> May 2005 - This Month in South and Eastern Africa

THIS MONTH IN SOUTH, SOUTHERN AND EASTERN AFRICA

MAY 2005


This document is produced by the Canadian High Commission Trade Office in Johannesburg, in collaboration with other High Commissions in the Southern and East African region and contains information which would be of interest to persons interested in developing their business links with South Africa and southern and eastern Africa.


CANADIAN BUSINESS NEWS

5 May 2005: The 2005 edition of the International Whos Who of Business Lawyers ranks Fasken Martineau the number one firm worldwide for mining legal expertise. Fasken Martineau is the only law firm with offices in each of the key mining finance centres of Toronto, Vancouver, London, Johannesburg and New York. It regularly advises companies and investment banks in equity, debt and project financings and listings in the Canadian and international capital markets.
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C$200 million investment fund for Africa launched: Actis, a leading private equity investor in emerging markets and Cordiant, the prime Canadian emerging market asset manager, recently launched the C$200 million Canada Investment Fund for Africa (CIFA) with C$100 million from the Canadian Government, and at least the equivalent contribution to be raised from third parties. Actis and Cordiant were selected to manage the fund jointly following an extensive public tendering process. The fund will provide risk capital for private investment in companies in Africa to generate economic growth in a commercially viable and sustainable manner, and will run for ten years. The Canadian governments initiation of this fund is part of the C$500 million Canada Fund for Africa, which was established to enhance Canadas commitment to the G8 Africa Action Plan and the New Partnership for Africas Development.


SOUTH AFRICAN BUSINESS NEWS

Business Day, 12 May: SA reversed a four-year trend by rising in the world competitiveness rankings released yesterday. The World Competitiveness Yearbook, compiled by Swiss business school the Institute of Management Development, ranks the 60 most influential world economies. Yesterdays index showed that SA was able to claw back to 46th position this year, reversing a trend that saw its rating decline from a peak of 37th in 2001 to 49th last year. This survey highlights the need for greater urgency in governments efforts to draw more people into the labour force to
increase SAs competitiveness. The report warned that SAs high unemployment and HIV/AIDS rate remained the biggest obstacles to climbing further up the table.
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The Star, 12 May 2005: Gautrain CEO Jack van der Merwe is optimistic that the R8-billion project will be completed in time for the 2010 soccer World Cup. A project of this nature takes, on average, 14 years from the time of announcement to the moment the mayor cuts the ribbon. He said the two bidders for the project, the Bombela and Gauliwe consortiums, had said they would finish the project on time. Gauteng Premier Mmbhazima Shilowa is to announce which of the two is the successful bidder towards the end of next month. Construction is to start later this year. The Gautrain will cost R2-million an hour to build over 260 weeks, and is expected to create 1-million jobs. The project is an integral part of South Africa's 2010 World Cup bid, an event expected to draw about 500,000 visitors.
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Business Day, 12 May 2005: Mining and insurance companies have come under fire from small business for their narrow approach to empowerment by only buying from suppliers that have sold shares to black investors, it emerged yesterday from research by auditing firm Grant Thornton. This was one of the key concerns raised by more than 300 small and medium-sized companies in SA that employ between 50 and 250 people, which were surveyed by Grant Thornton. It was part of a research in 24 countries among 6,300 medium-sized companies. In SA, the survey showed a marked rise in consciousness among these medium-sized companies of the need for black economic empowerment in their business. Yesterday it emerged that 61% of these SA companies reported that empowerment was a key issue for them in winning business.
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African Decisions, Issue 2: The pressure is on to speed up the building of infrastructure at southern Africas ports to keep up with the demand. South Africas seven commercial ports, as well as key ports in Namibia and Mozambique, are taking steps to keep up with the fiercely competitive global shipping industry and greater workload generated by industries in the region. With governments announcement of an injection of R40,8bn in South African ports and railways, mainly for infrastructure, some exciting developments lie ahead. Transnets goals on the ports side have been spelt out by its chief executive, Maria Ramos, who is determined to lower the cost of doing business by reducing supply chain costs and improving efficiency. South Africa has the potential to become far more globally competitive.
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Business Day, 18 May: SAs reputation as a mining investment destination had suffered a lot of damage because of Harmonys hostile bid for Gold Fields, Mvelaphanda Resources CE Pine Pienaar said yesterday. He said this was the message he had received on a recent overseas investment roadshow, and a big effort was needed to restore the countrys attractiveness among offshore investors. All the investors we spoke to in the US, Britain and Europe were very concerned about SA as an investment destination in the mining sector, he said. Overseas investors are questioning why they should invest in the South African resources sector if they have the chance of putting their money in South America, India, China and so forth. There were lessons to be learned about the regulatory environment in SA. The mining industry, gold mining in particular, together with the minerals and energy department and labour, needs to promote SA again as an investment destination, he said.
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The Star, 19 May: The Coega industrial development zone (IDZ) has finally secured its first foreign investor, which has eluded it since its inception in 1996. It was announced yesterday that Belgian high-end niche textile producer Sander International Textiles would invest about R200 million to build a sophisticated weaving mill at Coega. On completion, the project is expected to create more than 500 permanent jobs. An empowerment company, Ican Foundation, led by David Molapo, will own about 51% of the project. For years, the Coega IDZ had been branded by its critics as a white elephant. A hospital takeover in 2003 of French aluminium firm Pechiney by its Canadian counterpart, Alcan, appeared to have spelt doom for the construction of a first-generation aluminium smelter worth $2.2 billion (R14.1 billion). Ever since its acquisition of Pechiney, Alcan has been conducting feasibility studies on the economic viability of building a smelter at Coega. It has also indicated that if it goes ahead with the project, it would not commission a first-generation smelter. But Moss Ngoasheng, the chairman of the Coega Development Corp said talks between Alcan and the government regarding the Alcan smelter were still continuing and Alcan could make an announcement in October.
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Financial Mail, 20 May: A dozen new full-service regional phone companies will be awarded licences in the next few months as part of a plan to improve teledensity outside the main urban centres. The licences will be awarded to successful bidders to operate networks in predetermined areas in North West province, Mpumalanga, Gauteng, KwaZulu Natal, Limpopo and the Eastern Cape. Two licences are up for grabs in each province. Government hopes the new operators will stimulate competition, reduce prices and raise teledensity in areas that are relatively poorly served by existing telecom providers. This is the second of three rounds of licensing in which as many as 27 new operators will be licensed to compete with the incumbent operators. The first round, concluded last year, resulted in the awarding of seven licences. The operators will each receive R15m in funding from governments Universal Service Agency, provided they meet certain targets.
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The Star, 30 May 2005: Economic growth in South Africa was believed to have been brisk but slower in the first quarter of the year, analysts said on 27 May. According to a Reuters poll of 19 economists, gross domestic product is estimated to have grown by 3,8% in the first quarter on a quarter-on-quarter and seasonally adjusted and annualised basis. This compares with a figure of 4% in the fourth quarter of last year. Manufacturing output rose at a sluggish pace in the first quarter. All factors suggest that confidence is strong and demand high ... I think the latest government forecast is within reach, said Standard Chartereds Africa economist Razia Khan.


DEVELOPMENTS IN THE SOUTHERN AFRICAN REGION

African Decisions, Issue 2: Africas satellite sector is set to boom as governments deregulate telecommunications markets and new technology is being made available, reports news agency Reuters. Space-based technology could be the ideal solution for Africa, where fixed-line companies cannot afford to build phone lines in poor rural areas that the burgeoning cellphone industry has yet to reach. An industry expert at the SatCom Africa 2005 conference in Johannesburg, Geoffrey Daniell, estimated that 70% of Africas Internet connections operate via satellite and this was likely to grow as more Africans go online. While the provision of satellite technology is relatively low-cost, the actual application may be tricky. A satellite operator can easily provide a small village with a public phone and a fax powered by VSAT technology. However, the real challenge lies in finding someone capable of training people how to use the technology and repair it, as well as administering the prepaid payment systems.
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The Indian Ocean Newsletter reports that a Canadian company, Pan African Mining Corp (PAF) which holds permits for prospecting gold in Madagascar, has recently opened a laboratory for analysing mining samples. The Antanananarivo Laboratory will be used particularly for analysing samples extracted under PAFs drilling programme for its Dabolava permit in Madagascar. Later on it will be opened to other mining companies in Madagascar, as well as to the Malagasy Ministry of Mines.
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Agricultural exports now account for just 23% of Tanzanias export earnings, a top government official said recently. Opening a one-day workshop on agricultural marketing policy in Dar es Salaam, Co-operatives and Marketing Permanent Secretary Ladislaus Komba said that earnings from agricultural products declined from 50% over the past few years.
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Canadian exploration and mapping firm, Midlands Minerals Corp has announced initial geological mapping program observations confirm that gold mineralisation at the Itilima zone is associated with high grade quartz-bearing veins with adjacent carbonate alteration and disseminated pyrite. The firm has two prospecting licences (Pls) which form the Itilima gold and diamond properties in the country. Midlands Minerals Corp is a TSX Venture Exchange company which commenced trading under the symbol MEX on 4 April 2005. Midlands has a 75% interest in two contiguous prospecting licences in Tanzania (the Itilima property). The company also has an 80% interest in a 109 sq km gold property on the north-east end of the Ashanti gold belt in Ghana (the Kwahu Praso property).
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Barrick Gold Corp and Falconbridge Ltd have finalised a joint venture agreement for the Kabanga nickel deposits and related mining concessions in north-western Tanzania. Under the terms of the agreement reached on 19 April 2005, in Dar es Salaam, Falconbridge has acquired 50% indirect joint venture interest in the Kabanga Project which they will also operate. Falconbridge will over the next several years fund and conduct a further exploration, in fill drilling and technical work to update the resource model for Kabanga. The entire work is expected to cost US$50 million. Falconbridge will draw upon its nickel processing, project development and engineering expertise to bring the project towards feasibility. Greg Wilkins, Barricks President and CEO said during the signing ceremony We are pleased to enter into this turn-key partnership agreement with Falconbridge, a fully-integrated nickel company and the worlds third largest refined nickel producer. Falconbridges President and CEO, Mr Aaron Regent said Kabanga was an important nickel development project and will fit in exceptionally well with our strategic growth initiatives. Falconbridge Ltd is a leading producer of nickel, copper, cobalt and platinum group of metals.
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A Canadian company, Energem Resources Inc, has expressed its willingness to team up with a local company, Africommerce International Ltd to construct a pipeline for carrying petroleum products from Dar es Salaam to Mwanza. Information carried by the local daily Citizen indicated that the Canadian company would commit its subsidiary company, Energem Petroleum Corp Ltd to undertake the project in collaboration with Africommerce International Ltd under what is known as SA/Tanzanian Development Initiative. According to Mr Andy Macaulay, a SA representative of the Canadian company, Energem Petroleum Corp Ltd will set up a joint venture company (Energem Tanzania) with different stakeholders who will be mutually agreed upon to undertake the project. The joint venture company would be mandated to undertake to build and manage the proposed pipeline and modern storage tanks in Mwanza and Dar es Salaam.
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The Zanzibar Telecommunication Co. Ltd (ZANTEL) will start to operate on Tanzania mainland in July 2005 according to the Deputy Minister for Communications and Transport, Ali Omar. Established in 1999, Zantel secured a licence to operate on the mainland last February.
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The government has reaffirmed its commitment towards expansion of Information and Communications Technology (ICT) to rural areas with the aim to enhance sustainable national development. Launching Business Connexion (Pty) Ltd, one of the leading South African ICT companies in Zanzibar recently, the Deputy Minister for Communications and Transport, Dr Maua Daftari, said the technology has a critical role in helping Tanzanian businesses become globally competitive.


Engineering News, 20-26 May: One of the leading airport management companies in the Indian Ocean islands, Airports of Mauritius Ltd, has embarked on an extensive airport expansion plan for the Sir Seewoosagur Ramgoolam (SSR) International Airport including a major security upgrade. Managed and owned by Airports of Mauritius Ltd, the executive chairperson of the company, Vijay Poonoosamy, told the African Airports conference in South Africa earlier this year, that an intensive period of development would now take place for the thriving Mauritian international airport. This will see new terminal expansions and improvements on the air side and a number of infrastructure improvements, including the expansion of the fuel storage depot and facility. Additional aircraft parking hard-stands will also be added to the air side to allow for increasing airliner traffic. The current security upgrade at SSR Mauritius International is being handled by South Africas Grintek Aviation Systems, which is installing a technology-based access-control system that will regulate entry at the airport. This will enable SSR Mauritius to comply with international security standards and will include an infrastructure facility to allow further upgrades of the system in the future.
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Mining Weekly, 20-26 May: Canadian-listed exploration company Pan African Mining reports that the drilling programme being implemented at its Mountain of Gold project, in Madagascar, has yielded several significant discovery intercepts. Pan African Mining has 10 000km² of diversified mineral properties in Madagascar, which it is exploring for gold, uranium, previous stones, base metals and industrial commodities. Its operations in Madagascar are carried out through its operation subsidiary, PAM Madagascar.
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Newly discovered mineral deposits in the western regions of Kigoma and Rukwa are set to improve Tanzanias balance of payments to all time surpluses once exploitation begins. Research funded by the French government and co-ordinated by the University of Dar es Salaam, in collaboration with a French expert reveals the existence in commercial quantities of platinum, cobalt, manganese palladium and iron. The new mineral wealth discovery comes in the wake of official reports that last year six major gold mining companies exported gold worth US$600 million. The six mining giants were Kahama Mining Corp Ltd, Geita Gold Mining Ltd, Golden Pride Project, Africa Mashariki Gold Mining Ltd (now under Placer Dome), and Buhemba Gold Mine.
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Tanzania will become the second country in East Africa after Uganda to undertake a rural and peri-urban electrification project in a move aimed at developing the countrys rural access to electricity and information technology services. The project code-named Energising rural Transformation (ERT) is expected to take off next year under a US$80 million World Bank financing and expects to connect about 200,000 households under a 2-year public and private sector partnership electrification investment program. The ERT project will involve different components including hydro-power, electricity, geothermal, solar, wind and bio-mass, which will later merge with the ongoing rural electrification project done by Tanzania Electric Supply Co. Ltd (TANESCO).
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Tanzanias economy recorded one of the highest growth rates in the continent at 6.7%, beating the governments own estimate of 6.3%. The bullish economy is the star of the region with inflation down, exports up and foreign exchange reserves at an all-time high. The high growth in the gross domestic product (GDP) is attributed to good performance in agriculture, which grew by 6%, up from 4% the previous year, wholesale and retail trade, hotels (including tourism), transport and communications. Reviewing the performance of the economy, the Permanent Secretary in the Ministry of State (Planning and Privatisation), Dr Enos Bukuku said that inflation had also declined from 4.4% in 2003 to 4.2% in 2004.
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Tanzania launched Africas biggest one-stop information centre - the Tanzania Development Information Centre (TDIC) on 26 May 2005. The TDIC is a facility with modern information and communication technology equipment to facilitate knowledge sharing and training beyond boundaries of distance and time. It is part of over 70 learning centres that exist worldwide. The centre was developed jointly by the Presidents Office - supported by the World Bank, the Economic and Social Research Foundation, British Council, CIDA and UNESCO.
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The third bidding round for petroleum exploration in Tanzanias deep sea closed on 25 May 2005 with the three bids received from Australian Orphir Energy, Petrobas of Brazil and Norwegian Statoil. The Tanzania Petroleum Development Corp (TPDC) said the bid evaluation would start immediately and the results would be announced in a months time. This is the third round since TPDC and Western Geo of the UK embarked on deep sea oil exploration in 1999/2000. Petrobas of Brazil has since won block number 5 (off Mafia Island) and Shell of Holland got the blocks that cover the deep sea off Zanzibar and Pemba Islands. Besides Petrobas and Shell, other oil exploration firms with interest in the country include Antrim of Canada, Maurel & Prom of France, UK-based Pan African Energy and Artumas Group of Canada.


KEY UPCOMING EVENTS

PUMPS, VALVES & PIPES will take place from 8-10 June 2005 at Gallagher Estate, Midrand. To obtain further information, contact Exhibition Management Services on tel: 2711-783 7250, fax: 2711-783 7269, email: director@exhibitionsafrica.com.
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WATER FOCUS AFRICA 2005 is scheduled to take place in June 2005. It will be staged by the African Water Association alongside the Pumps, Valves and Pipes Exhibition. This exhibition will showcase appropriate products and technology for a continent committed to upgrading infrastructure and service delivery and will also be backed up by a Water Services Convention. For more information, contact Serean Thomson or Gillian Pope at Exhibitions Africa on tel: 2711-783 7250, fax: 2711-783 7269, email: st@exhibitionsafrica.com or gp@exhibitionsafrica.com.
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THE 26TH DURBAN INTERNATIONAL FILM FESTIVAL will take place from 15-26 June 2005. Celebrating the best in international, national and continental cinema, the festival will present over 300 screenings, most of which are premiere showings in this country. The festival also offers filmmaker workshops, industry seminars, discussion forums, and outreach activities that include screenings in township areas where cinemas are non-existent. For further details, contact Gail Snyman at the Centre for Creative Arts on tel: 031-260 2506, fax: 031-260 3074, email: cca@ukzn.ac.za, or visit website: www.cca.ukzn.ac.za.

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THE 4TH WORLD CHAMBERS CONGRESS (hosted by and organised by the world Chambers Federation) will take place from 20-22 June 2005 in Durban. This congress will be opened by President Thabo Mbeki and will be the first of this kind to be held on the African continent. Congress workshops will focus on the practical role of chambers in addressing a broad range of business issues and will include entrepreneurs and SMMEs; chambers in society; environment; women in business; the HIV challenge; public-private partnerships; human relations and labour issues; branding, accreditation, information technology and e-business.
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THE DAR ES SALAAM INTERNATIONAL TRADE FAIR takes place from 30 June - 10 July 2005 at the Mwalimu Nyerere Trade Fair Grounds. Contact the Board of External Trade for further details on fax: 255-741-268 540, email: betis@intafrica.com.
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THE INTERNATIONAL AGRICULTURAL SHOW takes place at the Nzuguni Agricultural Show Grounds, Dodoma, Tanzania from 1-10 August 2005. Contact the Tanzania Agricultural Society (TASO) on fax: 255-212 2923 for further information.
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WITFOR 2005 (World Information Technology Forum) will take place in Gaborone, Botswana from 31 August to 2 September. It is hosted by the government of Botswana in collaboration with the International Federation for Information Processing (IFIP). WITFOR is a state-of-the-art, high-level international forum, aimed at ICT policy-makers and practitioners. Contact the WITFOR Secretariat for further information on tel: (+267) 361 0384, fax: (+267) 391 0382, email: witfor@gov.bw or visit www.witfor.org.bw.
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THE 18TH WORLD PETROLEUM CONGRESS AND THE SOUTH AFRICAN INTERNATIONAL OIL AND GAS EXHIBITION will take place from 25-29 September 2005 in Johannesburg at the Sandton Convention Centre. This Pan-African event will attract high profile delegations from the whole of Africa and the Middle-East. The Canadian delegation will be led by the Government of Alberta who will host a Canadian pavilion at the exhibition. a For further information, contact Imogen Mkhize, CEO on tel: 2711-535 7205, fax: 2711-883 1333.
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ACT 2005 (THE 7TH ANNUAL AFRICAN COMPUTING & TELECOMMUNICATIONS SUMMIT) will take place from 4-7 October 2005 at the Crowne Plaza Hotel, Sandton, Johannesburg. It is the continents top gathering of IT users, suppliers, service providers, policy-makers and innovators. For further details visit AITEC at www.aitecafrica.com or contact them via email: info@aitecafrica.com.
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BIOTECH AFRICA 2005 (biotechnology, life sciences and medical equipment industry) takes place from 18-20 October 2005. In conjunction with this, the first Bio and Med Investment and Strategic Partnering conference, LIFEsparks 2005, takes place from 19-20 October 2005 at the Sandton Convention Centre, Johannesburg.. For further information, visit www.southgro.co.za or contact Southgro Investor Relations at info@southgro.co.za.
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PROPAK CAPE 2005 (Promotion through Packaging) will take place from 18-20 October 2005 at the Cape Town International Convention Centre. This is the Capes largest packaging, processing, plastics and printing exhibition. For more information, contact Specialised Exhibitions on tel: 2711-835 1565, fax: 2711-496 1161, email: specialised@specialised.com, or visit their website: www.specialised.com.
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THE AFRICAN AIRPORT SUPPLY EXPO will take place from 19-21 October 2005 at the Sandton Convention Centre, Johannesburg. This expo will exhibit the full range of products, services and technologies critical for the efficient and profitable management and development of African airports. For further information, contact David Graham at International Trade Projects on tel: 2711-486 0585, email: david@tradeprojects.co.za

or visit www.airportshowcase.com. Contact Exhibitions for Africa for further information on : webadm@exhibitafrica.co.za.
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AFRICA GIS 2005 will take place at the CSIR International Convention Centre, Tshwane (Pretoria), South Africa, from 30 October to 4 November 2005. This conference offers a unique opportunity and platform for organizations to showcase their respective experiences, expertise and achievements to a wide-ranging audience from the African continent who share common interests in the geo-information field. For more information, visit www.africagis2005.org.za . Natural Resources Canada (Earth Sciences Sector) and the Canadian Space Agency will be leading a Canada Trade Mission to this conference. For further information on participating, contact Omar Allam at Natural Resources Canada on: fax: 613-995 8737, email: oallam@nrcan.gc.ca.
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THE MINING INDABA 2006 INVESTING IN AFRICAN MINING conference will take place on February 7-9, 2006 at the Cape Town International Convention Centre Convention Square. A three-day conference, this is Africa's most important mining event and it attracts each year, the world's leading gathering of global policy makers and international financiers. To date, the Mining INDABA has raised billions of dollars and introduced the international investment community to mining interests throughout Africa. For further details, visit International Investment Conferences at www.iiconf.com.
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MINEAFRICA will be held from 5-8 March 2006 in Toronto, Canada during the PDAC (Prospectors & Developers Assoc of Canada) trade show. This is an innovative marketing opportunity for African countries and companies seeking mining investment. For further details, contact APOC Inc on tel: 416-588 7749 or fax: 416-588 7504.
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GLOBE 2006 will be held from 29-31 March 2006 in Vancouver, Canada . It serves as an important global platform for Canada to showcase its capabilities in environmental management and technology. Leading-edge companies from Canada will be presenting a wide range of environmental solutions at the Globe 2006 Trade Fair. For further information, visit: www.globe2006.com.
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Information on other Trade Fairs is available on our website at http://www.canada.co.za.
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Please note that while every effort has been made to ensure the accuracy of the information contained in this bulletin, the Canadian High Commission Trade Office will not be held responsible for any loss or inconvenience resulting from the application of this information.

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