Cape Town, South Africa — 08 May 2013 – The Industrial Development Corporation (IDC) “’ South Africa’s state-owned development financier “’ plans to issue as much as US$553 million in local-currency bonds in the year to the end of March next year.
“We could issue over US$500 million in US$110 million increments,” said IDC chief financial officer Gert Gouws in an interview here with Bloomberg News. This is to assist in projects to increase beneficiation of minerals in South Africa.
South Africa “’ which has the world’s biggest known reserves of platinum and chrome and is the continent’s largest producer of gold and iron ore “’ wants more minerals to be processed locally to boost the economy and create jobs, with the IDC supporting projects that promote this. The company owns 7.9% of ArcelorMittal South Africa Limited, the continent’s biggest steelmaker, and a 21.9% stake in ferromanganese producer Merafe Resources Limited.
President Jacob Zuma has set a goal to reduce the jobless rate in the continent’s biggest economy to 14% by 2020 from 25.2% in the first quarter of this year. Economic growth will probably reach 2.6% this year, less than half the 7% pace the government estimates it needs to meet the jobs pledge.
The rand has depreciated 6.4% against the dollar this year, the worst performance among the 24 major emerging-market currencies tracked by Bloomberg. Its three-month implied volatility against the dollar declined 7.5 basis points, or 0.075 percentage point, to 12.575%, indicating that options traders see smaller swings in the currency in coming months. Still, it’s the highest of all major currencies tracked by Bloomberg.
“The weaker rand contributed positively to our mining and beneficiation clients,” Gouws said. “Volatility in the currency causes anxiety in the hearts and minds of many of our clients. It contributes to uncertainty, and it increases the levels of complexity of doing business.”
Source: Bloomberg News. For more information, click here.