Mohamed ElBaradei urges Egypt to boycott election

Former chief of the International Atomic Energy Agency, Mohamed ElBaradei, has urged Egyptians to boycott November's parliamentary election, saying it is certain to be rigged by the government. ElBaradei explained that taking part in the election would go against "the national will" to transform Egypt into a democracy.

ElBaradei has not yet said whether he will run for president in 2011. And it is still unclear who will succeed President Mubarak, nor whether Mubarak will seek re-election, but speculation has been mounting and many believe that he will try to install his son, Gamal, in the role if he decides to retire.

Shorty after his return to Egypt, in February, ElBaradei's National Coalition for Change launched a petition calling for constitutional changes and guarantees of free elections. The petition lists seven demands including allowing independents to run for president, and the lifting of the emergency laws that have been in place since 1981.

"We have gathered nearly a million signatures in six months and we can reach up to two to three million more by the end of this year," said ElBaradei on Monday.

In talking about the government ElBaradei said that the ruling National Democratic Party (NDP) has failed Egypt, and is responsible for rising poverty and illiteracy, and the disregard of human rights.

"When I look at the temple they built, I see a decaying temple, nearly collapsing. It will fall sooner rather than later. I will never enter this temple. What we call for is to bring down this temple in a peaceful civilised manner. If the whole population boycotts the elections totally, it will be in my view the end of the regime," concluded ElBaradei.

Source: BBC News

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

Iraq: Hung parliament poses security threat

Iraq's Oil and Electricity Minister Hussein al-Shahristani has expressed concern that the country's political deadlock poses a security threat. The minister said that insurgents are exploiting the absence of a new government, and are killing hundreds of people each month.

Hussein al-Shahristani said that bombers have been able to exploit political differences to carry out all manner of criminal activity. Only days ago 12 people were killed in a daylight raid by suicide bombers on an army base in Baghdad.

"The security could have been handled more firmly. Now the terrorists are hoping that by having these political differences they can penetrate through the cracks in the political system," said the minister.

Iraqi voters went to cast their votes on 7th March, but returned a hung parliament. Six months on, there is still no government and politicians are no closer to reaching a decision.

Source: BBC News

For more news and expert analysis about Iraq, please see Iraq Focus.

News Digest: Africa Mining Comment & Analysis – Botswana

The IMF yesterday 2nd September reported that following the contraction of 2009 and the country's first recession since independence, economic growth would be restored to 8 per cent -levels in 2010, driven by a recovery in diamond mining output. The release followed a presentation in Perth on 1st September by the Minerals, Energy and Water Resources Ministry outlining the government's plans to streamline licence and permit applications, and to drive greater local beneficiation and diversification.

Chris Melville, Africa mining consultant with Menas Associates today commented:

“With Botswana's mining industry now back on its feet, the government is once again raising the bar for other pretenders to its title as the most progressive and investor-friendly mining regime in Africa”.

“This is what mining investors like about Botswana - the government's dual commitment to a predictable regulatory framework while making gradual but concerted efforts to enhance the investment environment”.

“Despite Botswana's regular appearance at the top of indices for investment attractiveness in Africa, there is no resting on laurels. The economic crisis exposed Botswana's over-reliance on diamond production and the administration's promotion of diversification is to be welcomed, both from the perspective of the country's long-term economic health and in continuing to spark the interest of global mining companies”.

“As in many mining countries in southern Africa, mining companies face continued infrastructural and operational constraints – however, it is refreshing to see a government prepared to invest heavily to address these deficiencies”.

“Things may be looking a little dicey within the ruling BDP and recent high-level corruption scandals are a cause for concern. But these developments remain notable for their somewhat exceptional nature and it would be wrong to suggest that Botswana's economic and political miracle is under serious threat”.

Background

The Botswana economy contracted by 3.7 per cent in 2009 after the collapse in diamond prices saw multiple mine closures, double-digit declines in employment and significant falls in diamond output (which accounts for 70 per cent of revenues in the crucial mining sector). However, the investment environment continues to enjoy the favour of foreign investors, regularly appearing in the top places in surveys of investor sentiment: a 2010 Fraser Institute report ranked Botswana first among African countries for the attractiveness of its mining policies and 21st of the 72 jurisdictions surveyed.

President Ian Seretse Khama's authoritarian style of managing the ruling Botswana Democratic Party (BDP) is continuing to drive defectors into the arms of the opposition Botswana Movement for Democracy (BMD) splinter party, while Khama's cousin, former defence minister Ramadeluka Seretse was yesterday charged with failing to disclose shareholdings in a company that was awarded a government defence contract.

© 2010 Menas Associates

News Digest: Africa Mining Comment & Analysis – Zambia

In a letter to President Rupiah Banda, published in The Post on Tuesday 31st August, opposition leader Michael Sata reiterated his opposition to any introduction of windfall taxes on mining companies and committed himself to implementing a competitive low-tax regime if he wins the presidential election in 2011.

Chris Melville, Africa mining consultant with Menas Associates today commented:

“This completes a remarkable turnaround in Sata's approach to the mining sector. In 2006, he ran a populist campaign calling for the re-nationalisation of Zambia's mines and a much tougher line towards foreign investors".

“Today, his public statements are arguably more liberal than the self-avowedly investor-friendly ruling party. However, his 'Damascene conversion' is pure pragmatism – job losses during the economic crisis and the current government's likely reintroduction of windfall taxes have enabled him to couple populist demands for greater employment with support for foreign mining investment”.

“Sata's volte-face may be opportunistic and somewhat cynical, but his political antennae are working perfectly. The ruling MMD is showing its age and is struggling to keep up with the PF's continuous efforts to move the goalposts.”

“Having first raised the possibility of windfall taxes in an effort to win back PF voters in the Copperbelt, the government is now under-fire for threatening an industry just getting back on its feet. What this means for the election is as yet unclear, except that the campaign will be as polarising as ever”.
Background

Sata – a former fixer and campaign organiser for ex-president Frederick Chiluba – came a close second to Banda in the presidential election held in 2008 following the death-in-office of President Levy Mwanawasa, while the 2006 parliamentary election saw the Patriotic Front (PF) win nearly a third of all seats, and every single seat in the major Copperbelt towns. The ruling Movement for Multiparty Democracy (MMD) has been in power since 1991 and has been concerned by the gradual defection of its traditional Copperbelt/labour heartland to Sata and the PF.

© 2010 Menas Associates

IOCs and Nigerian Interagency Group wide apart

The refusal of the federal government's Interagency Group
to back down on its plans to use the Petroleum Industry Bill to change the measurement point for crude production for tax purposes has become one of the biggest bones of contention with the international oil industry.

Up to now, Nigeria has made the measurement point the same as the point of transfer for crude, i.e., the terminal. However, Tim Okon, general manager for strategy at the Nigerian National Petroleum Corporation (NNPC) and a leading figure in the Interagency team, has been insisting that it be moved to the point of production, i.e., the field.

The proposed change has massive consequences for the IOCs, in particular in the onshore environment. In effect it means they would be obliged to pay tax and royalties on sometimes substantial volumes of stolen crude that is drawn off between the field and the terminal. A source with one IOC says, 'A loss of 10 per cent is entirely possible and that could make the difference between whether you break even or not in Nigeria.'

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2010 Menas Associates

PK to pay damages to end Turgai dispute

Petrokazakhstan (PK), the 120,000 b/d producer which is 33 per cent owned by Kazmunaigas EP and 67 per cent by China National Petroleum Corporation (CNPC), has resolved a long-running legal dispute with Lukoil surrounding the Turgai Petroleum joint venture in which PK and the Russian giant are equal partners.

Under the settlement, which is based upon an arbitration ruling last year by the Stockholm Chamber of Commerce, PK will pay Lukoil damages of around $438 million to resolve a legal spat that dates back to PK's acquisition of a 50 per cent stake in Turgai Petroleum in 2005after PK was acquired by CNPC.

Lukoil filed a lawsuit claiming that it had pre-emption rights on the sale under the joint venture charter and this was backed up by the Stockholm court.

All the damages will be paid by CNPC. KMG EP, which had no role in the dispute, is absolved from any responsibility. In a statement, Lukoil said the settlement “represents the opening of a new relationship and further strategic cooperation” with CNPC, which is now the dominant foreign player in the Kazakh oil sector. Turgai Petroleum, which was established in 1995 as Lukoil-Kumkol, currently produces from the Kumkol oilfield. Most of the barrels are pumped east to China via the 920km pipeline which is jointly owned and operated by KMG and CNPC and will have its capacity doubled to 400,000 b/d by 2013.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2010 Menas Associates

Algiers governor and old Zerhouni ally 'to quit'

Mohamed Kébir Addou is to step down as governor (wali) of Algiers in the next local government reshuffle, according to the Tout sur l’Algérie (TSA) website. He is close to deputy prime minister Nourredine Zerhouni, and his departure could be a consequence of the weakened position of the former interior minister, according to TSA. On the other hand, Addou is retiring, and it could simply be a reflection of the fact that the older generation in Algerian politics is simply getting old.

Addou was installed as mayor of Algiers by Zerhouni in September 2004, and he was one of the most powerful mayors in Algeria. However, his record “was not brilliant”, says TSA, pointing out that the capital city experienced rising levels of insecurity, large numbers of protests over housing problems (especially in Diar Echems and Bab el Oued), sanitation problems, and “anarchy in the majority of sectors”. Unlike Rudi Giuliani in New York, it seems he was unable to turn the capital around.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2010 Menas Associates