TUESDAY, 11.30AM:
SHAREHOLDERS in Gold Fields of SA, Gencor, Oryx, Beatrix, New Wits and Kloof threw their support behind the scheme of arrangement for Goldco on Tuesday. Alan Wright, the proposed deputy chairman of Goldco said the more than 90% of shareholders in support of the new company demonstrated massive confidence in Goldco.
However, markets seemed unimpressed by the weight of approval, with GFSA gaining less than 1% and ending at R68,50, while Gencor shed 30c to close at R6,90. There had been concerns that Anglo would try to block the inclusion of Kloof in the group, but the fact that 99,8% of Kloof shareholders backed its inclusion showed that Anglo had supported Kloof’s inclusion in Goldco.
The motivating force behind the deal is cost-cutting. Capital intensive deep-level mining in South Africa brings the production price of gold perilously close to the current gold price, while competitors in America and Australia have far greater margins.
The new company will shed the provisional name of Goldco for that of Gold Fields Limited as soon as high court approval is given, and should be listed on the JSE and London Stock Exchange in early February. The new company will also trade in American Depository Receipts in New York.
All that stands in the way of the deal now is the dispute with Anglo over the inclusion of Driefontein, which Anglo blocked last year. But Anglo’s passing of the Kloof vote yesterday indicates that negotiations between the two parties over Driefontein are almost certainly going well.
BUSINESS BRIEFS
WALVIS EPZ ATTRACTING BUSINESS
WALVIS Bay’s Export Processing Zone is attracting attention with investigative visits planned by several South African and Far Eastern companies in January and February, while there is a possibility of Anglo-American relocating certain industries to the EPZ. Wednesday’s Namibian quotes Walvis Bay mayor Manuel de Castro as saying he expects a delegation from Durban textile company Trade Link and other prospective investors in February.
FOREIGN CHICKENS REPELLED BY DTI
THE domestic chicken industry has received additional protection from cheap imports. A loophole that allowed importers to avoid higher duty on frozen poultry products by adding seasoning and having them reclassified as value-added products will be closed from January 8. The duty has been raised from a 27% ad valorem tax to 220c per kilogram.
KANSANSHI COPPER MINE CLOSES
ZAMBIA Consolidated Copper Mines (ZCCM) announced on Tuesday the imminent closure of its small Kansanshi mining operation, due to the low price of metals. The annual output of the mine is estimated to be less than 1000 tons. Cyprus Amax Minerals is examining the possibility of a larger-scale operation on the same property.
LITTLE JUSTICE FOR PROSECUTORS?
JUSTICE Minister Dullah Omar’s announced on Tuesday that overtime payments in his department will cease as funds have “dried up”. Staff organizations have declared a dispute and state advocates and prosecutors, who claim between 25 and 40 hours overtime a month, are now saying they will refuse to work overtime without pay from today, although the situation does not yet allow official protest action. Omar says the vacancies that previously made overtime necessary are being filled.
DISHARMONY AT GROOTVLEI
1000 WORKERS at the Grootvlei section of the Harmony Gold Mine went on an unprotected strike on Tuesday, said Harmony MD Bernard Swanepoel. National Union of Mineworkers assistant general secretary Gwede Mantashe disputed this, saying the strike was a protest against the actions of new management, especially the use of retrenchment as a disciplinary tool. On Tuesday afternoon, Harmony was granted an interim court interdict ordering the strikers back to work.
STRIKE MAY SLOW VW
A STRIKE could hit Volkswagen’s Uitenhage plant slowing down export initiatives, including a R400-million order for 500 Golfs placed by the UK. National Union of Metalworkers of SA shop stewards have informed management that workers are now unhappy with a R1500 revolving employee loan scheme agreed on with the company last November. NUMSA was unavailable for comment on the strike and workers’ new demand for a R1500 school uniform loan.
BANK RATE CUT BY BANK OF BOTSWANA
ON Tuesday, the Bank of Botswana cut their bank by half a percentage point to 12%, saying the move was designed to stimulate additional economic activity and encourage foreign investment. Noting that inflation had declined by 1,3% to 7,8% in 1997, the bank said it intended to keep inflation in check.