Monday, January 9, 2017

Could Christine Lagarde be a model for Manuel Chang?

Resultado de imagem para christine lagarde fashionIf Mozambique is going to renounce the government guarantee on most of the $2 bn in secret debt, it will need to argue that the then Finance Minister Manuel Chang acted unconstitutionally and illegally is signing the guarantee. And it would help Mozambique's case if Chang were to be charged and eventually convicted for his action. Two recent international cases show that senior figures can be convicted of serious crimes and not be punished, and that this is acceptable to the international community. The simplest way forward would be for Chang to plead guilty, avoiding a long trial, and a plea bargain could be agreed (technically not allowed in Mozambique) or President Filipe Nyusi could agree in advance to pardon Chang under article 159 of the constitution.Christine Lagarde, Managing Director of the International Monetary Fund (IMF), was found guilty on 19 December of “negligence with public money” in approving a Euros 400 million payout of taxpayers’ money to controversial French businessman Bernard Tapie; she was the French finance minister at the time and acted against the advice of experts. Tapie has since been ordered to repay the money. Although clearly a serious crime relating to a very large amount of money, the special court decided she should not be punished and that the conviction would not constitute a criminal record. Within hours of the court’s decision, the IMF executive board convened a special meeting which gave Lagarde its full support. (Guardian UK 19 Dec)
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The other case is less well known. On 18 November the former director-general of the Portuguese spy agency (Servico de Informacoes Estrategicas de Defesa, SIED), Jorge Silva Carvalho, was convicted in a secret trial of violation of state secrecy, aggravated invasion of privacy and abuse of power. He was given a suspended sentence of four and a half years in prison, and thus walked free. After leaving SIED he was hired by Ongoing, one of the largest private companies in Portugal, and was convicted of giving Ongoing secret SIED documents. He was also convicted of invasion of privacy for commissioning secret investigations of the head of the company that owns the newspaper Expresso after it published details of the provision of secret documents. (AIM Pt 18 Nov)In both cases, very senior officials committed serious crimes, but went free. Clearly neither the IMF nor Portugal (and thus the donor community) could object to Chang pleading guilty and then going free. But a guilty plea by Chang would add considerable weight to Mozambique refusing to recognise the government guarantee of the secret loans.    

Wednesday, December 7, 2016

Mozambique’s Atomic Energy Agency

Resultado de imagem para Atomic Energy AgencyGuaranteeing that nuclear materials and radioactive sources enter and leave the country safely and without harming the environment and people is among goals of a memorandum of understanding signed yesterday in Maputo between the Mozambican National Atomic Energy Agency (ANEA) and the Tax Authority (AT).According to the document, the two entities will work together to exchange information in order to improve the import and export and transit of radioactive material and customs procedures in relation to those circulating within the country.According to ANEA director general Alexandre Maphossa, the partnership is greatly to be valued as enabling the implementation of measures to control the safety conditions for the management of radioactive sources and nuclear materials at national territory points of entry and exit.Speaking at the occasion, AT president Amélia Nakhare said that the agreement would guarantee the oversight of the circulation of nuclear materials and radioactive sources, and would ensure that the material was used safely and for peaceful purposes, in line with the Nuclear Non-Proliferation Treaty.
Resultado de imagem para Mozambican National Atomic Energy AgencyShe further clarified that the memorandum would ensure that only duly authorised individuals handled nuclear materials, reducing the risk of the environment, people and property being exposed to harmful radiation.The memorandum also recommends the training of staff for the safe transport and handling of nuclear material and envisages collecting revenues from the use of this type of energy to assist the growth of the national economy.The terms of the agreement have already entered into force, and equipment will be installed at airports and other points of entry and exit in the country to put the terms of the memorandum into operation.

Hydroelectric unveils new 5-year strategic business plan

The Cahora Bassa hydroelectric plant (HCB) in Tete province is preparing a strategic business plan for the 2017-2021 five-year period which is expected to address the company’s new challenges in the context of the energy matrix and national development.The Chairman of the Board of Directors of HCB, Pedro Couto, made the announcement and pointed out that it was urgent to prioritise the maintenance, renovation and modernisation of the electricity producer of more than 40 years.

Resultado de imagem para Pedro Couto
Couto made this statement during celebrations of the ninth anniversary of the transfer of HCB to the Mozambican state in Songo, Tete province, on Sunday.Addressing those present, Couto said that, given the growing energy deficit in the country and the region and the market opportunities, it was also essential that the hydroelectric producer met expectations and contributed to the development of new projects for the generation and distribution of energy, particularly the Mphanda Nkuwa and STE lines.“The success of these and other projects, which are a great challenge for the HCB, will require your usual and redoubled commitment and sense of mission, of which the Mozambican people are rightly proud. I am convinced you know how to use your knowledge and technical skills to accomplish these goals,” he said.
Resultado de imagem para cahora bassaThe Cahora Bassa chairman also spoke about the hydroelectric plant’s nine-year reversion to state control, noting that there were record production, economic and financial successes during this period.Couto also mentioned that, for the first time in Tete’s history, the Cup of Mozambique was won by the local soccer team União Desportiva do Songo.“We have no doubt that in the nine years since November 27, 2007, the balance has been positive! Today nobody has doubts that HCB is an example of success. This thanks to all of you present here and all other collaborators absent,” Couto said.Pedro Couto also noted that “good results require a lot of work! It takes commitment and total dedication to the cause in which we believe, and daily defend”.

Facing US probe over Mozambique coal writedowns

Rio Tinto was already under investigation by the powerful US Securities and Exchange Commission when it self-reported three weeks ago to regulatory authorities in the US, UK and Australia over payments made in relation to an iron ore project in Guinea.The Australian Financial Review has confirmed that the SEC has been running a high-level and confidential inquiry into the costly aftermath of Rio Tinto’s $US4.16 billion acquisition of Riversdale, a Brisbane-based operator of coal projects in Mozambique.
Resultado de imagem para RIO TINTOWhile Rio Tinto says it is unable to comment on a US probe that pre-dates the so-called Guineagate scandal over Rio’s Simandou iron ore project, sources in Britain say the SEC has focused particularly on the pathway the global miner took to accounting for the impairments triggered by a takeover that eventually cost then chief executive Tom Albanese his job.
Rio Tinto acquired Riversdale in a two-step takeover through April and August of 2011. Just 17 months later, with the coking coal resource falling short of expectations and the Mozambique government ruling out Rio Tinto’s preferred options for driving the coal to market, the miner took a $US3.269 billion impairment on the investment.As an immediate result, Mr Albanese and Rio Tinto’s then energy chief executive, Australian Doug Ritchie, left the miner.
That the SEC probe has remained confidential suggests the regulator instigated the investigation, and that the company did not invite the regulatory scrutiny as it has with its concerns over the transaction in Guinea.The SEC, like Britain’s Serious Fraud Office, has sweeping extraterritorial powers to investigate and punish companies that operate within its national boundaries.One of the most recent Australian expressions of those powers was the investigation BHP Billiton invited on itself in 2009 after identifying possible breaches of standards around gifts and payments offered in several of its frontier jurisdictions.
That investigation came to nothing, but along the way the SEC investigators turned their focus on BHP’s management of the hospitality program that was associated with it sponsorship of the Beijing Olympics. BHP eventually paid $US25 million in civil penalties to settle the matter.On November 9, Rio revealed that it had self-reported internal concerns over a $US10.5 million to a French consultant that had worked with the company on iron ore concessions in Guinea to the SEC, the UK Serious Fraud Office and the Australian Securities and Investment Commission.In the same announcement, Rio confirmed that an internal audit led by US law firm Kirkland & Ellis had been made of a payment to Francois de Combret, who had advised the company in its recovery of half of its Simandou iron ore leases in Guinea.

Rio Tinto’s executive and board launched the review after leaked high-level internal emails were published on an internet forum called fnPaste. After an interim report from the audit led by Kirkland & Ellis, Rio Tinto informed the regulators of its concerns and announced that one senior executive would leave the company while another had been suspended pending the results of further review.Both of those executives, minerals and energy boss Alan Davies and the head of legal and regulatory affairs, Debra Valentine, were summarily sacked just seven days later.Mr Davies has since complained he was denied natural justice in that he has not been told of the nature of Rio Tinto concerns and he was not offered an opportunity to contest or explain the reasons for his dismissal. Mr Davies indicated he would pursue legal options to defend his reputation.Because Rio Tinto self-reported to the authorities, it has been able to make public the risk of lengthy inquiries in the US, UK and Australia. As a result it has been unable to detail publicly the information gathered by its internal investigation.
Resultado de imagem para Jean-Sebastien Jacques
Twice last week Rio Tinto’s chief executive, Jean-Sebastien Jacques, reported that the “events of Simandou have been very challenging” for the company. “I take integrity and our code of conduct very, very seriously, for me it is actually non-negotiable, we must do the right thing wherever we operate,” he said.What concerns the SEC has about the way Rio Tinto accounted for its $4.16 billion coal folly in Mozambique remains unclear.The original career-ending $US3.269 billion impairments and losses booked against the 2012 accounts were an adjustment of three steps. There was a $US541 million impairment to goodwill banked on completion of the transaction in 2011, $US1.581 billion of impairments to exploration and evaluation assets that were held on the intangibles account, and $US1.147 billion worth of impairments to the equity account.The 2013 accounts were scarred by a further $US497 million impairment forced by a terminal review of the three projects that were supposed to form Rio Tinto’s new south-east African coal frontier.In September 2014, Rio Tinto sold the renamed Rio Tinto Mozambique to India’s International Coal Ventures. The price was just $US50 million.

810 carats rubies from Montepuez

Resultado de imagem para RUBIS MONTEPUEZMustang Resources Ltd has recovered a total of 810.46 carats of rubies to date from its flagship Montepuez Ruby Project in northern Mozambique.These rubies have been recovered from 3,807 cubic metres of initial material processed by the company during the first seven weeks of the bulk sampling plant’s operation.Mustang remains focused on ramping up the rotary-pan processing capacity to 350 cubic metres per day by achieving consistent nameplate production capacity.The Alpha ruby deposit discovered in July 2016 is the current focus of the bulk sample mining operations, with 12,195 cubic metres of gravel already mined. Importantly, initial geological investigation undertaken by Mustang has indicated the potential for the project to host significant ruby-bearing gravels sufficient to support a long mine life.The company is currently planning a full auger drilling campaign, starting from the Alpha deposit extending outwards.The purpose of this drilling campaign is to map the extension of the Alpha deposit and to prepare a mineral resource estimate.It is expected that the rubies being recovered from the Alpha deposit would fetch market related prices for high quality Mozambican rubies.The ruby market remains strong with reported cut/polished high quality ruby prices up to US$35,900 per carat.