By Tawanda Musarurwa

HARARE – Japanese mining companies are now likely to boost their investments into the Zimbabwean mining sector following the entrance of the Japan Oil, Gas and Metals National Corporation (JOGMEC), the ambassador of Japan to Zimbabwe Mr Yoshinobu Hiraishi has said.

Among other key roles, JOG-MEC provides financial and technical support to explo-ration and development pro-jects carried out by Japanese companies

The Government and JOGMEC last year signed a Memoran-dum of Understanding that allowed for the transfer of

state-of-the-art GIS tech-niques and remote sensing know-how to local geologists.

Ambassador Hiraishi said the involvement of JOGMEC in Zimbabwe could see Japa-nese mining firms increasing

their investments into the country.

“JOGMEC works as an advisor

News Update as @ 1530 hours, Thursday 03 March 2016

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Japanese mining firms to boost investments into Zim

Mr Yoshinobu Hiraishi

for Japanese mining compa-nies with a view to securing their safe and stable activ-ities in the mining sector abroad. When necessary, JOGMEC becomes a pioneer of Japanese mining compa-nies so as to pave way for those companies to follow,” said the ambassador.

“The active involvement of JOGMEC in the mining sector of Zimbabwe will hopefully, attract Japanese companies’ attention which may lead to investment in Zimbabwe’s mining sector by Japanese mining companies in the future.”

He was speaking at a ‘Sus-tainable Development of Min-eral Resources for the Mining Sector in Zimbabwe’ seminar where JOGMEC officials were sharing their technologies and experiences on mining exploration and environ-mental conservation with delegates from the Ministry of Mines and Mining Devel-opment.

Zimbabwean geologists from the Geological Survey Department are currently receiving training at the JOGMEC Geologic Remote Sensing Centre in Botswana.

“I firmly believe that the Japanese accumulated experiences and vast tech-nical know-how in mining can greatly contribute to the sustainable and environmen-tally-friendly exploitation of Zimbabwe’s abundant min-eral resources in the future,” said ambassador Hiraishi.

Zimbabwe is currently final-izing the transformation of the Minerals Marketing

Corporation of Zimbabwe (MMCZ) into an exploration company - the Mineral Explo-ration and Promotion Corpo-ration (MEPC).

The MEPC will have the important mandate of ascer-taining the value of the country's unproven mineral deposits that have remained unknown for decades due to fragmented exploration by the private sector.

Although Zimbabwe is a min-eral-rich country, believed to be endowed with more than 60 different types of miner-als, the country’s resources are largely under-explored.●

2 NEws

BH243

BH24 Reporter

HARARE – The National Social Security Authority Board has begun the hunt for a new chief executive to replace James Matiza who was fired alongside four other directors in October last year.

Former BancABC Zimbabwe group managing director Hashmon Matemera has been interim general manager since then.

The new chief executive is expected to be appointed by

the end of this month since Mr Matemera’s tenure does not extend beyond March 31 according to a statement that was issued by NSSA last year.

“Mr Matemera is not a candidate for the substan-tive position and his acting appointment will not extend beyond the latest date of 31 March 2016 under any cir-

cumstances,” said NSSA in a statement.

The board is also seeking to fil l three other posts of chief operating/finance officer, chief investment officer and chief property officer.

Yesterday NSSA together with leading global executive search and selection con-sultancy firm Stanton and Chase and Proserve flighted adverts for the four posts.

The deadline for the submis-sion of application is March 4.●

4 NEws

NSSA Board on the hunt for a new chief executive

BH245

By Thupeyo Muleya

BEITBRIDGE - The implemen-tation of new pre-shipment reg-ulations under the Consignment Based Conformity Assessment (CBCA) programme on Tues-day faced a host of challenges resulting in delays in the pro-cessing of cargo at Beitbridge border post.

The new regulations which were gazetted into law on December 18 last year and requires that goods be tested for conformity with required standards prior importation into Zimbabwe went into operation on 1 March.

Government introduced the pro-gramme with the view to reduce hazardous and substandard imported products and improve customs duty collection.

Bureau Veritas has been appointed by the Ministry of Industry and Commerce of Zim-babwe to verify and the assess the conformity of goods being imported into the countries.

The new developments have seen cargo piling up on the South African side of the border with most importers failing to produce the required transi-tional certificate of conformity.

Shipping and Forwarding Agents Association of Zimba-bwe (SFAAZ) chief executive Mr Joseph Musariri said Govern-ment needs to waive the appli-cation of the CBCA on goods which were shipped before it became operational.

“You will note that the Zimba-bwe Revenue Authority (Zimra) has failed to enforce the regu-lations since 18 December last year only to try and imple-ment it this week and that has resulted in a chaotic situation.

“It is sad that cargo is piling up at Beitbridge border post where most importers are hav-ing challenges in acquiring the transitional CBCA certificates” he said.

Mr Musariri said the Govern-

ment introduced the idea on July 27 last year but could not implement it since there was no legislation to that effect.

He said under the new dispen-sation all products regulated by the Ministry of Industry and Commerce of Zimbabwe imported into Zimbabwe must be accompanied by a CBCA certificate.

“The categories of goods reg-ulated under the programme include food and agriculture, building and civil engineering, petroleum & fuels , packaging material, electrical/electronic products, body care, automotive and transportation , clothing and textile and toys” he said.

Mr Musariri said Zimra was now refusing to clear goods with-out the CBCA certificate and requesting for the conformity certificates.

“They are telling those import-ers to contact the nearest offices of Bureau Veritas for

inspections and issuance of the requisite certificates. Locally destined cargo which is being shipped from various overseas markets is the worst affected and importers are incurring daily demurrage expenses of between $250 and $5000.

“In some cases duties had been paid to Zimra but now they are singing a different song,” he said. Bureau Veritas liaison officer for Zimbabwe, Mr Tendai Malunga said his organisation was ready for the implementa-tion of the CBCA programme.

“We have trained various stakeholders on the new pro-gramme and are ready to roll. Furthermore we have hired more staff in most countries to conduct inspections and various conformity tests on the various countries exporting goods to Zimbabwe” he said.

Industry and Commerce Min-ister Mike Bimha could not be reached for comment yester-day.●

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Cargo piles at border as new pre-shipment regulations take effect

BH247

HARARE –The Rural Electrifi-cation Agency (REA) has set a target for all public institutions in the countryside to have access to some form of energy by 2018 as it spearheads gov-ernment efforts to spread devel-opment equitably throughout the country.

REA public relations officer Johannes Nyamayedenga said rural electrification has brought remarkable development to the countryside, improving learn-ing conditions in government schools, working conditions for civil servants as well as conven-ient domestic use for villagers.

“Our target is that by 2018 all public institutions must have electricity one way or the other, although this depends with the availability of funds so we need more funding,” he said.

“By 2030 the whole country must have access to energy.”

Mr Nyamayedenga said REA had electrified 428 rural institutions

countrywide last year through the national grid, solar systems and biogas energy.

At least 82 of the electrified institutions were in Manicaland, while Mashonaland East had 72, Midlands 58, Matabeleland North 53, Mashonaland West 44, Matabeleland South 43, Masvingo 42 and Mashonaland Central 34.

Since its establishment in 2002, REA has electrified at least 8 300 public institutions in the rural areas and these include schools, health centers, government offices, business centers and chiefs’ homes.

Manicaland has the highest number with 1548 electri-fied institutions followed by Mashonaland East with 1 186, Masvingo 1 109, Mashonaland West 1 75, Mashonaland Central 1071, Mashonaland West 1075, Midlands 867, Matabeleland South 810 and Matabeleland North 719.

REA is playing a significant part in complimenting the Schools Computerization Program that President Robert Mugabe has been spearheading over the years through providing electric-ity in schools.

“It has improved quality of edu-cation with access to computers and the internet to an extent that advantages enjoyed by chil-dren in urban schools can also be enjoyed by school children in rural areas.

“In business centres huge entrepreneurship is taking place like welding, modern carpentry and garment making, thus contributing to the Gross Domestic Product,” Ambassador Nyamayedenga said

“As for workers in rural health centres and teachers they now enjoy better working conditions with the existence of electricity.”

In addition, REA is assisting pub-lic institutions like hospitals and schools to use biogas for cooking

and lighting following revelations that these institutions faced problems with the Environmental Management Agency (EMA) over disposal of waste.

Since it started the Biogas Digester Program in 2012, the REA has installed 38 biogas digesters countrywide in schools, hospitals and domestic house-holds with 18 of these installed in rural boarding schools and mission hospitals.Since its establishment, the agency has installed at least 425 solar mini grid systems countrywide and since solar is not powerful to light a whole hospital or school, the REA expects to install grid electricity in these areas soon.

The Zimbabwe government established the REA in 2002 in order to speed up development in rural areas which previ-ous colonial governments had neglected as well as to stem migration of people from those areas to towns and cities. New Ziana●

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REA targets 2018 for all public institutions to access some form of energy

BH249

HARARE - The local bourse extended yesterday’s losses as the mainstream industrial index dropped a further 0.12 to close at 98.82.

Giant cigarette manufac-turer BAT lost $0,0462 to trade at $11,0000, while Hippo traded $0,0095 lower at $0,3395 and Barclays dropped $0,0010 to close at $0,03200.

Four counters traded in the positive territory. Stara-fricacorporation gained $0,0013 to settle at $0,0093 and conglomerate Inns-cor inched up $0,0008 to $0,1808.

Telecoms giant Econet was up $0,0004 to close at $0,2260 and retailer OK Zim added $0,003 to trade at $0,0353.

The mining index was flat at 19.14 as Bindura, Fal-gold, Hwange and RioZim maintained previous price levels at $0,0095, $0,0050,

$0,0300 and $0,1040 respectively.

- BH24 Reporter ●

ZSE10

Equities extend losses

BH2411

MovERs CHANGE ToDAy PRICE UsC sHAKERs CHANGE ToDAy PRICE UsC

Starafrica 16.25 0.93 BARCLAYS -3.03 3.20

OK ZIM 0.85 3.53 HIPPO -2.72 33.95

INNSCOR 0.44 18.08 BAT -0.41 1,100.00

ECONET 0.17 22.60

INDEx PREvIoUs ToDAy MovE CHANGE

INDUSTRIAL 98.94 98.82 -0.12 points -0.12%

MINING 19.14 19.14 +0.00 POINTS +0.00%

12 ZSE tABlES

ZSE

INDICEs

Stock Exchange

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13 DIARy oF EvENTs

The black arrow indicate level of load shedding across the country.

PowER GENERATIoN sTATs

Gen Station

03 March 2016

Energy

(Megawatts)

Hwange 270 MW

Kariba 460 MW

Harare 30 MW

Munyati 30 MW

Bulawayo 10 MW

Imports 0 - 500 MW

Total 1145 Mw

•thursday 24 March 2016 - Annual General Meeting of Willdale limited; Place: Boardroom, Willdale Administration Block, 19.5km peg lomagundi Road, Mount Hampden; time: 1100 hours...

THE BH24 DIARy

JoHANNEsBURG - South Africa's rand was steady against the dollar early on Thursday as risk appetite subsided and traders awaited US employment data on Fri-day that is expected to give guidance on interest rates move.

At 0645 GMT, the rand traded at 15,5600 versus the dollar, largely unchanged from Wednesday's New York close of 15,5580.

Upbeat US economic data and a rally in a range of commodities dampened risk appetites globally, while traders were cautious ahead of US unemployment num-bers on Friday.

"Tomorrow’s data is going to provide a lot of insight into the Federal Reserve’s next move, in conjunction with the US CPI data that is," Standard Bank trader War-rick Butler said.

Growth in US employment would strengthen the case for the Federal Reserve to up the tempo on its heighten-

ing cycle, which traditionally has triggered an outflow of investments from emerging markets.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange's Top-40 futures index up 0,62 percent.

Shares in South Africa's MTN Group were likely to react

to news that it has set aside around $600 million to cover the potential settlement of a fine in Nigeria as it posted a more than 50 percent drop in annual profit.

In fixed income, the yield for the benchmark instrument due in 2026 was down 2.5 basis points to 9,33 percent- Reuters●

REGioNAl NEWS 14

Rand steady, stocks set to open higher

JoHANNEsBURG - South Africa's MTN Group has set aside around $600 million to cover the potential settle-ment of a fine in Nigeria, it said on Thursday, as it posted a more than 50 percent drop in annual profit.

Africa's biggest wireless phone company is in talks with Nigerian authorities to reduce a $3,9 billion fine imposed last year for failing to cut off unregistered SIM card users.

MTN said headline earn-ings per share (EPS) came in at 746 cents in the year to end-December compared with 1,536 cents a year ear-lier. Headline EPS is the main profit measure in South Africa that strips out certain one-off items.

The company raised its annual dividend by 5,2 percent to 1,310 cents per share- Reu-ters●

MTN sets aside $600m for Nige-ria fine, FY profit

drops

Standard Bank Group Ltd., Africa’s largest lender by assets, said full-year profit climbed 34 percent after boosting net interest income and reducing its stake in its loss-making U.K. business.

Normalized net income climbed to 21,37 bill ion rand ($1,37 bill ion) from 15,93 bill ion rand a year earlier, the Johannesburg-based bank said in a statement on Thursday. Earnings per share excluding one-time items increased 27 percent to 13,59 rand, beating the 13,19 rand median estimate of 13 analysts surveyed by Bloomberg. The dividend rose 13 percent to 6,74 rand.

The bank completed the sale of a 60 percent stake in its UK operations to Industrial and Commercial Bank of China Ltd. last year, help-ing boost profit and also partially exited its London business which was making losses. Standard Bank is focused on tapping growth across Africa and has opera-tions in 20 countries on the continent, some of which are

expanding faster than those in South Africa where the economy is slowing.

“The year ahead is likely to provide a demanding oper-ating environment in which consumers and businesses will have to adapt to higher

interest rates and the full effect of currency weakness,” the bank said in the state-ment. “Our medium-term return on equity target of between 15 percent and 18 percent remains intact. The group’s return on equity performance will, however,

be affected by factors such as economic growth in South Africa and the rest of Africa, and the retention of a South African investment grade sovereign credit rating.”

.-Bloomberg●

iNtERNAtioNAl NEWS 15

Standard Bank full-year profit rises 34 pc after UK disposal

By Nawar Alsaadi

Continued from yesterday . . . thus yet again contributing to the oversupply. The sizable increase in Iraqi, Saudi and Iranian oil exports to the market in 2015 and 2016 has created (unintentionally or intentionally) the reverse of the OPEC price manipulation episode from 1979 to 1985. This time oil prices are being forced lower by a geopolit-ical oil supply increase that has little to do with market supply and demand fundamentals; just as OPEC aggressively withdraw-ing oil supply from the market in 1979 to 1985 had nothing to do with supply and demand funda-mentals.

what now?

The surge in shale oil production between 2010 and 2014 was the trigger to this oil crisis, and thus a reduction in non-OPEC supply through a reduction in shale/global oil capex is a proper response to shale’s oversupply. This is how free markets balance themselves.

However, the arrival of the above

mentioned geopolitical oil has interfered with the natural bal-ancing mechanism. As oil prices overshot to the downside (and stayed low) due to the arrival of the geopolitically constrained non-market sensitive oil, the O&G industry has been forced to under invest in future oil supply as cash flows dried up and financing costs skyrocketed. The extent of under investment in shale has even been more severe with capex cuts averaging double the global average.

The substantial capex-to-supply lag for most of non-OPEC oil and OPEC’s unwillingness to restrict production or gradually ease back the increase in geopolitical sup-plies has forced an undue burden on shale/tight oil to balance the market on its own. Yet the shale balancing mechanism is far from perfect, shale while relatively fast moving in comparison to other sources of supply, is still a much less efficient balancing tool in comparison to OPEC. This in turn means the market is lacking the proper tools to balance itself in a timely manner in order to avoid a supply crisis down the line, as

the ongoing large capex cuts flow to all non-OPEC supply (as well as some OPEC supply) through higher decline rates, and deferred or cancelled greenfield supply projects.

This delayed rebalancing caused a large build up in global inven-tories; those excess inventories could act as a shock absorber of sorts once supply undershoots, but it remains unclear whether excess inventories alone or in combination with OPEC will be able to compensate for an eventual dual collapse of both shale and non-OPEC supply in the context of sustained demand growth.

Conclusion

This oil boom-bust cycle is not a repeat of the 1980s, however the arrival of shale oil to the global oil scene has created a new oil pricing reality.

Nonetheless, it is highly unlikely that this new oil reality is anywhere close to $30 or $40 a barrel as the futures curve is indicating and many forecasters are forecasting.

Outside of Iran and Libya, OPEC is producing close to its maxi-mum capacity, with little prospect of a sizable increase in supply over the next several years. In essence, OPEC alone is not in a position to compensate for shale and non-OPEC declines as well as meet future demand growth. Yet, for shale and non-OPEC to assist OPEC and grow a price in the $60 to $70 range is most likely required to incent the develop-ment of marginal oil reserves.

By 2017 as global demand and supply come into balance, and inventories start to draw oil prices may snap back substan-tially above the $60-$70 price range as the market transitions from a flood to a drought at some point next year, however once the next price spike period settles down as shale production catches up to demand once again, prices will likely settle in the $60 to $70 range long term, and remain there until the next noticeable change in demand/supply fun-damentals or until the arrival of unforeseen geopolitical events. – Oilprice.com - oilprice.com●

16 analysis16 ANAlYSiS

Why oil booms and busts happen