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28
JUN
3pm

Amcu’s Mathunjwa has a strong message for Sibanye ahead of wage talks

Amcu president Joseph Mathunjwa has a message for Sibanye-Stillwater ahead of wage talks with the company’s platinum unit: after four meetings if there is no deal in sight, the union will call a dispute.
The last big round of wage talks in the platinum group metals (PGMs) sector kicks off next week between the Association of Mineworkers and Construction Union (Amcu) and Sibanye-Stillwater. Amcu on Tuesday signed a five-year wage agreement with Impala Platinum (Implats), a deal that was reached with no strike. Both the broad terms and the lack of a strike or even a dispute mirrored the pact that was recently agreed with Anglo American Platinum (Amplats).
The Sibanye talks may not be as smooth sailing. Mathunjwa regards Sibanye and its CEO, Neal Froneman, with transparent hostility. If there is a mining company that still presses his buttons, it’s Sibanye.
For one thing, the agreements that have been reached begin on 1 July — an unprecedented state of affairs in the PGM sector. In the past, wage pacts have usually been reached months after the previous ones expired.
“We wanted to start early with them but they [Sibanye] said no, we want to start when the agreements end,” Mathunjwa said after the signing ceremony in Johannesburg with Implats.
“That is sheer arrogance . it’s the sheer arrogance of the Sibanye CEO, he just wants to be different,” he said.
You can kind of see where this is going. The shape of a pear comes to mind.
Mathunjwa went on to say that there would not be “a marathon, like in gold”. Amcu joined its former archrival, the National Union of Mineworkers (NUM), in a recent three-month strike at Sibanye’s gold mines, which came after several months of often intense talks.
“I think four meetings will be enough,” he said. “Then we declare a dispute. It’s as simple as that. Or we reach an agreement.”
Mathunjwa said that with the other PGM producers, from the first meeting it was clear that things were moving in the right direction.
This does not mean that a Sibanye platinum strike is inevitable. Surging inflation at the moment may fuel worker demands, but a rising cost of living also raises the costs of downing tools.
And essentially, a template has been established that Amcu members will probably want to follow. The full details of the Implats deal remain unclear, but the company and the union said in a joint statement that “it is in ...
28
JUN
3pm

Tongaat Hulett’s uncertain future looms large

Sugar producer Tongaat’s ill-fated capital-raising deal with Zimbabwe’s controversial Rudland family is finally over. But where to now for a highly indebted company?
Tongaat Hulett has scrapped its controversial deal with Magister, the company associated with the Rudland family from Zimbabwe. But having dodged that bullet, it now faces another – how to deal with its debt burden.
The mathematics of this problem are brutal: the company currently has debt of R6.8-billion and a market capitalisation of R360-million. Not long ago, in 2017, the company technically made three times that in net profit alone. How reliable these earnings are is now open to question; the company was forced to restate its 2018 and 2019 earnings after the accounting scandal broke.
For the past two financial years, the company has reported a R628-million and a R908-million loss, although it should be noted that turnover has more or less held up at around R15-billion.
The company has repeatedly said – both prior and after the Rudland debacle – that it remains “firmly of the view” that a capital raise would be a better alternative to strategic asset disposals, “particularly an accelerated disposal programme which is unlikely to realise full value for the assets”.
While in normal circumstances this is no doubt true, the mathematics of a capital-raising exercise imply the almost complete decimation of the existing shareholder base.
In order to raise sufficient capital to cover the existing debt entirely, existing shareholders would be massively diluted to the extent that their shares would be almost worthless.
This would, of course, be an extreme measure, because presumably the existing creditors would be happy with the company continuing to hold some of its debt.
The company has said in response to questions from Business Maverick and elsewhere that: “The lender group remains supportive of Tongaat Hulett and the company is currently engaging with them and other parties to provide liquidity.”
What is not clear, however, is how long that patience will last; already Tongaat’s cost-of-debt has reportedly been increased by this notionally supportive lender group.
The other option for the company is to sell down its assets – a process it embarked on before the Magister debacle began. There are existing offers, or at least proposals, for both its Mozambican and Zimbabwean assets.
Only last week, the American company Lusitania Investment Capital offered Tongaat Hulett R3.5-billion for the Mozambican assets, which include majority holdings in the Xinavane and Mafambisse sugar plantations and mills.
Tongaat rejected that ...
28
JUN
3pm

ConCourt rules Communications Minister Ntshavheni’s digital migration deadline was unlawful

Minister of Communications Khumbudzo Ntshavheni did not consult telecommunications, broadcasting and civil society players about South Africa’s decision to migrate from analogue to digital broadcasting on 30 June 2022. And because of this, the Constitutional Court has ordered her to begin a new consultation process to determine a fresh date.
South Africa’s migration into the digital age from old-style analogue television broadcasting – which was meant to start in 2008 in line with best global standards but hasn’t been completed 14 years later – faces more delays.
Communications minister Khumbudzo Ntshavheni, responsible for overseeing South Africa’s broadcasting policy, had agreed to a deadline of 30 June 2022 for the country’s move to digital television broadcasting.
The switch will allow larger data to be transmitted, improving picture and sound quality for television viewers. By 30 June, traditional analogue signals would be switched off across the country, heralding a new era in broadcasting.
But the Constitutional Court has thwarted Ntshavheni’s analogue switch-off plans, declaring her deadline “unlawful” because she unilaterally decided on it without consulting the broader telecommunications and broadcasting industry.
The apex court found that the switch-off of analogue television broadcasts in South Africa must be delayed to allow for more consultation.
This introduces new challenges for South Africa’s broadcasting policy, which first embraced the need for the country to move from traditional analogue signals on 8 September 2008.
At the time, countries such as the US and UK were also preparing for the move to digital broadcasting and have since done so successfully, leaving South Africa in the dust.
From 2008, South Africa drafted and adopted a policy framework for the move to digital broadcasting, but missed all self-imposed deadlines to effect the transition, including 1 November 2011, 17 June 2015 and the end of March 2022. The latter deadline was shifted to 30 June 2022 by the High Court in Pretoria, later accepted by Ntshavheni.
The e.tv challenge
Broadcasting company e.tv had dragged Ntshavheni to the high court, arguing that the deadline (end of March 2022) set by the government for its migration to digital broadcasting was unrealistic and more time was needed – up to an additional 18 months.
E.tv maintained that this would give the government enough time to get decoder-like devices, called set-top boxes, into households that relied on analogue terrestrial television transmissions.
These set-top boxes – provided and subsidised by the government – are crucial for the move to digital broadcasting as they convert traditional/analogue televisions to ...
28
JUN
3pm

Does Numsa actually know the damage it is causing in the Eskom strike?

How tiresome it is to be writing about Eskom again. How long does this have to go on? Who is to blame? It just seems to be endless.
Despite the endlessness of this debacle, however, it’s important to note that a big change has taken place this week. The warning by Eskom that it is moving from Stage 4 to Stage 6 for the first time since 2019 is not because of wet coal, maintenance issues or State Capture.
The difference is that this time, the cause is industrial unrest. And there is a difference about the industrial unrest because it’s illegal. Eskom employees are defined as essential workers, since electricity is an essential service.
On the surface, it seems like just another of SA’s huge number of industrial actions. The National Union of Metalworkers of South Africa (Numsa) is demanding a 12% wage increase, while the National Union of Mineworkers (NUM) has demands ranging between 8% and 10%. Solidarity is demanding 5.9%. Eskom has revised its offer upwards of 5%.
But there is much more going on here.
Numsa ‘shop steward’
My colleague Ed Stoddard reported last week about someone Numsa described as a “shop steward” at one of Impala’s platinum mines who was murdered a week ago by two gunmen. The man’s name was Mahlomola Hlothoane.
Read in Daily Maverick: Implats secures five-year wage deal with Amcu; Numsa member murdered in Rustenburg
But then the story got much more complicated because Impala searched their records and discovered that Hlothoane was not employed by the company.
Apparently, he was a freelance labour organiser who got paid — like so many others — for recruiting union members.
Union membership in the platinum sector is extremely high, so it’s not as though Hlothoane was recruiting miners who are not members of any union; he was recruiting members of the Association of Mineworkers and Construction Union (Amcu) and trying to get them to cross over and become Numsa members.
Think about what that means. This is not a situation where the battle is between management and workers. SA’s labour relations are about rival trade unions trying to poach each other’s members. And union leaders, we presume, take this so seriously that they order a hit on anyone trying to go that route.
Union business
As I have written in the past, trade unions in SA are only secondarily concerned about wages and work conditions. They are, first and foremost, businesses. And if you are going ...
28
JUN
3pm

Eskom strike appears to be over after unions call on workers to ‘normalise the situation’

The Numsa and NUM unions have called on workers to ‘normalise the situation’ after they said Eskom had agreed to return to the bargaining table. That is a transparent code to their members taking part in an illegal strike blamed for tipping the country into Stage 6 load shedding to return to work.
Is there light at the end of the Stage 6 load shedding tunnel that threatens to plunge South Africa’s fragile economy further into darkness?
A glimmer of hope appeared on the horizon late on Tuesday when the National Union of Mineworkers (NUM) and the National Union of Metalworkers of SA (Numsa) called on workers taking part in an illegal strike at Eskom to “normalise the situation”.
That is a transparent code to their members taking part in an industrial action blamed for tipping the country into Stage 6 load shedding to return to work. The strike has not been officially sanctioned by the unions so it remains to be seen if those taking part in the protests will heed the call. But union sources who spoke to Business Maverick said they expected the employees to pick up their tools.
The breakthrough came after Eskom and the union leaders met on Tuesday and agreed to resume wage talks on Friday at the Central Bargaining Forum (CBF).
“Given the fact that Eskom has finally agreed to return to the negotiating table and there is a new offer which will be formally presented on Friday in the CBF, NUM and Numsa leadership are calling on our members at Eskom to give the process of negotiations a chance,” the NUM and Numsa said in a joint statement.
“In light of these developments, we call on workers at Eskom to normalise the situation given that Eskom has returned to the negotiating table.”
Eskom said in a statement that the meeting was “productive”.
But it warned that while the workforce may be back in full force on the job on Wednesday, “The system will still take some time to recover. As a result of the strike, maintenance work has had to be postponed, and this backlog will take time to clear.”
So Stage 6 load shedding, which had not been triggered since December 2019, may still bite the economy for some time. It effectively means that 6,000MW have to be removed from the grid on a rolling basis to prevent a complete collapse of the system that would throw South Africa back ...
28
JUN
11am

Fed’s Williams Sees 50 or 75 Basis-Point Rate Hike Debated in July

US central bankers will discuss whether to raise rates by 50 basis points or 75 basis points when they meet next month, with the decision being determined by economic data, Federal Reserve Bank of New York President John Williams said on Tuesday.
“In terms of our next meeting, I think 50 to 75 is clearly going to be the debate,” Williams said during an interview with CNBC. “My view is we’ve got to get interest rates higher, and we have to do that expeditiously.”
The policy maker said he supports raising the Fed’s benchmark interest rate to a range of 3% to 3.5% by later this year, and that the path for 2023 will depend on the data — though current bets in financial markets for rates the be around 3.5% to 4% next year are “a perfectly reasonable projection right now.”
Fed officials have pivoted to more aggressive rate increases as they fight the hottest inflation in 40 years, following criticism that they left monetary policy too easy for too long as the economy rebounded from the pandemic.
The Fed raised its benchmark interest rate earlier this month by 75 basis points — the biggest increase since 1994 — to a range of 1.5% to 1.75%. Chair Jerome Powell told reporters after the meeting that officials could consider another 75 basis-point increase, or a 50 basis-point hike, when they meet next month. Powell will speak on Wednesday on a panel during the European Central Bank’s annual policy forum in Sintra, Portugal.
Some other policy makers, including Fed Governor Michelle Bowman and Governor Christopher Waller, have since backed a 75 basis-point hike at their July 26-27 meeting. Minneapolis Fed President Neel Kashkari and Chicago’s Charles Evans said it would be reasonable to consider another increase of that size and San Francisco’s Mary Daly called it a good place to start the debate.
Consumer prices rose 8.6% last month from a year ago, according to the Labor Department. The CPI report for June will be published July 13, before the Fed holds its next meeting.
Read More:
Powell’s Path to 2% Inflation Needs Luck or, Failing That, Pain
Fed Dove Daly Joins Officials Open to 75 Basis-Point July Hike
Powell Hammers Home ‘Unconditional’ Commitment to Cool Prices
“The thing I have great certainty is: We definitely need to get the funds rate up to between 3% and 3.5% later this year. That’s something I have a lot of confidence in,” Williams said. ...
28
JUN
11am

G-7 Leaders Aim to Squeeze Putin’s Gas Revenue

Group of Seven nations moved forward with a plan to limit President Vladimir Putin’s energy revenue by curbing oil and gas prices, a day after a Russian missile strike on a shopping center in central Ukraine killed at least 20 people.
The missile attack, in the city of Kremenchuk some 300 kilometers (186 miles) southeast of Kyiv, was sparked by a fire from a strike on an arms and ammunition depot nearby, Russia’s Defense Ministry said — a claim swiftly refuted by Ukrainian authorities. More than 40 people were still unaccounted for. G-7 leaders branded the attack a war crime.
Ukrainian President Volodymyr Zelenskiy told G-7 leaders he wants the war to be over by the end of the year, according to officials familiar with the remarks. Heads of state and government are en route to Madrid for a NATO summit, which plans to boost the size of its high-readiness force to 300,000 to bolster defenses against Russian aggression.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
NATO Allies Still Seeking Progress With Turkey on Expansion
Soviet Terror Made Sacrifice Second Nature for Baltics
NATO to Label China ‘Systemic Challenge’ in Strategic Plan
Russia Slips Into Historic Default as Sanctions Muddy Next Steps
Russian Crude Flows Slump, But It’s Likely to Prove Temporary
Putin to Leave Russia for First Time Since the Ukraine Invasion
On the Ground
Russian forces are pressing ahead with their goal of occupying all of the Donetsk and Luhansk regions, Ukrainian military spokesman Oleksandr Motuzyanyk said during a video briefing. Kyiv-led forces are withdrawing from Sievierodonetsk, as the Russian military moved in on neighboring Lysychansk from the south, closing in on the last major redoubt in the Luhansk region that Kyiv still controls. While Lysychansk remained the main hot spot of military action, Russian troops shelled Ukrainian positions and civilian areas elsewhere along the front line, including with air-to-land missiles. Kharkiv, Ukraine’s second-largest city, was also being shelled, its mayor said.
(All times CET)
At Least 20 Killed in Missile Strike at Shopping Center (4:17 p.m.)
The number of people killed in the shopping center strike in Kremenchuk has climbed to at least 20, while more than 40 are missing, Kyrylo Tymoshenko, the deputy head of the presidential office, said on Telegram. Another 59 were injured.
Interior Minister Denys Monastyrsky said in televised remarks that identifying remains was complicated by heavy burn wounds, adding that many appeared to have ignored an air-raid alarm and remained in the ...
28
JUN
11am

US Consumer Confidence Hits 16-Month Low on Drag From Inflation

US consumer confidence dropped in June to the lowest in more than a year as inflation continues to dampen Americans’ economic views.
The Conference Board’s index decreased to 98.7 from a downwardly revised 103.2 reading in May, data Tuesday showed. The median forecast in a Bloomberg survey of economists called for a decline to 100.
A measure of expectations — which reflects consumers’ six-month outlook — dropped to the lowest in nearly a decade as Americans grew more downbeat about the outlook for the economy, labor market and incomes. The group’s gauge of current conditions fell slightly.
As the Federal Reserve raises interest rates to curb price pressures, higher borrowing costs risk denting purchases for big-ticket items like homes, cars and appliances. Despite sagging sentiment, buying plans are so far holding up, the report showed.
The share of respondents who said they intend to buy a vehicle or major appliance in the next six months increased from a month earlier. At the same time, vacation plans, both domestic and internationally, softened, likely due to higher airfares and gas prices.
Consumers see prices in the next year rising at the fastest rate in the group’s data back to the 1980s. Separate data on inflation-adjusted consumer spending will be released Thursday.
“Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement.
“Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by yearend.”
What Bloomberg Economics Says.
“The widening gap between consumers’ present situation and their expectations of the future raises the risk of recession. Apprehension about the direction of the economy could increasingly influence consumer behavior, resulting in a downward spiral of slumping demand.”
–Eliza Winger, economist
To read the full note, click here
Nearly 30% of respondents expect business conditions to worsen in the back half of the year, the largest share since March 2009, during the height of the financial crisis.
The figures reinforce data last week from the University of Michigan, which showed consumer sentiment in June remained near a record low. Respondents expect prices to rise in the next 12 months at nearly the fastest pace in 40 years.
The share of consumers who said jobs were “plentiful” decreased slightly to 51.3%, and six months from now, respondents were also more pessimistic. The ...
28
JUN
8am

FROM OUR ARCHIVES: Message to Eskom: Screw You! (The sequel)

I can solve all Eskom’s problems in one sentence. This is not a brag. It’s just a fact. And it’s such an obvious fact, that I wonder why it isn’t being done. Frankly, I’m suspicious.
First published in Daily Maverick 168
We will get to the sentence, but first, here is the background. Years ago, I wrote a column for Daily Maverick in the early days of the site with the enormously provocative headline: “Message to Eskom: screw you”. (Great headline, the brainchild of DM Editor in Chief Branko Brkic.)
A message to Eskom: Screw you!
The story was about my own personal trials and triumphs living off the grid. In those days, it was something of a novelty, so it was interesting for readers as an experiment about what was then a new kind of lifestyle.
The short version of the story is that my wife and I decided to move to a very remote place in the Karoo. It is so remote (we joke now that we have always been match-fit for Covid-19) that it did not have electricity nearby. We were faced with the tricky choice of bringing electricity in, which would have been a very expensive process. It’s about 5km to the nearest Eskom line. Farmers in the area do this, so it was conceivable, but the line has to be approved and it has to run fairly high off the ground, so that means a pile of poles and a whole construction process.
So for reasons that were neither necessarily environmentally conscious nor perspicacious, we decided to plunge into the wild world of solar power. We had some advantages, in that because we were in control of the house construction process, we could build in power-saving mechanisms. This is important because the less power you use, the less power you need to generate. The biggest issue was water heating because modern water geysers are massively power consumptive. So instead we use gas water heaters and gas cookers. This is important because it does mean transferring existing homes to solar power is often more complicated than simply putting in a few solar panels.
The other complication has been storing power overnight. If I had a rand for every time a solar sceptic, of which there are gazillions, pointed out ever so patiently the astounding fact that solar power does not work at night, I would be a very rich person. Even then there ...
28
JUN
8am

FROM OUR ARCHIVES: A message to Eskom: Screw you!

Here is the good news: it is possible to screw Eskom... sort of. And here is the bad news: you have to change your life. And you have to fork out a whack of cash.
I should say at the outset that this is my personal story. It is also an incomplete story, because I have just started on the journey and it’s not clear yet whether it’s sustainable over the long term or whether all the equipment will last.
‘How to screw Eskom’ is the practical story worth telling because when I started living it, the real world solutions were few and far between. They generally fell into two flavours: American isolationists in the Midwest or Californian greenies, neither of which are very much applicable to South Africa. It gets worse when you establish what is actually available here and made for local conditions. But for those of you interested in living life in a more environmentally friendly and independent way, or just interested in saving money in the long term, these are my experiences so far, for what they are worth.
Living sustainably, I have to admit, was a concept more or less forced on my wife and me, since we decided to try to live in a fairly remote spot in the Karoo. (It also happens to be one of the most mind-blowingly beautiful spots – Ed). Getting Eskom power installed to the house we decided to build, about 5km from the nearest Eskom line was an option. The cheapest quote we could get was around R250 000 and this was some time ago. Weirdly, the biggest part of the madly expensive quote was digging the deep holes necessary to hold the long poles required for electricity lines.
With Eskom, thankfully, out of picture, sustainable, renewable energy was the only way we could go. But all the options were slightly bewildering and involved making a set of choices with little guidance. The whole thing also involved a whole new acronym soup made out of intricate electrical things which I only remotely remember from school – volts, amps, kilowatts and connections in parallel and in series. Even before that, the first big choice was between wind power and solar power. I experimented with both and found there to be fairly obvious downsides to both.
Wind generators are difficult to find in SA. Eventually, I found something called a Wind-X generator which is sold ...
28
JUN
12am

Iran applies to join BRICS group of emerging countries

Russia boasts that Iran has already applied to join the BRICS group, while Argentina has voiced interest in doing so. The Russian government needs to forge ties with other countries as its war on Ukraine has turned it into a pariah state.
Iran has submitted an application to become a member in the group of emerging economies known as the BRICS, an Iranian official said on Monday.
Iran’s membership in the BRICS group, which includes Brazil, Russia, India, China and South Africa, “would result in added values for both sides”, Iran’s Foreign Ministry spokesperson said.
Russian Foreign Ministry spokeswoman Maria Zakharova said separately that Argentina had also applied to join the group. Argentinian officials could not be reached for immediate comment.
Argentina’s President Alberto Fernandez, currently in Europe, has in recent days reiterated his desire for Argentina to join BRICS.
“While the White House was thinking about what else to turn off in the world, ban or spoil, Argentina and Iran applied to join the BRICS,” Zakharova wrote on the Telegram messaging app.
Russia has long been pushing to forge closer ties with Asia, South America and the Middle East, but it has intensified its efforts recently to weather sanctions imposed by Europe, the United States and other countries over its invasion on Ukraine. Read full story
On Monday, the United States and other Western nations pledged unwavering support for Ukraine after 28 civilians were killed in several Russian attacks, including a missile strike on a crowded shopping centre. Read full story
Russia denies targeting civilians in what it calls is a “special military operation”.
Kyiv and its allies in the West say the war is an unprovoked act of aggression. BM
27
JUN
11pm

Food inflation relief is within sight as crops and crude prices pull back

Fears of grain shortages are giving way to optimism that key producers will reap harvests large enough to help replenish war-pinched reserves.
Runaway food inflation may be tamed soon – at least temporarily – as farm commodities tumble after a surge that pushed up prices of everything from bread to chicken wings.
Four months after Russia’s invasion of Ukraine upended trade flows and sent futures soaring, fear of grain shortages is giving way to optimism that key producers will reap harvests large enough to help replenish war-pinched reserves. That’s critical for the wheat needed to feed the world; the maize to nourish pigs, chicken and cattle; and the oilseeds to process food.
“Supply may not be as impaired as we think because other areas will compensate for any losses from Ukraine, and it is happening across the board,” said Marc Ostwald, global strategist at ADM Investor Services in London.
Australia, one of the biggest wheat exporters, is forecast to produce another huge crop this year, while Brazil’s biggest-growing area has so much maize it’s piling up outside bins. Nervousness in North America that spring weather woes would significantly cut grain and soybean acreage has abated.
The Bloomberg Agriculture Spot Subindex is on track for its biggest monthly drop since 2011. Along with easing concerns about dwindling grain and oilseed reserves, worries that an economic slump could slash demand also knocked soaring crop futures down from recent highs. While such changes can take time to reach grocery shelves, chicken and beef prices are cooling a bit, according to Darden Restaurants, owner of the Olive Garden and LongHorn Steakhouse chains.
Fuel pump prices also will play a big part in determining the course of food inflation for the remainder of this year. Supermarket bills are expected to “moderate over the next six months, particularly if energy prices fall”, said Joe Glauber, former chief economist at the US Department of Agriculture.
As of June 24, the average US daily price of a gallon of petrol had declined for 10 straight days after climbing to some of the highest on record. Crude oil futures are down more than 10% from a near all-time high in the days following Russia’s late February attack on Ukraine, one of the world’s top grain and vegetable-oil shippers. Fertiliser, a key expense for farmers, has retreated after surging to records.
The United Nations’ food price index pulled back from a record high in March after the war ...

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