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Africa money safrica gives gold a break as it moots mine tax hikes

* Gold miner's marginal tax rate cut to 34 from 43 pct* Ruling ANC still mooting mine tax hikesBy Ed StoddardJOHANNESBURG, May 17 As African governments seek to extract more revenue from their mining sectors, the continent's biggest economy has given gold producers a much-needed tax break tha t removes at least one head wind from a struggling industry. Gold Fields, the world No. 4 bullion producer, on Thursday became the latest South African gold miner to report better-than-expected earnings partly on the back of the new, lower tax regime. It benefited to the tune of close to 1 billion rand ($120.46 million) from the change in the first quarter. The companies' gain will cause some shareholder pain as the burden has been partly sifted to dividends, but analysts generally agree that the Treasury's revenue stream from the gold sector will be less as a result. It is impossible to forecast the precise net result as that would hinge on a range of factors from the price of gold to the dividends disturbed. Effectively it is a change in the formula which brings the marginal tax rate for gold miners down to 34 percent from 43. Not everyone in the industry sees it as a significant shift in the South African government's thinking on resource nationalism, which has been a defining feature of the region's political risk profile."It is a structural change and I would not read too much into a change of sentiment on that," Gold Fields' chief executive Nick Holland told Reuters."The gold industry has already taken royalty taxes which is about 300 million rand ($36.14 million) a year to us. Now we have a mooted carbon tax coming which is probably another 300 million. We can't really take much more," he said.

Holland also noted that the ruling African National Congress, while it has gutted the radical idea of mine nationalisation, is mooting higher mine taxes that would effectively translate into 50 percent on profits. Still, while hardly a U-turn, the tax cut does at least indicate that ruling party and government thinking on the subject is not just running one way."We're not aware of any mining jurisdiction in the world that's lowering mining tax at this time," JPMorgan Cavane noted in March shortly after the changes were announced in the 2012 South African budget. Mines minister Susan Shabangu told Reuters earlier this week that any future changes to tax policy would aim to keep the sector, which remains a vital source of employment, competitive. Looked at against the backdrop of the domestic political debate on mining and global and regional trends, the move does seem significant.

Across Africa and elsewhere, the trend - spurred by red-hot commodity prices which have recently cooled - has been to raise mining taxes and royalties or get a bigger slice of the action. This has ranged from tax hikes in Ghana to Zimbabwe's drive to get foreign mining houses to surrender 51 percent stakes in their local operations to black investors there. Not all investors will be happy with part of the burden shifted to shareholders in the form of a dividend tax. And while the formula by which gold miners get taxed has changed, this has not been extended to other sectors, such as platinum and coal.

NOT ALL THAT GLITTERS This may partly stem from the fact that platinum and coal are regarded as growth areas while gold needs all of the help it can get. But can it arrest a decline in South Africa's gold industry, which has seen it fall from being the Saudi Arabia of the precious metal to the world's fourth biggest producer?That must surely be the government's aim given the sector's importance on the employment front in a country where the jobless rate is probably over 40 percent. But the money that flows to the gold miners' bottom line will likely flow out of the country. The Big 3 gold miners, Gold Fields, AngloGold Ashanti , and Harmony, are all investing heavily in expansion plans elsewhere. With the world's deepest mines, steeply climbing power costs and wages rising by double digits annually, the sun is setting on the sector here. And when the additional earnings get ploughed into Papua New Guinea, Mali and other frontier mining states, the government may not be impressed. This could spark a U-turn on the tax policy for gold miners.($1 = 8.3015 South African rand)

African development bank board approves 900 mln euro loan for algeria

ABIDJAN Nov 2 The African Development Bank's board approved a 900 million euro ($1 billion) loan for Algeria on Wednesday aimed at supporting reforms to help the North African nation confront falling oil revenues, it said in a statement.

The money will support the government's efforts to improve domestic revenue mobilisation and the investment climate as well as boosting the efficiency of the energy sector and promoting renewable energy.

Australian business conditions weaken in june survey

SYDNEY, July 9 Australian business conditions weakened sharply in June as sales and profits both suffered from a lack of demand, though a drop in the local dollar seemed to lift optimism at some firms, a survey showed on Tuesday. National Australia Bank's monthly survey of over 400 firms was grim enough for the bank to change its forecasts for domestic interest rates, and it now expects a cut in August rather than November. The survey's main measure of business conditions dropped 4 points to -8, its lowest since May 2009, led by declines in sales and profitability. Indices of employment and forward orders both remained weak, while exports improved a little. Its measure of optimism did rise a point to 0, meaning optimists and pessimists were in balance. For a graphic click on:

"Most concerning was the collapse in retail, mining and manufacturing conditions, with retail activity deteriorating to its weakest level in the history of the monthly survey (since 1997)," said NAB's chief economist, Alan Oster."All of this weakness has come about despite relatively easy monetary policy settings and the recent depreciation of the dollar, which should be helping to improve competitiveness."

The Australian dollar has fallen almost 14 percent against its U.S. counterpart since April. The Reserve Bank of Australia (RBA) also cut interest rates to a record low of 2.75 percent in May and is ready to ease again if needed. Lower rates did seem to be helping some sectors with conditions in finance, business and property lifting to their highest level in two years. There was also a big improvement in confidence in the hard-hit manufacturing sector.

Investors think at least one more rate cut will be necessary to support activity as a long boom in mining investment finally levels off. Swap rates put the chance of an easing in August at 48 percent while interbank futures are fully priced for a move by November <0#YIB:>."We see the risks for the remainder of 2013 beyond August as skewed towards another cut, but heavily data dependent, particularly relative to the labour market deterioration we have currently factored in," added Oster. Inflation would seem to be no bar to a further easing with Tuesday's survey showing little pricing pressure in June. Final product prices fell for a second month while growth in labour and input costs moderated.

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Caixabank sees more loan deterioration in spain

MADRID, July 27 Spain's CaixaBank expects the ratio of Spanish bad loans to continue deteriorating quarter-on-quarter, executives said at an analysts' presentation on Friday, in line with a worsening economy.

CaixaBank's exposure to sovereign debt has been stable quarter-on-quarter, the bank said.