MBendi Newsletter - 28.Nov.2008

In our last newsletter, we commented on the energy implications of the International Energy Agency's World Energy Outlook 2008. The outlook also had much to say about the likely environmental impact of their reference scenario, so I dug through our Signposts for the past three months to see what new evidence there is for climate change. Here's a summary of what I found.

First some new forecasts to set the scene. Ice sheets on Antarctica and Greenland would raise world sea levels by about 70 meters if they melted completely. Fortunately, the UN Climate Panel projects that sea levels will only rise by between 18 and 59 cm this century. Scientists in Japan forecast that peatlands, concentrated in high latitude locations including Canada, Russia and Alaska, could experience a 40% carbon loss from shallow peat and 86% carbon loss from deep peat with a warming of four degrees C.

The IEA reference scenario forecasts that world greenhouse gas emissions, including non-energy CO2 and all other gases, will grow 35% between 2005 and 2030, leading to a doubling in the concentration of those gases in the atmosphere by the end of this century and an eventual global average temperature increase of up to 6°C on today. Separately, the Scripps Institution of Oceanography warned that the earth will warm about 2.4° C above pre-industrial levels even under extremely conservative greenhouse-gas emission scenarios and under the assumption that efforts to clean up particulate pollution continue to be successful.

So, where are we right now? Starting with the atmosphere above us, the UN Climate Change Secretariat reported that emissions by 40 industrialized nations dropped 0.1% from 2005 to 2006 driven by a fall in U.S. emissions. However, 2006 emissions of 18.0 billion tonnes of carbon dioxide were still 2.3% up from 17.6 billion in 2000 and only 4.7% down from 1990 levels of 18.9 billion tonnes. Most of this drop is due to the 1991 collapse of the Soviet Union, whose emissions have risen 7.4% to 3.7 billion tonnes just since 2000.

The Global Carbon Project reported anthropogenic CO2 emissions have been growing about four times faster since 2000 than during the previous decade. Worldwide man-made emissions of CO2 increased 3% in 2007. The annual mean growth rate of atmospheric CO2 was 2.2 ppm per year in 2007, above the 2.0 ppm average for the period 2000-2007 and 50% above the average annual mean growth rate for the previous 20 years of 1.5 ppm. Atmospheric CO2 concentration was 383 ppm in 2007, 37% above the concentration at the start of the industrial revolution and the highest during the last 650,000 years and probably during the last 20 million years. Natural land and ocean CO2 sinks removed 54% of all CO2 emitted from human activities during the period 2000-2007.

In 2006, China passed the USA, still the leader in emissions per-capita, to become the largest CO2 emitter, and India will soon overtake Russia to become the third largest emitter. More than half of the global emissions come from less developed countries. However, developing countries with 80% of the world's population still account for only 20% of the cumulative emissions since 1751; the poorest countries in the world, with 800 million people, have contributed less than 1% of these cumulative emissions. Japan reported 2007 emissions were at record levels due to closure of a nuclear power plant.

An MIT report in Geophysical Research Letters indicated that levels of methane, a greenhouse gas 25 times as potent as carbon dioxide, rose abruptly in Earth's atmosphere in 2007. Methane has more than doubled in the atmosphere since pre-industrial times, but stayed largely stable over the last decade or so before rising in 2007 simultaneously at all the places scientists measured around the globe.

Moving from the air to the oceans, an Australian study showed rising carbon dioxide levels in the world's oceans due to climate change, combined with rising sea temperatures, could accelerate coral bleaching, destroying some reefs before 2050. Scientists reported that the number of polluted "dead zones" areas of oxygen-starved water in the world's oceans is growing at about 5% per annum and coastal fish stocks are more vulnerable to collapse than previously feared. According to the Mediterranean Institute for Advanced Studies in Spain marine organisms are more vulnerable to low oxygen content than currently recognized, with fish and crustaceans being the most vulnerable.

The Center for Australian Weather and Climate Research reported in Nature Geoscience that the Southern Ocean, the world's largest carbon sink, has maintained its ability to soak up excess carbon despite changes to currents and wind speeds. The ocean was becoming warmer and less saline. Currents had not changed in strength, though they had shifted closer to Antarctica. CO2 is absorbed by the ocean's turbulent surface layer and then carried to the depths by circulation patterns. It is also absorbed by phytoplankton and other organisms, which fall to the ocean bottom when they die. Some of the carbon-rich water from the depths rises near Antarctica, releasing CO2, while further away from the continent, it sinks again because it is less dense. Overall the ocean absorbs much more than it releases.

Scientists calculated temperatures had risen about 2 Celsius in the past 40 years in the Arctic and by a few tenths of a degree in Antarctica, where some winter sea ice has even expanded in recent decades. The University of Colorado's National Snow and Ice Data Center reported that Arctic sea ice melted to its second-lowest level in the summer of 2008, 34% percent below the average from 1979 to 2000, but 9% above the record low set in 2007, the warmest year on record in the Arctic. The annual report of the U.S. National Oceanic and Atmospheric Administration concluded that autumn air temperatures in the Arctic had climbed to a record 5 degrees C due to major losses of sea ice caused by a warming trend dating back decades. Wild reindeer and caribou herds appear to be declining in numbers. Surface ice is also melting in Greenland.

However, in line with the adage that every dark cloud has a silver lining, the UN Environment Programme reported that a 3 km thick cloud of pollutants hanging over Asia may be delaying the worst effects of global warming. And the Earth Policy Institute published figures showing that while the number of cars and bicycles manufactured during the 1950's and 1960's was almost the same, nearly three times as many bicycles were manufactured as cars in 2007 and bicycle sales continue to rise even while car sales plummet.

I recently read John Firor's The Changing Atmosphere, which succinctly describes the phenomena of acid rain, stratospheric ozone and climate heating. Long before the end, one feels he is describing a situation that calls for immediate action - I was horrified to find the book was researched and published all of twenty years ago and, apart from getting rid of CFCs, we haven't made a lot of progress since then. However, we're heartened that the new US government plans to comprehend the environment in its proposed economic rescue package. They could well take a leaf out of the book of Portugal, which aims to have 60% of electric power provided by solar, wind, wave and other clean sources by 2020 and which last week signed an agreement with Renault and Nissan to create a national network for zero-emission cars by the end of 2011. Now that's what Detroit should be proposing to Congress is exchange for a bail-out...

The global economic crisis is starting to impact Africa. Mining and manufacturing operations are being mothballed and staff laid off. Oil producing countries are having to adjust budgets to the US$ 50 crude price. On the positive side, oil importing countries are benefiting from lower oil prices while a number of major investment initiatives have been announced.

Algeria and Argentina signed an agreement to boost cooperation on civil nuclear projects. Bidvest is to list its Namibian unit on the Namibian Stock Exchange in 2009 and intends to continue making strategic acquisitions. Siyenza Management reports that the NEPAD Business Foundation, working in conjunction with the WITS Business School, is to train managers and professionals to manage the unique challenges found in Africa's private and public sectors; the shortage of skills remains the biggest constraint to the implementation of South Africa's R one trillion infrastructure programme. Pirates captured a Saudi-owned supertanker loaded with more than US$ 100 million worth of crude oil off the coast of Kenya. GM will close its two plants in Port Elizabeth, South Africa, for longer than usual over the December holidays as a result of declining demand. Major players in South Africa's tourism industry have signed a R 64 million deal aimed at boosting business tourism in the country. Kenya abolished work permit requirements for Rwandan nationals.

Lonrho raised £ 15.6 million to continue development of its core African businesses. Kenya plans to invest Sh 12.6 billion on irrigation schemes to reduce its dependence on rain-fed agriculture and grow more high-value crops. The Banco de Fomento Angola granted US$100 million to entrepreneurs in the province of Huíla, Angola, to finance projects in various socio-economic areas. Delta Partners will invest US$80 million in medium-sized companies in emerging markets and make its first investment in South Africa in the next six months.

Rwanda and Burundi are to start work on the construction of a railway line connecting both countries to Tanzania. South Africa's dti has raised the alarm about fraud involving clothing imports from China. Cote D'Ivoire signed an interim trade agreement with the European Union.

Corporate / M&A: Aflease Gold and BMA Gold are to merge. Anooraq Resources is to purchase an effective 51% of the Lebowa platinum mine. Cape Lambert Iron Ore bought a 30% stake in Marampa Iron Ore Limited in Sierra Leone. The European Islamic Investment Bank increased its stake in DiamondCorp to 26.7%. PMI Gold announced an extension to a bridge loan and appointed Douglas R. MacQuarrie as President and CEO. Forsys Metals is to be acquired by DRC's Georges Forrest International Afrique. Delta Mining Consolidated is considering an appeal against a ruling that it has to bid again for the Western Cluster iron-ore project in Liberia.

Other: Namibia plans to amend legislation to provide for royalties on all minerals mined. South Africa-based Shaft Sinkers won a US$ 270 million contract to dig one of two shafts at a new potash mine being developed south of Moscow. Rio Doce Moçambique invested some US$ 130 million in activities aimed at reactivating coal mining in Moatize, Mozambique during 2008. Anglo Platinum is to invest R 1.4 billion in a project to provide home ownership for its employees in South Africa. Sephaku, a new entrant in South Africa's cement industry, was granted a 30 year limestone mining right in the North West province. DRDGOLD advised unions of its intention to place on care and maintenance the underground operations of the ERPM mine. Lonmin has begun retrenching 1,600 workers. Camec mothballed its Mukondo cobalt mine in the DRC.

African Aura Resources (gold, Dimako - Cameroon)
African Copper (copper, Mowana - Botswana)
African Eagle (nickel, Zanzui - Tanzania)
Afri-Can Marine Minerals (diamonds - Namibia)
Anglogold Ashanti (gold - South Africa)
AXMIN (gold, Passendro - Central African Republic)
Banro (gold, Lugushwa - DRC)
BRC Diamondcore (diamonds - South Africa, DRC)
Coal of Africa (coal, Mooiplaats - South Africa)
DRDGOLD (gold - South Africa)
EQUINOX (copper, Lumwana - Zambia)
Extract Resources (uranium - Namibia)
Gippsland (gold, Abu Dabbab - Egypt)
Great Basin Gold (gold, Burnstone - South Africa)
Hana (diamonds, Ghanzi - Botswana)
Harmony (gold, Randfontein - South Africa)
Implats (platinum, Booysendal - South Africa)
Kalahari Minerals (diamonds - South Africa and Namibia)
Katanga (gold, Luilu and Tilwezembe, Kolwezi - DRC)
Keaton Energy (coal - South Africa)

Kopane Diamonds (diamonds, Liqhobong - Lesotho)
Lake Victoria (gold, Kalemela - Tanzania)
Lakota Resources (Tembo, Tanzania)
Lonmin (platinum, Marikana - South Africa)
Metalex (diamonds - Angola)
Northam Platinum (platinum - South Africa)
Paladin Energy (uranium, Kayelekera - Malawi)
Pelangio (Obuasi - Ghana)
Platinum Australia (platinum, Kalplats - South Africa)
Rockwell (diamonds - South Africa)
Rossing (uranium - Namibia)
SEMAFO (gold - Burkina Faso, Niger and Guinea)
Sentula (coal - South Africa)
Sephaku (fluorspar, Naauwpoort/Kromdraai - South Africa)
Simmer & Jack (gold, uranium, Buffelsfontein - South Africa)
Sunergy (gold - Ghana)
Tawana Resources (diamonds, St Augustines - South Africa)
TEAL (copper, gold - Zambia and DRC)
Uranium One (uranium - South Africa)
Uranium Star (vanadium, Three Horses - Madagascar)
VIPR Industries (gold, Singida - Tanzania)

Corporate / M&A: Omnia, parent of Protea Industrial Chemicals, reported revenue up 78% to R 5,5 billion. PT Medco Energi Internasional is seeking investors from the Middle East to take part in the development of an oil and gas field in Libya. Engen acquired Total's operations in Guinea Bissau and Rwanda. BASF issued a profit warning and cut global output.

Upstream: Chevron has said that around 90,000 barrels per day of oil production were shut in at its Nigerian joint venture, following a pipeline breach. Tullow made a small discovery at Ebony, offshore Ghana. Afren has agreed a farm-down transaction with Mitsui in respect of the Keta Block in Ghana. Mozambique has found two new natural gas reserves in the southern Inhambane region. The cost of Angola's first liquefied natural gas plant is likely to double to US$ 8 billion.

Downstream: Sasol plans to build a new 800,000 barrels per day coal-to-liquids plant in Limpopo, South Africa. Engen's Durban, South Africa, oil refinery will be shut for three to four months after a fire destroyed the main processing unit, causing damage of about R 50 million. The Bio-Energia sugar, ethanol, and electrical energy project has secured US$ 168 million in funding from a group of Angolan banks.

MBendi's Oil and Energy News provides recent press releases for the following companies:

South Africa's cabinet approved an electricity pricing policy. Eskom has shut down one of its units at the Koeberg Power Station in the Western Cape because of a technical fault. Mozambican and South African power utilities EDM and Eskom plan to construct jointly a US$ 1.3 billion power station in Mozambique. Eskom's second 3 300 megawatt nuclear plant is likely to be delayed or halted because of funding constraints. GE and Sasol signed a service agreement for a 280 MW power plant. Zambia has cut by 16% the 540 MW power supplied to its copper mines after state utility Zesco rationed power following the shutdown of a major transmission line for repairs. In the Business Opportunities section of our website, the government of the DRC is seeking contractors to build a telecommunications link to South Africa as part of the Southern Africa Power Pool Project.

International mobile company Millicom International Cellular announced that it has won another African licence. MTN sent a team of engineers to China to assess cellphone handsets that can retail for about US$ 10 and is to spend R 700 million on a fibreoptic network in South Africa. The MTN-Verizon merger has been approved by the South African Competition Commission. African cell-phone operator Vodacom now serves 35.7 million customers, up 13.1% in one year, from 31.5 million a year ago.

The World Bank granted US$ 100 million to support the Mozambican state budget for 2009. The IFC is to invest in Ghana Home Loans to help the specialised mortgage provider boost residential mortgage lending and provide better access to housing finance for Ghanaians. Japan is to lend the International Monetary Fund up to US$ 100 billion in temporary funds to help emerging economies. The EU has pledged 1 billion euros for developing country farmers. The Mozambican and Chinese governments have signed three agreements in Maputo under which China is to provide a total of US$ 43 million in loan and grant finance. Australia is providing US$ 8 million in emergency aid for the people of Zimbabwe. The Oppenheimer Memorial Trust donated R 20 million to 25 nonprofit organisations, from universities to community education and feeding schemes, in South Africa. Registered MBendi users can request an African finance spreadsheet from our website.

Ghana expects 2008 growth of 7%. Botswana's economic growth slowed to 3.3% in the 2007/08 financial year from 5.5%, largely due to lower mining output. The country's trade surplus rose to a record 969.3 million pula (US$ 120.1 million) at the end of August 2008 on increased exports of diamonds. South Africa's economic growth rate has slowed to 0.2% in the third quarter of the year. Motor trade sales for 3Q2008 increased by 5.4% while mining production decreased by 3.5%. The value of recorded building plans passed from January to September 2008 decreased by 3,2%. South African farmers are likely to plant 2.87 million hectares of maize this season. Mauritius' tourism arrivals will grow by less than half the original 8% forecast for 2008 as its key foreign markets enter an economic slowdown. Zimbabwe's gold output, which accounts for a third of its export earnings, hit an all-time monthly low of 125 kg in October. We publish a monthly page of African Exchange Rates.

Zambian opposition leader Michael Sata launched a court challenge to demand a recount of the vote in the presidential election. Algeria's parliament has paved the way for veteran President Abdelaziz Bouteflika to serve a third term by overwhelmingly approving plans to amend the constitution. Guinea-Bissau's President Vieira survived an attack on his residence by renegade soldiers just a few days after an orderly parliamentary election.

Daewoo Logistics of South Korea secured 1.3 million hectares of arable land in Madagascar, an area half the size of Belgium comprising half of Madagascar's arable land, in order to grow corn and other foodstuffs for South Korea using South African labour. It would seem the land was simply given to Daewoo by the Madagascan government at no cost other than a vague commitment to build infrastructure. Abu Dhabi's Al-Qudra Holding planned to buy 400,000 hectares of arable land in Africa and Asia. These deals raise concerns that African leaders are selling the future of their citizens in deals that are far from transparent.

In our last newsletter we summarised just some of the sufferings of Zimbabwe's civilian population. Now, an outbreak of cholera is affecting nine out of Zimbabwe's ten provinces. Robert Mugabe forbade a trio of elders, Kofi Annan, Graca Machel and Jimmy Carter, from entering the country. Yet SADC leaders still refrain from putting pressure on Robert Mugabe and his cronies. Not that Africa's leaders are very effective in the Great Lakes region, Darfur or Somalia.

If your organisation has achieved something significant in Africa and we missed it, then please E-mail your news release to news@mbendi.com.

In recent newsletters, we started providing ideas on how you could best use the Internet and MBendi to improve your business in these trying times. MBendi's events directory - which now has both a simple and an advanced search - provides details of conferences and exhibitions round the world where your company could participate. If you're an event organiser or manage an event venue, ranging from a major convention centre to a cosy conference room, then you can use MyMBendi to add your events or add your venue to our online directories. These are all free services aimed at bringing business partners together in the most cost-effective way. As you use these features of our website, we welcome your feedback on how we can improve our offerings further.

The investment community, on the look-out for opportunities in emerging markets, will be delighted to hear that over the past few weeks our research team has checked and updated our information on the following stock exchanges:

If your company is a listed company or broker and we have omitted to show your company associated with one or more of the more than 300 stock exchanges documented on the MBendi website, then simply go to our page for your company and click on Update to record the exchanges of your primary and secondary listings.

Our website clients not only provide valuable products and services - their websites often provide information that will be of use to the business community. This past couple of weeks:

We welcome new client Messe Frankfurt, UAE based organiser of events, and welcome back past clients McCloskey Coal, specialists in the world mining industry, and Siyakhanda International Trade Concepts which provides world class software solutions aimed at South African Importers, Exporters and Clearing Agents.

Our list of upcoming conferences and exhibitions taking place around the world provides a wide range of business events that will be of interest to our readers (just click on the links to get more information and contact the organisers):

IIC is the organiser of the Mining Indaba 2009, the world’s largest gathering of mining industry stakeholders, which will once again be held in beautiful Cape Town from 9th to 12th February 2009.

The Oxford Princeton Programme is the organiser of the following events during August and September 2009:

Copies of previous newsletters can be found on our website. If you have colleagues or associates who would benefit from using the MBendi website, we would appreciate your forwarding this newsletter to them.

Tel: +27 (0)21 671-9898 / 671-9889
Fax +27 (0)21 671-6316
E-mail: marketing@mbendi.com
PO Box 23498, Claremont, 7735, South Africa

	MBendi Newsletter: 28.Nov.2008

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