year, nearly a third of the national total of R270 billion. Gauteng also spends more than a third of the national total on housing and electricity - R77 billion of R205 billion - and on education - R15.9 billion of R42.9 billion. The pattern is similar for non-essentials.
The BMR says Gauteng households will spend R11.8 billion on alcoholic beverages this year, nearly one-third of the national total of R34.5 billion. And their bill for cigarettes and tobacco is R5.6 billion, out of a national total of R16.8 billion.
Mining stocks made up ground yesterday after taking a knock on Monday on news from Reuters about the preliminary report. The final version of the report was due to be handed to the central African nation's ministry of mines yesterday.
There is precedent for newly elected governments to renegotiate contracts that may have been awarded under questionable circumstances. The Bolivian government did so with oil contracts last year, while South Africa embarked on a conversion process to new-order mining rights.
So local firms affected by the DRC review, such as AngloGold Ashanti, BHP Billiton, De Beers, Metorex, Teal and Metmar, are not unfamiliar with the process.
Of the local companies whose licences are under review, it's the smaller firms that are likely to be the most worried.
The initial report, while apparently critical of mining majors like AngloGold Ashanti and BHP Billiton for irregularities in negotiating contracts, recommends they be renegotiated rather than rescinded.
Of course, it's unlikely that multinationals that have long had a presence in the DRC and made major infrastructural investments would now be booted out.
It's worthwhile to remember that the commission's findings have yet to be submitted to the DRC cabinet for review by the presidency - and anything can happen between now and then.While it has caused some short-term unease, the review - once completed - is likely to boost certainty over mining rights in the DRC in the medium to long term, and could even act as a catalyst for further investment.
It's a welcome change from the political instability that characterised the former Belgian colony during the six-year war that ended only in 2003.
Personal income
While 6.6 million Gautengers earn R485 billion annually, almost the same number of KwaZulu-Natal residents earn only R231 billion. This gives an idea of the Gautengers' spending clout.
At an average of more than R73 000 each, Gautengers' personal income is far higher than that of their KwaZulu-Natal counterparts, who get less than R38 000. Only in the Western Cape, where people earn a little more than R69 000 on average, is spending power close to that in Gauteng.
The information comes from an analysis by the University of SA's Bureau of Market Research (BMR) of surveys of income and spending conducted by it and Statistics SA.
The BMR, which also tracks spending patterns, found Gauteng households are consuming an estimated R82.6 billion worth of food this year, nearly a third of the national total of R270 billion. Gauteng also spends more than a third of the national total on housing and electricity - R77 billion of R205 billion - and on education - R15.9 billion of R42.9 billion. The pattern is similar for non-essentials.
The BMR says Gauteng households will spend R11.8 billion on alcoholic beverages this year, nearly one-third of the national total of R34.5 billion. And their bill for cigarettes and tobacco is R5.6 billion, out of a national total of R16.8 billion.
