By Linda van Tilburg
- President Cyril Ramaphosa said in his 2020 State of the Nation speech in Parliament last night that 2020 is the year that his government wants to fix the fundamentals of the economy. Ramaphosa, whose speech was interrupted for more than an hour by the Economic Freedom Fighters, acknowledged that the country was in crisis.
- South African gold output surged the most in four years in December, providing an unexpected boost for the country’s mining production. Gold output rose by 24.9% from a year earlier, compared with a revised 4.5% in November, according Statistics South Africa. That was the biggest increase since January 2016 and helped total mining production to grow by 1.8%, the first expansion in five months. The gold price that’s near a seven-year high prompted companies to boost production, even amid the deepest power cuts yet in December. The surge in the year-on-year number also reflects a slump in output in November and December 2018 due to a strike by members of the Association of Mineworkers and Construction Union or AMCU.
- Eskom has begun offering managers voluntary severance packages as part of a program to cut costs. Eskom confirmed this and said the board allocated a budget of R400m to the plan. It expects to recoup that amount through savings within a year. Eskom said the utility would ensure that no critical skills would be lost. The purpose of what it called, ‘the separation process’ is to rationalise management layers, which will lead to an efficiently run company. Eskom said the voluntary severance packages would exclude workers below managerial level. Applications will start next week with exists planned for the end of April.
- South African Airways may sell its two prized night-time operating slots at London’s Heathrow Airport as the state-owned carrier battles to stave off financial collapse. Bloomberg reports that SAA is currently using only one of the two take-off and landing slots and cold shift London-Johannesburg flights to a cheaper daytime schedule. It would reduce costs as the turnaround time would be shorter and free up the more valuable night-time slots for potential sale. Meanwhile Virgin said that the airline plans to resume flights between Heathrow and Cape Town starting in October.
- Tesla is selling about $2bn of common stock, taking advantage of its surging shares just two weeks after Elon Musk said raising capital didn’t make sense. Assuming underwriters exercise their option to purchase additional securities, the offering could bring in about $2.3bn in proceeds, Tesla said in a statement. The company said it would help to fund as much as $3.5bn in capital expenditures this year. Tesla shares climbed as much as 3.8% after analysts said the offering will both shore up the company’s balance sheet and support Musk’s plans for growth. The stock has more than tripled since the company released the first of two straight positive earnings reports in October. The offering is a sudden turnabout for Musk, who said two weeks ago that Tesla could fund itself without Wall Street’s help.
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