2nd August 2023
AngloGold's Golden Drop
AngloGold Ashanti (ANGJ.J) shares plummeted over 8% on Tuesday as the mining company predicted a potential 58% decline in half-year profit. The drop is primarily attributed to increased costs and mandatory environmental provisions in Brazil. Johannesburg-based AngloGold projects headline earnings per share (HEPS) to range between $0.30 and $0.37 for the six months ending June 30, compared to $0.71 the previous year. The firm incurred environmental provisions of $38 million net of tax due to new Brazilian legislation governing mineral waste facilities. Inflation also drove up operating costs by $111 million, while gold production remained relatively stable.
Niger Coup Rattles Uranium
The price of uranium has shown a slight increase following Niger's recent military coup, whilst mining operations continue in the world's seventh-largest producer of the radioactive metal. The spot price reached $56.25 per pound from $56.15 a week earlier, and while it has doubled over the past three years, it remains far from its peak in 2007. Experts predict potential further price rises in the coming weeks due to tight uranium markets and rising demand. As Niger produces 4 percent of the world's uranium supply, its current events are of great interest, especially to Europe, which heavily relies on the metal.
Rand's Summer Slump
The South African rand weakened against the dollar, losing momentum after a strong July performance and amid increased global risk-off sentiment. The rand traded at 18.2500 against the dollar, about 2% weaker than its previous close. Currency strategists attributed Monday's weakness to concerns about China's economy, which dampened risk appetite. The Absa Purchasing Managers' Index indicated manufacturing activity contracted for the sixth consecutive month in July. Additionally, economists predict that South Africa will exceed its budget deficit target this year due to infrastructure bottlenecks, high unemployment, and the worst power crisis.
Mozambique 'Tuna Bond' Drama
Mozambican President Nyusi seeks immunity in London's High Court to block allegations of accepting unlawful payments in the $2bn "tuna bond" scandal against Credit Suisse and others. The case involving shipbuilder Privinvest and owner Iskandar Safa has faced difficulties due to Mozambique's failure to disclose key documents. Privinvest and Safa aim to hold Nyusi liable for payments they say funded his election campaign. Nyusi claims immunity as a sitting head of state. The case revolves around deals between state-owned companies and Privinvest, leading to a currency collapse, debt crisis, and prolonged litigation since 2016.
