Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Gold continues its upward climb,
Speaker 1: heading close to three thousand dollars per ounce, with many
Speaker 1: analysts thinking the only way is.
Speaker 2: Up tarif escalation by gold, their fizz by gold, cheer
Speaker 2: politics by gold.
Speaker 3: We also like having gold as a position in the
Speaker 3: alternative space.
Speaker 1: With Africa responsible for around twenty five percent of the
Speaker 1: world's total gold, will the continent start to see the
Speaker 1: benefits of the staring price.
Speaker 3: What we've got to do in the morning industry is
Speaker 3: catch up with the price of gold.
Speaker 4: We're a long term player.
Speaker 3: We invest heavily in growth, organic growth. We are pointing
Speaker 3: to a thirty percent increase in production.
Speaker 1: On today's podcast, we'll look at the impact the price
Speaker 1: of gold is having on the continent and why Zimbabwe's
Speaker 1: gold linked currency is just not able to keep up.
Speaker 1: I'm Jennifer Zabasanja and this is the Next Africa Podcast,
Speaker 1: bringing you one story each week from the continent, driving
Speaker 1: the future of global growth with the context only Bloomberg
Speaker 1: can provide. Later on, we'll hear from Mark Bristow. He's
Speaker 1: the CEO of Barrett Gold, Africa's biggest gold producer, but
Speaker 1: first to talk all things ZIG and Zimbabwe. I'm joined
Speaker 1: by Bloomberg's Ray and Lovu, who is in Bulawio and
Speaker 1: joining us back on the show. Ray, always great to
Speaker 1: get you on the show. Thanks so much for joining us.
Speaker 1: Can you first explain how Zimbabwe's currency, the ZIG, which
Speaker 1: we've talked about on the show before, is supposed to
Speaker 1: be linked to gold. This was meant to stop currency inflation, right.
Speaker 1: Has it actually panned out that way?
Speaker 2: It's really been a mixed bag in terms of its performance,
Speaker 2: particularly the fact that that was the key selling point
Speaker 2: that it's gold bagged. The idea of being gold bagged
Speaker 2: really is, as the central Bank has put it, gold
Speaker 2: is the main primary resource that's used to support and
Speaker 2: anchor the currency, including other precious minerals like diamonds and
Speaker 2: also cash foreign currency that's held by the central bank.
Speaker 2: So that's really the essence of it being gold backed
Speaker 2: in that sense. But I think in terms of the
Speaker 2: expectation that it would and the crisis that has been
Speaker 2: a common feature in Zimbabwe for the last few years,
Speaker 2: which we've seen with previous currencies, that really hasn't taken
Speaker 2: off as expected. So I think, you know, on the ground,
Speaker 2: a lot of people are beginning to question that actual claim.
Speaker 2: You know, that it's gold backed, but yet the currency
Speaker 2: has lost value and the currency has been unable to
Speaker 2: arrest inflation. In fact, they've been in the last quarter
Speaker 2: of the year, you know, sharp rise in inflation and
Speaker 2: pressures almost you know, inflation effect going back to double djil.
Speaker 2: So that already has really spilt a lot of doubt
Speaker 2: in the minds of ordinary citizens and also you know,
Speaker 2: among the business community about the claims of the currency
Speaker 2: being gold backed.
Speaker 1: Yeah, and ry happening at the same time, we've been
Speaker 1: watching over the past few days just gold continue to
Speaker 1: hit new records. If you take a look at you know,
Speaker 1: a chart on the terminal, it's close to topping three thousand.
Speaker 1: So you're saying the ZIG has not been able to
Speaker 1: get to those records in this similar way that we're
Speaker 1: seeing gold performing right now.
Speaker 2: Yeah, I mean, like you're pointing out. I looked as
Speaker 2: well at the charts for perspective, when the ZIG was
Speaker 2: launched on April five, up to date, it's lost about
Speaker 2: ninety five percent of its value against the US dollar.
Speaker 2: In the same period of time from April five up
Speaker 2: to date, you know, gold has risen some twenty four percent,
Speaker 2: so there's been no correlation between the movement of the
Speaker 2: gold price and the rally that we're seeing in the
Speaker 2: markets and essentially the performance of the currency. In fact,
Speaker 2: in September last year, we saw the Zig being devalued
Speaker 2: by forty three percent by authorities in an attempt to
Speaker 2: try and stabilize it because you know, it was really
Speaker 2: losing value. So I think that disconnected has been clear
Speaker 2: that there are other factors that move this marveling currency,
Speaker 2: and essentially it's not gold. And what we've seen is
Speaker 2: that the irony has been that gold back currency, which
Speaker 2: is the Zig, you know, is missing out on this
Speaker 2: gold rarely. So there are other factors which really are
Speaker 2: affecting the exchange rate and affecting the currency beyond just
Speaker 2: the gold price.
Speaker 1: What are those other factors ray.
Speaker 2: So one of the things that we've in our conversations
Speaker 2: with investors and market managers in the country has been
Speaker 2: money supply. They point out to a very tight liquid
Speaker 2: discrease in the economy right now, the economy since the
Speaker 2: devaluation of the currency last septem the central bank it's
Speaker 2: benchmark interest rate to thirty five percent from twenty percent
Speaker 2: to deal with excessive liquidity in the market, and that
Speaker 2: really creamed money supply in the economy, so there's generally
Speaker 2: a very very thin volumes of zek liquidity. We've seen
Speaker 2: really the business environment becoming very very difficult because companies
Speaker 2: are struggling bying large to conduct commerce in light of
Speaker 2: very stringent liquidity circumstances. So the consensus really then has
Speaker 2: been that money supply is what drives the exchange rate
Speaker 2: in Zimbabwe.
Speaker 1: Is there anything that the officials that you speak to
Speaker 1: ray the central Bank, the finance minister, is there anything
Speaker 1: that they can do at this point then to reassure
Speaker 1: investors because this should be a correlation, right, you know
Speaker 1: what what can they do now?
Speaker 2: I think the position from both central bank and treasury
Speaker 2: officials that we speak to is that they are keen
Speaker 2: to maintain this type monetary policy stance and the tight
Speaker 2: fiscal policy position at the moment. There's no indication at
Speaker 2: all of easing of conditions. I think the fear definitely
Speaker 2: that they have is there will be a run on
Speaker 2: the exchange rate, the currency will depreciate, that will fan inflation.
Speaker 2: So it's almost you know, a situation where they are
Speaker 2: just keeping everything on hold, and you know, even if
Speaker 2: it's at the expense of the economy and commercial activity
Speaker 2: and so forth. You know, the end game and in
Speaker 2: their view, the greater good is that the is stability
Speaker 2: that's been experienced in the markets. There's no volatility, there's
Speaker 2: no shop spike in inflation, the things which many wings
Speaker 2: for years they've grappled with. So companies now really need
Speaker 2: to begin to relook and rethink, you know, in terms
Speaker 2: of their workforce, in terms of pay issues, because you know,
Speaker 2: this tight position is going to remain.
Speaker 1: And they're still sticking by the ZIG as far as
Speaker 1: you know.
Speaker 2: Yeah, the ZIG definitely has not been abandoned by authorities.
Speaker 2: It remains in circulation and remains supported by authorities. What
Speaker 2: obviously remains in doubt is at least its existing side
Speaker 2: by side with the US dollar because naturally the preference
Speaker 2: has always been to use dollars by and large. The
Speaker 2: message and communications, that's acceptance on none. You know, the
Speaker 2: ZIG is here to stay.
Speaker 1: Thanks so much. Ray, that's our Bloomberg reporter Ray in Lovo,
Speaker 1: who is in Bulawayo in Zimbabwe, and stick with us
Speaker 1: when we come back. Well, hear from one company that's
Speaker 1: bullish about the benefit for Africa of a high gold price.
Speaker 1: Part of my interview with Barrett Gold CEO Mark Bristow
Speaker 1: is after the break, we'll be right back. Welcome back. Today.
Speaker 1: We're talking all things gold as global trade wars seem
Speaker 1: to be helping push the commodity up closer and closer
Speaker 1: towards the three thousand dollars mark. South Africa's annual mining conference,
Speaker 1: Mining in Daba, was held along the backdrop of this
Speaker 1: gold rally. I spoke with Mark Bristow, the CEO of
Speaker 1: Barrett Gold, the largest gold producer in Africa, and I
Speaker 1: asked him about the state of the gold mining industry
Speaker 1: in Africa. But first I wanted to know how high
Speaker 1: he thought gold could go.
Speaker 3: Everyone's trying very hard to push the gold pros up.
Speaker 3: What we're seeing as a continuation of d dollarisation fueled
Speaker 3: by the actions coming out of Washington.
Speaker 4: And on top of.
Speaker 3: That, you know, we've got challenges in the UK. Europe
Speaker 3: is not in good place, with the French and the Germans,
Speaker 3: you know, the leaders of the Free World all in
Speaker 3: the crossis and of course Middle East and conflicts in
Speaker 3: every continent so gold price has got a lot of upside. Still,
Speaker 3: I always say the risk is the upside, and it's
Speaker 3: very much intact that trend.
Speaker 1: How much further do you think it has to go?
Speaker 1: Because some people believe potentially we've peaked.
Speaker 3: You know, everyone has been saying that you've seen in
Speaker 3: the equities have been softer than the actual bullion press
Speaker 3: over twenty twenty four. But I don't think so. And certainly,
Speaker 3: I mean there's a lot of reason why the gold
Speaker 3: parcus shouldn't go down if you try and look at
Speaker 3: what it's going to take for us to get back
Speaker 3: to normality in the global economy today.
Speaker 4: It's not an easy task.
Speaker 3: And I think we've seen damage to the US dollar
Speaker 3: as a reputational currency and gold has taken that place normalized.
Speaker 1: What does that mean for Barrack's assets then, and especially
Speaker 1: on the African cors.
Speaker 3: All the assets are very valuable, whatever assets you've got,
Speaker 3: particularly if you're in gold and copper today.
Speaker 1: To exit any of the operation definitely not okay.
Speaker 3: No, we constantly look at our call as sets because
Speaker 3: I'm very focused on high quality tier one assets and
Speaker 3: so there's there's a tie and there's a market for
Speaker 3: those non core assets. But we're you know we've been.
Speaker 3: We're a long term player. We invest heavily in growth,
Speaker 3: organic growth. We we are pointing to a thirty percent
Speaker 3: increase in production by the end of this decade, organic.
Speaker 4: Growth at all of your operations.
Speaker 3: Across the group and that and that's going to happen
Speaker 3: without any issuing of shares.
Speaker 4: In fact, we're buying back shares.
Speaker 1: So when are you going to start buying back shares?
Speaker 4: We have already started.
Speaker 1: Do you plan to continue doing that?
Speaker 3: That abolutely certainly where the chap Rus is sitting at
Speaker 3: the moment, one of the best investments we can make
Speaker 3: is buy back our own share.
Speaker 1: What do you think where do you think the share
Speaker 1: price then has to go?
Speaker 4: I think the shap well it's.
Speaker 1: Going to go up, okay, yes, But then what is
Speaker 1: your calls then for that?
Speaker 3: You know that's the market will judge that. And at
Speaker 3: the end of the day, what we've got and we're
Speaker 3: about to bring out our twenty twenty four results. We
Speaker 3: have one of the strongest balance sheets in the industry.
Speaker 3: We were able to buy back our shares and re
Speaker 3: investing all the time in new opportunities and more importantly,
Speaker 3: we're about to build out two really big mining projects,
Speaker 3: the expansion in Zambia, doubling production and then the big
Speaker 3: gold and copper asset in Pakistan, which is one of
Speaker 3: the biggest gold and copper minds that haven't been developed
Speaker 3: yet in the world.
Speaker 1: And Mark, I also want to talk to you about
Speaker 1: another one of your operations that's in Mali. There's been
Speaker 1: a lot of focus on what's happening the discussions between
Speaker 1: the Mali and government and also Barrick where what is
Speaker 1: the next shoot to drop? Where are we at right
Speaker 1: now in negotiations.
Speaker 4: You know, Jennifer, it's been a very sad time for me.
Speaker 3: You know, I've been in Mali since it was really
Speaker 3: re established as a democracy, and we said, I've worked
Speaker 3: with any many all the governments since nineteen ninety two,
Speaker 3: and I think we've Mini's got itself in a position where,
Speaker 3: you know, it's really try to shake out some short
Speaker 3: term cash out of the industry, and this industry is
Speaker 3: the very foundation of its economy, and I think we
Speaker 3: need to and so communication, to your point, is really important.
Speaker 4: We are in communication.
Speaker 3: We are working every and were making progress, not as
Speaker 3: fast as I would expected but I'm sure everyone's a
Speaker 3: little cautious, because that's what happens when you get on
Speaker 3: the wrong side of everyone.
Speaker 1: We haven't agreed to a number to paying back.
Speaker 3: Any of what, we haven't reached an agreement on anything yet,
Speaker 3: but we are making progress and I think that's the
Speaker 3: that's the positive.
Speaker 1: And that was Barrett Gold CEO Mark Bristow speaking with
Speaker 1: us at mining in Daba. And thanks so much to Mark,
Speaker 1: and also Bloomberg's Rate and Lovu for joining us on
Speaker 1: today's podcast. And don't forget you can read all of
Speaker 1: our coverage on gold and all commodities, including rays reporting
Speaker 1: across Bloomberg platforms. Now here's some of the other stories
Speaker 1: we've been following across the region this week. Namibia's central
Speaker 1: bank chief has warned that escalating tensions between the US
Speaker 1: and South Africa could destabilize its economy, citing the close
Speaker 1: ties it has with the two nations and the vulnerability
Speaker 1: of the Namibian dollar, which is pegged to the rand.
Speaker 1: President Donald Trump, in a February seventh executive order, froze
Speaker 1: all usaid to South Africa over what he falsely claimed
Speaker 1: were rights violations stemming from a new land expropriation law
Speaker 1: and for South Africa's case in the International Court of
Speaker 1: Justice alleging Israel's assault in the Gaza Strip was an
Speaker 1: act of genocide. And Ghana's Special Prosecutor has declared former
Speaker 1: Finance Minister ken Oforiata a wanted person after he failed
Speaker 1: to meet with authorities to answer questions over alleged wrongdoing.
Speaker 1: Ofori Ata, who held the position for seven years from
Speaker 1: twenty seventeen, was replaced as minister last February by former
Speaker 1: President Nana Akufu Adu. And you can follow these stories
Speaker 1: across Bloomberg, including the Next African Newsletter. We'll put a
Speaker 1: link to that in the show notes. This program was
Speaker 1: produced by Adrian Bradley. Don't forget to follow and review
Speaker 1: this show wherever you usually get your podcasts. I'm Jennifer Zabasoja.
Speaker 1: Thanks as always for listening. We'll see you next time.