To all of my readers, I live in Northern
California. I am not that far from where gold was discovered in the 1840's. This
lead to the great California gold rush.
Please read my previous blog
entry. We will have another god rush starting in Zimbabwe soon. Three centuries
ago, Baron Rotschild made the profound comment as follows:
"When the
streets run red with blood, INVEST! INVEST! INVEST!"
I have made a
substantial investment in Zimbabwe. Everyone except my wife thought I was crazy.
I know it has hit absolute bottom. When you get that low, there is only one way
you can go--back up!!!!!
I have been lucky to be working with Guy Algeo
and the incredible team of investment specialist at Imara S.P. Reid in
Johannesburg (www.imaraspreid.co.za).
They have been around 50 years. Most of the senior management comes from
Zimbabwe. They have an office in Harare. If you are ready to make an investment
in Zimbabwe, these people are the experts who can make it happen for you. You
can email Guy Algeo at guya@imaraspreid.co.za.
Mugabe`s days numbered regardless of vote, mining industry bets
Production in Zimbabwe`s mining industry has fallen, despite
booming metals prices
Zimbabwe`s mining industry, with the world`s second-biggest platinum and
chrome reserves, should be booming amid record prices. Instead, production has
fallen.
Ferrochrome output alone has slumped by 15% since 2000. The
industry and investors are betting that better times lie ahead. The key: the
political future of President Robert Mugabe.
Zimbabwe`s 84-year-old
leader, whose economic policies have led to 80% unemployment and the world`s
fastest inflation, is facing more candidates than ever as he runs for
re-election March 29. Even if he wins, he`ll be pressed by his own party to step
down, said Anne Fruehauf, an analyst at Control Risks in London.
"There
are investment funds waiting in the wings`` should Zimbabwe`s leadership change
and the economic outlook improve, said Mark Wellesley-Wood, chief executive
officer of Johannesburg-based Metallon Corp, Zimbabwe`s biggest gold producer.
"We are hunkered down. It`s been survival and preparation.``
A
leadership change might set the stage for a rebound from the country`s
decade-long recession and 100,580% inflation rate. Metallon and Impala Platinum
Holdings Ltd already are prepared to expand. Zimbabwe has some of Africa`s best
roads and best-educated workforce, and the remnants of a manufacturing industry
that once lagged behind only South Africa in the continent`s southern
region.
To be sure, Mugabe has confounded expectations of his departure before. He
said several times in the past few years that he intended to retire, without
setting a date. He told the state-controlled Herald newspaper in April 2005 that
he would retire at his term`s end this year, only to say in a February 2007
interview with the state-owned TV-One that "there`s no vacancy" as ruler of the
country.
The March 29 election pits Mugabe against two principal
foes: opposition leader Morgan Tsvangirai and a rebel from his own Zimbabwe
African National Union-Patriotic Front party, Simba Makoni. Opposition and
human-rights groups accuse Mugabe of intimidating his opponents and preparing to
rig the outcome.
Economic progress might come rapidly should Mugabe
lose, or win and be pushed out. "I am certain that if there is political change,
the turnaround will be quick,`` Greg Hunter, chief executive officer of Central
African Gold plc, which bought two Zimbabwean gold mines last year and is
considering expansion, said from Johannesburg.
Relatively little investment is needed to rehabilitate the industry, Hunter
said. Power production could be ramped up at Zimbabwe`s coal-fired plant at
Hwange in the northwest and the Kariba South Hydropower plant with minor
equipment replacements. Many of the country`s gold mines aren`t closed. Instead,
they have been maintained even while they were idled or had production
cut.
For now, Impala Platinum is delaying portions of an expansion
plan in Zimbabwe valued at US$750 million in 2005. As recently as 1999, Anglo
American plc planned to boost its gold production 10-fold in Zimbabwe. Instead,
it has sold ferrochrome smelters and nickel mines.
Zimbabwe last
year produced 7.5t of gold, according to the Chamber of Mines, compared with 29t
in 1999. Gold production is at the lowest level since 1907, according to John
Robertson, an independent economist in Harare.
Mugabe`s seizure of
white-owned commercial farms to redistribute to black subsistence farmers and
allies has slashed export earnings needed for diesel and equipment to keep mines
running. On March 7, Mugabe approved laws to compel foreign companies to sell
51% of assets to black Zimbabweans.
"They have the mineral resources;
it`s only the presence of Mugabe that makes the West uncomfortable,`` said
Sebastian Spio-Garbrah, an analyst at Eurasia Group, a New York political-risk
firm. "Once he has gone, there will be a sense of relief.``
Amos
Midzi, Zimbabwe`s mines minister, didn`t return calls to his Harare
office.
Impala, the world`s second-biggest platinum producer, now is
limited to boosting annual output to 160,000oz by 2010 from just under 100,000oz
last year, about 5 % of the company`s total output.
"The investment
climate is a tricky one,`` Impala chief executive officer David Brown said in an
interview. "Zimbabwe is a country that has a lot going for it. It needs
stability.``
(Bloomberg, March 27)
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