Kenya sets new law of 35 % local ownership for new mining projects

Prof Muigai’s verdict is good news to Australian mining company Base Titanium, widely regarded to have been the target of a small cabal of top government officials who have been pushing for the 35 per cent local equity participation rule. Base Resources, the Australian firm mining titanium in Kenya’s Coast, has valued 35 per cent of its local operations at $150 million (Ksh12.8 billion).

kenya mining and oil n gas laws policy emblem

Who is – Githu Muigai – from Wikipedia, the free encyclopedia

Githu Muigai (born 1960) is the Attorney General of The Republic of Kenya. He holds a bachelor’s Degree in Law degree from the University of Nairobi, a masters degree in International Law from Columbia University School of Law. Prior to becoming Attorney General Githu Muigai has served in the defunct Constitution of Kenya Review Commission and at the United Nations as Special Rapporteur on contemporary forms of racism, racial discrimination, xenophobia and related intolerance.

Prof. Githu Muigai

Prof. Githu Muigai from  http://www.softkenya.com

A gazette notice issued in September by Environment Minister Chirau Ali Mwakwere directed that mining companies cede 35 ownership to local investors. Mining firms and overseas companies have been given a grace period of between three and five years to comply.

New laws at a glance

  • The regulations were welcomed  by locals  who saw this as a way to  benefit from the mining  profits generated by the foreign mining companies , who see it as arm twisting to share their profits.
  • Mining activity has picked up in Kenya recently, however the majority of companies are still at the initial stages, having been issued only with prospective licences.
  • Prof Muigai has clarified that only licences issued after the gazette notice, will b e affected by the 35 per cent local equity participation requirement.

Referred to as the “Mwakwere rules” and introduced by Environment Minister Ali Mwakwere. The one problem that this  new law  will bring about for foreign companies is , will the locals but into their shares or have the money to buy into their shares  thus giving them the 35 % for approval.

Who is  – CHIRAU MWAKWERE

Amb. Chirau Ali Mwakwere – Kenyan Minister of Environment

Chirau Mwakwere

From : http://www.whoswho.co.ke/chirau-mwakwere

Amb. Chirau Ali Mwakwere is the Kenyan Minister of Environment. He previously served as the Kenyan Minister of Transport

In comparison , Botswana with one of the most established mining sectors — and reputed to have the most liberal mining codes — the threshold for local shareholding of mining companies is 13 per cent.

Oil and gas exploration in kenya

The oil and gas industry is also going through change , with the  Ministry of Energy hopes to introduce the regulations under the reviewed Petroleum Exploration and Production Act by mid 2013. For oil and gas exploration, Acreage will now be awarded to the highest bidder who offers the best terms to the government and agrees to pay requisite fees. This exercise will be carried out publicly, replacing the current system where exploration rights are issued on a first-come first-serve basis.

By introducing competitive bidding, Kenya will join the ranks of countries like Tanzania that already have the system. Uganda plans to have a bidding process as well.

Brazil top Retail stocks Listing of companies

Below a table of some of the top 20 largest companies in Brazil by sales in no particular order and also listing by some sectors . The list from Business and Economy Brazilian magazine was published featuring a list of the largest corporations operating in Brazil (financial companies, like banks, were not included) in 2003.

retail sector in brazil and company list

Even though Brazil has the fifth largest population in the world, Brazilian retailing is not correspondingly dominant in the global rankings, More than 50% of Brazil’s retail consuming is for food.

1 Petrobras ( petroleum and energy)

Petrobras drills wells and refines petroleum. BR Distribuidora sells the products (gasoline, diesel, etc) to the wholesalers (Shell, Esso, etc) which eventually sell to the gas stations.

2 BR Distribuidora ( Wholesale (fuel))

3 Telemar (Telecommunications)

4 Telefonica (Telecommunications)

5 Ambev ( Beer and drinks)

6 Ipiranga

7 Volkswagen

8 Shell

9 General Motors

10 Brasil Telecom ( Telecommunications)

11 Bunge Food (Food and Drink)

14 Carrefour ( Retailer)

12 Pão de Açucar ( Retailer)

19 Cargill

33 Casas Bahia ( Retailer)

Brazil is growing so quickly in recent years that signs of inflation have begun to pop up in its economy, which has forced the country’s Central Bank to out on the brakes and take measures to raise interest rates. The Brazilian index has presented an opportunity for those bold enough to buy when prices and valuations are a bit depressed with markets running a bit weaker that it should be.

shops in brazil

In brazil In 2011 retailing experienced a slight slowdown in growth and economy compared with the strong performance recorded in 2010. For “brazil 2012” was a bit faster paced though finance markets were a bit subdued. Wikipedia holds extensive list of companies in brazil

Some Heavy Hitters in the brazil stock market

Ultrapar Holdings, Inc. (UGP) distributes liquefied petroleum gas and lubricants and has a market cap of $8.2 billion.

Gafisa SA (GFA ) is a Brazilian home builder with a market cap of $2.73 billion.

Cosan Ltd. (CZZ) is an agriculture player, producing and selling sugar and ethanol with a market cap of $3.46 billion.

Braskem S.A. (BAK) produces and sells petrochemicals and has a market cap of $9.77 billion.

Investors interested in exchange traded funds focused on Brazil might want to consider the following trades:

ProShares Ultra MSCI Brazil (NYSE: UBR) is almost 40% higher year to date.

Global X Brazil Consumer ETF (NYSE: BRAQ) is more than 20% higher year to date.

iShares MSCI Brazil Index (NYSE: EWZ) is almost 19% higher year to date.

Global X Brazil Mid Cap ETF (NYSE: BRAZ) is almost 18% higher year to date.