Latest news with #R1.4-billion
Daily Maverick
28-07-2025
- Business
- Daily Maverick
Valterra's maiden post-Anglo results underwhelm, but rising PGM prices bode well
The Valterra demerger from Anglo was a fairly straightforward process and the company looks ready to carve out its own destiny. The De Beers disposal will be much more challenging. Valterra Platinum's maiden interim results hardly shot the lights out, but rising platinum group metals prices (PGM) bode well for it as a standalone business outside the Anglo American stable. Indeed, with PGM prices once again on the boil, Anglo may yet rue its decision to demerge its platinum arm as it pivots to a sharper focus on copper, iron ore and fertiliser minerals. Valterra completed its demerger from Anglo in late May as the PGM market was showing the signs of an upturn. But the rally was not completely reflected in its results, which were hampered by an extreme flooding event at its Amandelbult operation – the weather is having a material impact on many a mining company these days. The company took a R4.6-billion hit from that deluge, but expects to get most of the money back from insurance. It also had a hit of R1.4-billion in one-off demerger-related costs – lawyers and bankers don't come cheap. Headline earnings per share tanked 81% to R4.73 per share. But the future, while perhaps not bright enough to don shades at this point, looks promising as the sun once again rises on the PGM industry. Perky prices Prices in the year to date have been perky. Platinum is up over 50% to more than 10-year highs, palladium is 35% higher, and rhodium is fetching 42% more. 'We have guided for a 15% increase in production in the second half, and we will be delivering that into buoyant prices,' CEO Craig Miller told Daily Maverick. 'We have been saying for quite some time that the market is in a deficit, that supply is relatively tight and that demand is robust. And that really played out in June and now July. The basket price in July is 20% higher than where it was in the second quarter.' Several factors explain this rebound from depressed prices that in recent years slashed the profits of PGM producers. These include the supply constraints that Miller mentioned, spurred in part by a collapse of the PGM recycling industry, which has also been battered by low prices. There have also been shifting demand patterns. Record gold prices have seen the jewellery industry switch to lower-priced platinum, while sales of hybrid vehicles – which actually require more PGMs than internal combustion engine vehicles – are gaining traction. For the second half of the year, Valterra will be able to bank on the recovery at Amandebult and higher grades from its cash-spinning Mogalakwena operation. The Valterra demerger from Anglo was also a fairly straightforward process, and the company looks ready to carve out its own destiny. Anglo will be releasing its interim results on Thursday and should provide an update then on its plans to dispose of diamond giant De Beers. The PGM sector has had a rough ride in recent years, but producers of natural diamonds face an existential crisis from the surge in lab-grown gems and changing consumer patterns.
Daily Maverick
16-07-2025
- Business
- Daily Maverick
The Road Accident Fund is due for a robust clean-up
The recent suspension of Road Accident Fund (RAF) CEO, Collins Letsoalo, followed by Minister Barbara Creecy's decision to dissolve the RAF board this week, is a welcome move and a long overdue signal that serious intervention is finally under way at this embattled institution. While the RAF's rot certainly worsened under Letsoalo's leadership since 2019, its dysfunction long predates his tenure. The decline began as far back as 2008/09, not coincidentally, the same period when State Capture began to take root under former President Jacob Zuma. The RAF has since become a textbook case of how cadre deployment, poor governance and weak financial oversight give rise to the collapse of a state institution, which in turn leads to widespread failure to deliver on its mandate to the people and massive increases in costs to society. Consider this: in 2005/06, the RAF received just more than R5.5-billion in fuel levy income (then 37 cents a litre), ran a manageable claims book and even produced a surplus of R1.4-billion – thanks in part to a once-off Treasury grant of R2.5-billion. It was, at the time, still largely functional and able to fulfil its mandate, and a 5c increase in the RAF levy would have negated the Treasury bailout. However, within three years, by 2008/09, the RAF's operating expenses had ballooned more than 350% to R24-billion. To cover this growing shortfall, the fuel levy was pushed up to 47c per litre, which was a 27% increase in just three years that significantly outpaced inflation. The rot had taken hold, and opportunistic law firms and other specialist advisory services began feasting on the RAF's inability to manage claims effectively, many settling on courthouse steps at enormous cost to the fund. From 2009 onwards, this chaos spiralled. By 2020, operating expenses had doubled again to nearly R49-billion. However, this figure masked a growing backlog of unpaid claims, with the RAF simply stalling many settlements. Its actuarial liabilities had exploded to an estimated R322-billion, as referenced in its 2020 annual report. Fuel levy hikes In a deeply troubling move, Letsoalo and the RAF Board attempted in 2021 to manipulate the fund's finances by rewriting its accounting policies to reduce liabilities by R306-billion, effectively hiding the problem rather than fixing it. Thankfully, the Auditor-General rejected this cunning plan, and the matter was taken to court. During these loss-of-control years, the public paid a heavy price. Between 2009 and 2022, the RAF levy on the fuel price shot up 360%, from 47c to R2.18 per litre. These hikes inflated the cost of transport, food, and consumer goods for every South African. Instead of fixing the RAF's broken systems, the government simply passed the costs on to the public through excessive, above-inflation levy increases. Had the RAF levy increased only at the rate of inflation, it would have reached just 94c by 2022 – not R2.18. In real terms, the RAF received around R200-billion more than it would have under inflation-linked increases, which is essentially a hidden tax caused by incompetence, maladministration and poor political will. Minister Creecy's intervention must now be the start of a serious turnaround. The next step is critical: appointing a capable, independent and professional board with the skill and courage to fix this institution. That board must recruit qualified executives and people with experience in managing risk, claims, and fraud prevention. South Africa has many capable, retired insurance industry professionals with a deep understanding of complex claims environments and the controls needed to stop internal and external abuse. These are the people the RAF desperately needs. I would also urge the minister to send a strong and unambiguous message to the ANC's cadre deployment machinery – hands off the RAF. It's time to rebuild this institution based on merit, integrity and competence. Not politics. The pain inflicted on accident victims, the public purse, and our economy by a broken RAF is incalculable. Fixing it will take courage and resolve, but it must be done. The window for action is now open. Minister Creecy must not waste it. DM
The Citizen
07-07-2025
- Business
- The Citizen
Tshwane slaps 713 properties with penalty rates over illegal land use
In a bid to ensure the legal use of land, the metro has referred over 700 properties for penalty rates and taxes. Sarah Mabotsa, MMC for Economic Development and Spatial Planning, said the suburbs where the illegal land use activities have been identified range from Arcadia to Zwavelpoort. 'The non-permitted land use activities range from unauthorised commercial activities in residential zones, through to illegal construction and land encroachments. The implications of these violations on the city and its residents are significant, as they can lead to loss of revenue, inability to access critical servitudes, offer unfair land-use activity and commercial advantages to transgressors.' They can also increase the costs of policing for the city, and have potential safety and legal liabilities.' The areas or farms she listed include: – Alphenpark – Annlin – Arcadia – Ashlea Gardens – Atteridgeville – Bon Accord – Booysens – Brooklyn – Capital Park – De Onderstepoort – Derdepoort – Die Wilgers – Eersterust – Elandsfontein – Eldoraigne – Ga-Rankuwa – Garsfontein – Haakdoornboom – Hartebeesfontein – Hazelwood – Kameeldrift – Kleinfontein – Kudube – Laudium – Magalieskruin – Montana – Moreletapark – Olievenhoutsbos – Onderstepoort – Pretoria Central – Pretoria North – Silverton – Sinoville – Soshanguve – Sunnyside – The Reeds – The Willows – Waterkloof – Witfontein – Zwavelpoort She highlighted the financial magnitude of the properties under scrutiny, saying: 'The 713 properties have a combined municipal value of almost R1.4-billion, with the average property value being R1.9-million.' She explained that township establishment laws are designed to prevent chaotic urban sprawl and ensure that the city infrastructure keeps pace with development. 'For example, when an estate is established legally, the developers contribute to the cost of expanding roads, water, sewage and electricity services. Those costs are then passed on to property purchasers. When a development happens illegally, developer contributions could unfairly be expected to be paid for by all other ratepayers. Illegal developments can also place too much strain on available electricity or other services in an area,' she explained. This comes after the recent report tabled and approved by the metro, listing the properties that have been referred by the Department of Economic Development and Spatial Planning to the finance department for implementation of penalty rates and taxes. 713 properties worth R1.357 billion have been referred for penalty rates & taxes for illegal land use activity. — City of Tshwane (@CityTshwane) July 3, 2025 She emphasised that several properties or farms relate to illegal township developments where landowners have not adhered to development planning laws and regulations. 'The city's Department of Economic Development and Spatial Planning Department's Built Environment and Enforcement Division receives numerous complaints related to contraventions of zoning, national building regulations and the city's outdoor advertising by-law. The recommendation to implement nonpermitted land-use rates is one mechanism we use to encourage landowners engaged in non-compliant land-use activities to correct their actions,' she said. She added that the equitable enforcement of laws is a priority to help curb the illegal use of land. 'We want our city to be safe, clean and work for everyone. I thank our law-abiding developers and property owners who work with the city and within the national building codes to ensure that land use activities are compliant and that buildings are safe for people to use and occupy.' She encouraged the legal development processes as they protect homeowners and residents. 'The processes ensure that homes are built on stable land and not in environmentally vulnerable areas. In some illegal estates, there has also been no formal subdivision of the land. This means that purchasers in illegal estates may not actually own the land that they live on,' she said. LISTEN: Do you have more information about the story? Please send us an email to [email protected] or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
Daily Maverick
27-05-2025
- Business
- Daily Maverick
After the Bell: Pick n Pay and the great recovery
One of the big factors that will draw customers to a supermarket is the prices on offer. And when going through the trading statements from the big supermarket groups, I like to look for what is usually called their 'in-store inflation' number. It tells you how prices in that store went up during the period and how they're competing on price. Some of the numbers are brutal for Pick n Pay. I wonder if you and your family had a particular supermarket chain that you almost grew up with? A place that seemed the natural place to shop? As a child growing up in the 1980s and then becoming more independent in the 1990s, it was obvious: Pick n Pay was the place to go. When I first looked for a place to rent in Joburg on my own in my mid-twenties (having previously lived in house-shares in London), I saw it as a sign that one place was near Killarney Mall. It had a Pick n Pay as an anchor tenant and I remember feeling almost nostalgic when I went into the store for my first big shop. I must have spent hours of my life there (and even more getting out of what was, at the time, Joburg's Worst Designed Parking Lot. A title now owned by Victory Park). Woolworths was still growing and, being in my twenties, was a place my parents went to and not me. It was with a shock a few months ago that I realised my children have hardly ever been into a Pick n Pay store. They have grown up in the era of Checkers. And it happened without me really paying much attention. Checkers Sixty60 There is a massive Checkers near where we live now, and we went to it several times, but what really sealed the deal of course was the Checkers Sixty60 delivery service. During the pandemic, we came to rely on it. By the way, much of the backroom work on that service was not done by Checkers at all. It was bought — I hope for a large amount — from Zulzi. And its founder Donald Valoyi has the most amazing story to tell about how he went from running a delivery service to students from two rooms in Fourways to creating Zulzi and then Checkers Sixty60 (in my interview with him several months ago, he did not want to say much about his contract with Checkers). In the meantime, Pick n Pay simply declined, and there seemed to be no reason to go back. Sean Summers does appear to be changing that. Yesterday, the group announced that it had reduced its losses from R1.4-billion in the previous financial year to R237-million now. That's still a loss though, and there is a lot more work to be done. One of the big (and obvious) factors that will bring customers to a supermarket is price. And when going through the trading statements from the big supermarket groups, I like to look for what is usually called their 'in-store inflation' number. It tells you how prices in that store went up during the period and how they're competing on price. Some of the numbers are brutal for Pick n Pay. For Shoprite Holdings, internal selling price inflation averaged just 1.9% for the six months to the end of December last year. That's tiny. Even in these difficult times, you might hardly notice the price of food going up by under 2% in a six-month period. Now one of the reasons a group like Shoprite can do that is because it has built up so much momentum it is able to put pressure on the suppliers that want access to its market. But its systems are also working, and working well. And it seems down to how workers at Checkers feel about their jobs. At my local Checkers, I was putting some (wine) bottles into a trolley recently when a worker dashed over with a box. Before I could even greet them properly, they were packing the box. It was just a good example of how invested this person has become in the Checkers story. Competing on price For Summers, he has to deliver a turnaround for Pick n Pay while also competing on price. And that is going to be a really tough task. Interestingly, he is now 72. And yet he is clearly relishing the challenge. I'm sure it is the private dream of many of us that, as you start to mature in years, some company somewhere urgently needs you. It must give him a tremendous sense of purpose. I think, and I hope, that at the end of it, despite my family's current reliance on Checkers (yes … and Woolies), that he succeeds. If he does, the book of how he did it, of how a big company like Pick n Pay was able to recover in a really tough competitive and trading environment, might be really important.
