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S&P Upgrades South Africa For First Time In Nearly 20 Years As Reforms Gain Ground
S&P Global upgraded South Africa's long-term foreign currency sovereign rating from "BB-" to "BB", citing improved growth prospects, an improved fiscal outlook, and reduced contingent liability following better performance by state-owned power utility Eskom. The National Treasury worked to stop the rising debt and restore credibility fiscally to put the nation back on a path of growth. Recent mid-term budget reviews showed that debt to GDP stabilized at 77.9% in this financial year, and that the budget deficit would shrink to 4.7% in 2025/26 compared to 4.8% in the may budget. As the reform agenda of the country gains momentum, state-owned entities engaged in power and freight logistics have also improved. S&P stated in a press release that it expects South Africa’s GDP to grow at a rate of 1.1% by 2025, after a subdued growth of 0.5% in 2024. It also expects the growth to be 1.5% on average through 2026-2028 due to electricity and other sectors supporting growth. Fiscal revenue exceeded budget targets in the first quarter of fiscal 2025. The agency expects to see successive years with primary surpluses, as well as continued fiscal consolidation until 2028. South Africa's foreign currency rating is now two notchs below investment grade. In 2017, the African economy with the highest industrialisation was downgraded for the first time to junk status following the firing by the then president Jacob Zuma of the well-respected Finance Minister Pravin Gordhan and the subsequent policy instability. S&P has rated the outlook for the country as "positive".
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Sources say that Barrick Mining is considering splitting into two separate entities.
Barrick is considering splitting into Africa and North America focused entities Discussion on the sale of African assets, including Reko Diq Mine Barrick's performance in the record gold rally is undervalued by investors. By Divya Rajagopal Four sources familiar with Barrick Mining's thinking said that the board has discussed the possibility of splitting Barrick Mining into two separate companies, one focusing on North America, and the other focusing on Africa and Asia. Sources say that a split could include the sale of Barrick Africa's assets, as well as the Reko diq mine in Pakistan once financing is secured. Sources said that Barrick wants to settle a dispute in Mali with the African nation’s military administration prior to selling the asset. Barrick's spokesperson did not respond immediately to comments. Interim CEO Mark Hill responded on Monday to a question about a possible division by saying that the company doesn't comment on speculation. Sources said that talks are still ongoing and nothing is finalized. If the plans are implemented, they would reverse Barrick's merger in 2019 with Randgold and eliminate assets acquired by former CEO Mark Bristow. One source said that the company's focus in North America would help to ensure Barrick is not undervalued if a takeover bid were made. This includes Fourmile, an undeveloped major gold mine in Nevada. The Fourmile mine is not expected to begin production until 2029. Hill announced earlier this week the company's shift to North America. Analysts at Jefferies, among others, upgraded its ratings on its shares. Following the report, Barrick's shares rose on the Toronto Stock Exchange. They closed up 3%. Investors say Barrick's stock is undervalued, and they have asked the company how it can take advantage of gold prices that are experiencing a historic rise. Barrick's shares are up 130% in this year but its returns over the past five years have been less than those of its peers. Agnico Eagle, for example, has gained 142%. Investors proposed to divide the company into two divisions, with one with more stable assets, such as Nevada, Fourmile and Reko Diq. The other would have riskier assets, like those in Africa, Papua New Guinea and Reko Diq. Investors say that Barrick, as one of few gold mining companies to have assets on multiple continents and in volatile political regions, is at risk. Barrick's most profitable mine in Mali was taken over by another company earlier this year. This led to a $1 Billion write-off. Three metric tons (three metric tons) of gold were seized and a temporary administrator was appointed to run the mine after a dispute over the new mining tax code in the country. The Malian government has still imprisoned four Barrick employees. One Barrick investor said, "There was a perception that Nevada had a great deal of value." The investor, who asked not to be named because they weren't authorized to speak with the media, added that if the Nevada mine was a publicly-listed company, it would be among the largest gold mining companies in the world. Investor said that the company had resisted splitting up in the past, because its other mines would be worthless without Nevada. Barrick operates the Nevada gold mine with Newmont Corp. The company also has mines in the Democratic Republic of Congo and Papua New Guinea. It also operates gold mines in Tanzania, Dominican Republic and Tanzania. (Divyarajagopal reported from Toronto; Veronica Brown, Lisa Shumaker, and Edmund Klamann edited the story)
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Gold falls 3% after Fed remarks that are hawkish spark a market sell-off
Gold prices fell 3% on the Friday, as a result of a wider market sell-off sparked off by hawkish comments from U.S. Federal Reserve officials. This dimmed hopes for an interest rate reduction in December. As of 02:33 pm, spot gold dropped 1.9%, to $4,092.72 an ounce. ET (1933 GMT) after falling more than 3% earlier in session. But bullion has gained 2.3% this week. U.S. gold futures for December delivery settled 2.4% lower at $4,094.20. David Meger is the director of metals at High Ridge Futures. He said that the idea that there will be a lower likelihood of a Fed cut in December has taken some of the wind from the silver and gold markets. The equity markets fell after the global sell-off caused by Fed hawkish signals. The Fed and traders are now in the dark ahead of the next policy meeting due to the longest U.S. shutdown. Investors were hoping that fresh data would indicate a slowing of the economy, giving the Fed the room to reduce rates in December. This would boost the appeal for non-yielding metals like gold. These expectations dwindled as more Fed policymakers took a cautious approach to additional monetary ease. The FedWatch tool of CME Group showed that market expectations for a rate cut of 25 basis points next month dropped to almost 46% from 50% earlier in the week. Gold that does not yield tends to do well in periods of economic instability and low interest rates. When margin calls or liquidations occur, traders will close all positions to release margin. In this environment of risk-off, even gold prices are down. This is partly explained by Fawad Rasaqzada's note, a market analyst for City Index and FOREX.com. The demand for physical gold in major Asian markets has been subdued over the past week. Silver spot fell 2.8%, to $50.84 an ounce, but is still on course for a 5.2% weekly gain. Palladium fell 2.8%, to $1,387.25, while platinum dropped 2.1%, to $1,547.30. Both metals have been on the rise for this week. (Reporting from Noel John in Bengalur; Additional reporting by Sarah Qureshi, Editing by Leroy Leo & Diane Craft).
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Industry group predicts that private oil investment in Colombia will fall by 2026.
The head of Colombia's largest industry group, said Friday, that private oil and gas investments in Colombia are expected to drop again in 2026. However, companies may reverse course after the presidential elections. The leftist president Gustavo Petro, whose term will end in August of next year, has halted all new hydrocarbon exploration agreements as part his efforts to reduce Colombia's dependency on fossil fuels. Both oil output and investment dropped in 2024, and they are expected to drop again in 2025. Frank Pearl, President of the Colombian Petroleum Association, (ACP), said that oil companies will spend less on exploration in 2026 and more on fulfilling their obligations under current contracts. He said that, "with some exceptions," investment would be down next year. Pearl predicted an 8% increase in investment for hydrocarbon exploration and production in this year. However, the projection won't be met. Pearl said that there is no way to see a return of exploratory activity, which has fallen by more than 60% in the last three years. In August, Colombia produced an average of 750,000 barrels of oil per day. Pearl expects that the oil industry will rebound, based on the proposals of most presidential candidates. He said that the next year could be divided in two - not by investment flows, because they will arrive too late, but rather by intention and commitment. If a new administration gives clear signals about the revitalization of the sector, investors may start to prepare for investing in contracts that have been suspended or seeking new areas. Even so, the recovery is likely to be slow due to industry timelines. Pearl added that Colombia had gone four years with no new contracts. If all goes well, that is likely to happen by 2032. (Reporting and editing by Nia William; Nelson Bocanegra)
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BBVA Research: Argentine mining exports may exceed $25 billion in 2033
According to a BBVA Research study released on Friday, lithium and copper could drive Argentina's mining sector to more than 25 billion dollars by 2033. The report stated that mining represents less than 1 percent of Argentina's gross domestic product (GDP) and only 6% of its exports. However, Argentina has one of the most important project portfolios of critical minerals in the world. Key Context The report stated that Argentina, Bolivia, and Chile, which are all part of the "Lithium Triangle", could provide up to 20% global supply by 2033. In 2024, lithium will surpass silver in terms of exports and represent about 14%. Argentina hasn't produced copper since 2018, but there are projects worth $35 billion. The mining industry could grow by more than $11 billion a year if these projects are realized. The RIGI incentive program provides stability to large-scale investments in this sector. The country's mining chamber CAEM expects Argentina to achieve record exports this year of $5 billion, an increase of 14% over 2024. Lucila Sigal is reporting, Inigo Alexander is writing, and Daina Beth Sool is editing.
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Official: Swiss gold refiners are interested in setting up operations in the US
A senior Swiss official in economic affairs said at a Friday press conference that Swiss gold refiners were interested in opening up in the United States. This was after Washington and Switzerland reached a tariff agreement. In 2024, Switzerland exported gold worth nearly 53 billion Swiss Francs ($66.83billion) to the United States. This was a significant contributor to the European country’s overall surplus of 39 billion Swiss Francs with the U.S. Helene Budliger Artieda is the director of SECO, and she said that gold was not profitable for Switzerland. The margins were "very, very low" at 1% or even less. "But I think it's important to them." Budliger said that the U.S. must strengthen its gold markets. Tariffs on the precious metal remain exempt for imports to Switzerland of other precious metals, and then resized by Swiss jewelers for the U.S. According to the Swiss government, under a new trade framework agreement that includes a commitment by Swiss companies to invest 200 billion dollars in the U.S. before the end of 2028 the United States will lower its tariffs for goods coming from Switzerland from 39% to 15%. The United States will reduce its tariffs on goods from Switzerland to 15%, down from a crippling 39% under a new framework trade agreement that includes a pledge by Swiss companies to invest $200 billion in the U.S. by the end of 2028.
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Gold falls 3% after Fed remarks that are hawkish spark a market sell-off
Gold prices fell 3% on the Friday, as a result of a wider market sell-off sparked off by hawkish comments from U.S. Federal Reserve officials. This dimmed hopes for an interest rate reduction in December. As of 10:45 am, spot gold dropped 2.3%, to $4,072.49 an ounce. ET (1545 GMT) after falling more than 3% earlier during the session. Bullion has risen 2.3% this week. U.S. Gold Futures for December Delivery fell 2.8% to $ 4,075.10 an ounce. David Meger is the director of metals at High Ridge Futures. He said that the idea that there will be a lower likelihood of a Fed cut in December has taken some of the wind from the silver and gold markets. The equity markets fell after the global sell-off caused by Fed hawkish signals. The Fed and traders are now in the dark ahead of the next policy meeting due to a data gap created by Thursday's end of the longest U.S. shutdown. Investors were hoping that fresh data would indicate a slowing of the economy, which would give the Fed the room to reduce rates in December. This, in turn, would boost the appeal for gold, which does not yield. These expectations dimmed when more Fed policymakers took a cautious approach to additional monetary ease. The FedWatch tool of CME Group showed that market expectations for a rate cut of 25 basis points next month dropped to 50% from 64% earlier in the week. Gold that does not yield a return tends to do well in periods of economic instability and low interest rates. When margin calls or liquidations occur, traders will close all positions to release margin. In this environment of risk-off, even gold prices are down. This is partly explained by Fawad Rasaqzada's note, a market analyst for City Index and FOREX.com. The demand for physical gold in major Asian markets has been subdued over the past week. Silver spot fell 2.6%, to $50.95 an ounce, but is still on course for a 6% weekly gain. Palladium fell 0.6% and platinum 1.5%, to $1 418.93. (Reporting and editing by Noel John in Bengaluru, Pablo Sinha)
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Zimbabwe's spodumene imports rise 27% despite low lithium prices
Official statistics show that despite low global lithium prices, Zimbabwean exports of spodumene, a mineral containing lithium and essential to battery production, increased by 27% during the nine-month period ending in September. According to figures obtained on Friday by the Minerals Marketing Corporation of Zimbabwe, Africa's largest lithium producer, exported 1 million metric tonnes of spodumene between January and September. This compares to 784.746 tons in the same period of last year. Oversupply has kept prices for lithium, a component of batteries that power renewable energy technologies, well below the 2022 peak. Prices for lithium carbonate have recently dropped to $11,000 per tonne, down from their highs of $70,000 per tonne in early 2023. The MMCZ stated that "despite the increase in tonnage export value decreased by 11% from $432.4 millions in 2024, to $386.9million in 2025. This is primarily due to the lower international spodumene price." CHINESE FIRMS ARE LEADING ZIMBABWE LITHIUM MINERS China's Zhejiang Cobalt, Sinomine, Chengxin Lithium Group Yahua Group, and Tsingshan Group mine lithium concentrates and export them to China. The MMCZ reports that these companies have collectively spent more than $1.4billion since 2021 on the purchase and development of lithium assets in the nation. Zimbabwe will ban exports of lithium concentrates in 2027, to encourage local processing. Huayou has invested $400 million in a plant in Zimbabwe that will produce 50,000 tons lithium sulphate in 2019. Huayou shipped 400,000 tonnes of lithium concentrate out of the country in 2024. Sinomine also announced plans to build a $500-million lithium sulphate plant at its Bikita Mine in Zimbabwe. (Reporting and editing by Nelson Banya, Rod Nickel, and Chris Takudzwa Muronzi)
S&P upgrades Nigeria's outlook as reforms begin to take root
S&P Global Ratings changed its outlook for Nigeria from "stable" to "positive" on Friday. They backed the ongoing reforms in the economy and affirmed that the country was rated "B-/B".
S&P stated in a press release that "the monetary, fiscal, and economic reforms being implemented" by the Nigerian authorities would yield positive results over the medium-term.
Moody's upgraded Nigeria's credit rating in May by one notch, from "Caa1" to "B3", citing significant improvements in the external and fiscal position of the country. Fitch, on its part, maintained a "B" rating with a "stable outlook" last month.
Bola Tinubu, Nigeria's President, launched the boldest reforms since decades in 2023. He scrapped the expensive petrol subsidy, and removed currency trading restrictions, to boost growth and attract foreign investments.
Analysts say that if these reforms are sustained, they could support economic growth on a long-term basis, although implementation hurdles as well as volatility in the global oil prices still pose risks.
Nigeria has turned towards debt markets to bridge its fiscal gap. Last week, Nigeria raised $2.35bn through an Eurobond issue to help finance the budget deficit for 2025, while still borrowing domestically. (Reporting and editing by AnushkaChourasia, ChijiokeOhuocha.
(source: Reuters)