09/02/2016 BBC Business Live


09/02/2016

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This is Business Live from BBC News with Ben Thompson

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As the biggest mining conference in the world gets

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underway today in South Africa - the big players are there -

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what will they decide at this critical time?

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Live from London, that's our top story on Tuesday 9th February.

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Digging deeper - leaders from the world's top mining

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companies gather in South Africa as their industry faces its biggest

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Also in the programme, more market turmoil as jitters

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about global economic growth batters Japanese stock markets.

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Investors across Europe are on alert - we'll make sense of the turmoil

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connecting with our teams in Asia and on Wall Street.

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And there's been another big selloff on global markets -

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we'll get the expert view on all you need to know.

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And we'll be getting the inside track on one African

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company that's riding the commodities rollercoaster

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and finding fertile ground to grow a business.

:01:13.:01:20.

And as the UAE appointed its First Minister of happiness, we want to

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know what other government jobs should be created. What do you want

:01:26.:01:28.

to be a minister of? Let us know. We're starting with commodities

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today as the global It's down to a slowing world

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economy, not least China, where demand for

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commodities is falling. As the biggest mining conference

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in the world gets underway in South Africa they're assessing

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the jobs cuts and falling You can see here just how

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the price of copper, gold and platinum all fared

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in the last 12 month. The industry has had

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to dramatically cut costs. South Africa - the world's largest

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platinum and manganese producer - could lose as many 32,000 jobs,

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according to the country's mining Not welcome news when

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the unemployment rate And mining firms have had

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to make huge write downs. South32, the mining group spun

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out of BHP Billiton, plans to write down $1.7 billion

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on the value of its assets everywhere from Australia

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to South Africa and Brazil. And it's also had a knock-on

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effect on currencies. As commodity prices slid in 2015,

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so did the currencies of most of the commodity

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producing countries. Take Brazil's Real, down 33%

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and the South African Rand, But one mining executive says

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there are opportunities to be had. Like everything in this modern

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world, there is always opportunities now to reposition, consolidates.

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These are times when new companies emerge, a new bunch of

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entrepreneurs, people with different ideas. That is the marvel of

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capitalism, when it is broke, there is always somebody who will come and

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fix it. That was Mark Bristow, the chief executive of one mining

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company. Neil Dwane, a mining analyst

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from at Allianz Global Investors, Nice to see you. Mark has reason to

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be cheerful, his company is doing very well. Does he have a point, in

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this type of environment, that is how capitalism is? There are great

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opportunities to be had? Yes, and I think because he is in the gold

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sector and there is little additional supply, he is in a unique

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position. If you are in the iron, copper or coal markets, like most of

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South Africa, you are computing in a global environment, your currency is

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very important to the competitiveness of your product. He

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is kind of saying, these are not my problems. We would expect the strong

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to get stronger. He is the boss of Arundel mining, he has been on this

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company many times. South Africa is in a particularly difficult session

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and in Cape Town, where the mining embargo is happening at the moment,

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it is very much on government minds that they get the right sentiment

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and the right deals during the conference? What we have seen in 20

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years has been a global boom in mining, people have not had to worry

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about making themselves attract because they wanted to supply China

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and the rest of the world with resources. Now the world has

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changed, it has become competitive. Many of the companies and many

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people like Mark Bristow, who are investing, with thing, what would

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Brazil or Australia offer us? They had to find the right balance

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between social stability and employment and making their economy

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attract for inward investment. I discuss job losses, the cuts in

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investment and the effect on mining firms. Will there be much sympathy

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for mining firms? They have had it so good for so long, we have seen

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record prices of most commodities in the last decade. You might say they

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should put rain away -- money away for a rainy day? Most companies have

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been well resourced, but the challenges up until 18 months ago

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were, of course, with the difficulties everybody wanted their

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share of the pie, the government, employees and shareholders all

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wanted it. But it now transpires that was the top for the industry

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and there is not enough money to go around. Capitalism in theory has a

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destructive as well as a creative side, when you build assets lasting

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25 or 30 years you can change your mind once you have made it, you are

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stuck with it for the disabled future.

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It is long-term investment. Thank you so much for coming in and giving

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as your opinions. We have a team in Cape Town, so when we hear anything

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more, we will tell you. Global markets have fallen

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again on persistent fears In Japan the main market -

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the Nikkei 225 - was down Shares in Australia

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are also down nearly 3%. It follows heavy losses

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on Wall Street and in Google's chief executive

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Sundar Pichai has become the best Last year, he earned stock

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options worth $199 million, taking his personal stake

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in the company to $650 million. Mr Pichai took the position as chief

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exec as part of the company's A public inquiry into fracking

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in the North West of England opens today after Lancashire Council

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rejected proposals by energy firm Cuadrilla to drill for shale gas

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at two sites in the county. But with oil prices falling,

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experts say the venture won't be In the US, many fracking companies

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are still struggling to make money with oil prices

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at just $35 a barrel. Lots of stories on Bbc Business Life

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online. This is a bit more detail on how things went in Japan. A very

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unusual day for market in Asia, most of them closed for the lunar New

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Year break. Only Japan and Australia were trading, they make a close down

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5.4% lower. Among the big losers were the big financial companies.

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But also clashes in Hong Kong as part of the lunar New Year

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celebrations, some local vendors decided to sell goods and did not go

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down well. As our Hong Kong corresponded points

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out, normally they would turn a blind eye to illegal traders in the

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streets, but this year they are getting tough and have cracked down,

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which sparked protests. And just a reminder, we want to know

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whether you have any thoughts about what government ministers should be

:08:45.:08:48.

created after the United Arab Emirates -- Emirate created a

:08:49.:08:55.

Minister for happiness. One said that he wanted a Minister for

:08:56.:09:01.

slashing and burning this size of government! Ministry without

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portfolio! Keep your comment is... Comments coming in at BBCBizLive.

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Our team in Singapore is looking at the twists and turns in Asia. Tim,

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tell us more about what went on in Japan? Virtually no share was

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unaffected as the benchmark Nikkei plummeted. It reflects broad

:09:28.:09:30.

concerns about the local economy, banks and rock ridges copied a

:09:31.:09:35.

severe beating. It also has to do with the yen, which investors tends

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to buy as a safe haven in times of uncertainty, today it went to its

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highest level since the -- against the dollar since 2014. Japanese

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government bonds were affected, yields sinking below zero for the

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first time. Much of the region is closed for Chinese New Year, but the

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indexes that are open tended to follow Japan peers lead and also

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fell, Australia, Thailand and the Philippines all closing down today.

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The Hang Seng is closed, the Nikkei file.

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-- fell. Those persistent worries in Europe about the global slowdown are

:10:29.:10:32.

affecting markets. A lot of debate about whether it is founded in any

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reality or if it is just the usual knee jerk reaction to any little bit

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of information? We will assess that in a moment with our guest Jeremy,

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that first what will make headlines in the United States?

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Let's get the latest from the US markets with Michelle Fleury.

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Wall Street will be jittery on Tuesday morning after the near

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router which took place on Monday, at one point the Dow Jones was down

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almost 401 points. Will betide any company that reports disappointing

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earnings, and there are lots of companies to look out for this

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Tuesday, among them Coca-Cola, which reports its full-year profits.

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Strong sales in the US are expected, but so is some weakness overseas

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caused by, you guessed it, the strong US dollar, the culprit that

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keeps coming back to haunt American companies. What Disney will get its

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first chance to feel the force in its accounts, I am talking Star

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Wars. Its first-quarter revenues are expected to get a boost from the

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latest Star Wars film, which took record amounts up the time of its

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release. The force continues to awaken!

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Joining us is Jeremy Cook, chief economist at World First.

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Jeremy, what a 24, 48-hour with yet again? A really, really bad start to

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the week. We thought with the lunar New Year, China being closed and a

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very good jobs number at the US on Friday that things on Monday morning

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would be quieter. After about an hour it just continue to get worse

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over the course of the day. The year of the monkey, I was talking to a

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colleague in Singapore, he said people are saying that the year of

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the monkey means volatility, lots of bugs and downs, twists and turns, it

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is happening? What is interesting yesterday was that the focus was

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firmly on the banks, particularly on Deutsche Bank. What is going on?

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There are lots of hallmarks of 2008? European banks were in focus,

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Deutsche Bank were right in the cross hairs. Investors might be,

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rightly or wrongly, believing they might not be able to repay some of

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their more volatile that is. We know the European banks in the UK have

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been hit quite hard from a litigation point of view over the

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last couple of years, income is also quite low at the moment, people are

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looking at the balance sheet is and going, can they stay in this? Hence

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the fears yesterday. Jeremy will look at some of the stories in about

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five minutes. Fertile ground to grow a business -

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African mining giant Cominco makes its money mining phosphates

:13:09.:13:12.

used around the world as fertiliser. We'll ask how easy it is to do

:13:13.:13:15.

business in Africa - and how technology is changing

:13:16.:13:17.

the way they operate. You're with Business

:13:18.:13:20.

Live from BBC News. Let's focus on the UK housing

:13:21.:13:28.

market. Housebuilder Redrow says profits

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jumped 14% in the last six Chairman Steve Morgan says

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it was an outstanding six months. Joe Lynam is following

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this story for us. Joe, we are all struggling with

:13:38.:13:48.

rising house prices but, once again, good news for those who build them?

:13:49.:13:57.

Pretty true. They are one of the big house-builders in the UK, Redrow,

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they had a record set of profits for the financial quarter we have just

:14:02.:14:06.

had, around ?104 million in pre-tax profits. They said they completed

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2178 homes, the completions are really important because that

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indicate how many homes they are able to build. In written it is a

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lot to do with planning permission, getting the land, getting it

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approved and developing a -- in Britain it is a lot to do with. The

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boss says he faces the problem of skills, getting the brickies,

:14:29.:14:33.

plumbers and construction experts on site to build these homes, as well

:14:34.:14:37.

as getting the land approved. Then there is the issue of affordability.

:14:38.:14:40.

There is a report from the Lib Dems political party claiming that the

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average price of a property in the UK by 2032, and we will all be a

:14:45.:14:51.

good bit older, will be over ?1 million. It is around quarter of ?1

:14:52.:14:56.

million now. It gives you an idea of how expensive properties will be. I

:14:57.:15:00.

spoke to chairman Steve Morgan today, he says the demand is huge

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and he can see the affordability issue coming into play for his

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company yet. This chart shows you that the company has done pretty

:15:09.:15:12.

well over the last year, but so have many home-builders as the helped to

:15:13.:15:13.

buy scheme comes into play. So you might think we are headed for

:15:14.:15:27.

a recession. The signs certainly suggest in some respects that we

:15:28.:15:31.

could be, but Goldman Sachs, the US investment bank, says no. There is a

:15:32.:15:34.

near zero risk of UK recession. This is a story in The Telegraph this

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morning. And it says, "Well, the stock market and credit tremors are

:15:41.:15:45.

sending off false signals." The Goldman Sachs report talks about the

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fact that the UK economy in the developed world at the moment is one

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of the strongest economies in terms of the fundamentals and how the

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economy is performing. So some positive news about the UK economy

:15:58.:15:58.

from Goldman Sachs. Global economic jitters fuels

:15:59.:16:03.

the worldwide sell-off. We look at the damage being wreaked

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on the mining industry. Now, we've talked already

:16:17.:16:24.

in the programme about the slump The African commodities giant,

:16:25.:16:27.

Cominco, is making money from mining And it's in demand from

:16:28.:16:35.

the agricultural industry, but can only be mined in the US,

:16:36.:16:44.

Africa and the Middle East. But with supplies in the US

:16:45.:16:47.

dwindling, and the Middle East frequently rocked by political

:16:48.:16:50.

tensions and security issues, Africa is the main

:16:51.:16:51.

focus for the firm. He's the Chief Executive

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for the African Company, Cominco that operates

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in the Republic of the Congo which neighbours the

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Democratic Republic of Congo. It is important we get that bit of

:17:00.:17:15.

ge geography right. You are from Australia slam and this particular

:17:16.:17:18.

company has been around for six years and it is specific to what

:17:19.:17:22.

you're doing in that part of Africa, but your history is mining in

:17:23.:17:26.

Australia, isn't it? Yes, I've built five mines in Australia and saw that

:17:27.:17:30.

the opportunities in Africa were much bigger and greater. So just

:17:31.:17:35.

tell us about your, how you dot to this point where you are now. I

:17:36.:17:40.

understand you were given a map and from that map, you kind of figured

:17:41.:17:45.

out there might be this massive phosphate opportunity... You're

:17:46.:17:49.

right, Sally. Talk us through it? Well, I was shown a hand drawn map

:17:50.:17:54.

six years which had a couple of dots on it where phosnate was known to

:17:55.:17:59.

occur. I thought if this is one large deposit under soil cover, it

:18:00.:18:02.

could be 50 kilometres long. The chances of that doing the case, are

:18:03.:18:06.

fairly slim, but it turns out to be true. We have used some amazing

:18:07.:18:14.

technology, built big databases using this software and able to

:18:15.:18:18.

quickly and cost effectively prove up the largest deposit of phosphate

:18:19.:18:23.

in the world. So in a six year period, since getting that hand

:18:24.:18:29.

drawn map, you have invested $50 million already? Yes. And now you

:18:30.:18:32.

are at the point where you can start digging up the stuff? Yes, that 50

:18:33.:18:36.

million, it sounds like a lot of money and it is, but for what we

:18:37.:18:39.

have got for it, it has been cost effective because we have done so

:18:40.:18:43.

much hi-tech work and this is the key for modern exploration and mine

:18:44.:18:46.

development now. It is big science and we've used this software to pull

:18:47.:18:54.

together satellite data, remote sensing and we have done aerial

:18:55.:19:01.

surveys which culminated in a precise geolocation. The first drill

:19:02.:19:09.

hold hit deposits and we have got the biggest deposit in the world. We

:19:10.:19:13.

look at pictures and we think of these huge mines with big mining

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machinery. That's changing and you're able to be more clever about

:19:19.:19:25.

how you do it. A long time ago, minerals occurred on the surface.

:19:26.:19:32.

These days, all major, there is few new discoveries of minerals because

:19:33.:19:35.

they are concealed by soil cover. You need to narrow the search using

:19:36.:19:41.

technology and if you try to find a worm under the field by sticking a

:19:42.:19:47.

knitting needle in the soil hoping it could come up covered in blood,

:19:48.:19:55.

you could wait a lifetime. We use imagery to look for geological

:19:56.:20:01.

structures and when we fin those we do surveys, the geophysical means

:20:02.:20:05.

can narrow the search down so by the time you come to do the expensive

:20:06.:20:08.

groundwork, you already know what you're looking for. So you've got,

:20:09.:20:13.

you know it's there, you've got the investment, you're a private company

:20:14.:20:15.

getting on with this, but you have to work with the Government, don't

:20:16.:20:22.

you? And you're going to create a village, becauser' going to hire

:20:23.:20:26.

1,000 people from the region, some of whom have never had That's

:20:27.:20:38.

On tomorrow's programme, Arnaud Vaissie will be here.

:20:39.:21:26.

He's the co-founder, chairman and Chief Executive

:21:27.:21:28.

of International SOS, the world's largest medical

:21:29.:21:31.

It provides medical and security services to staff working overseas

:21:32.:21:36.

He'll give us his take on the changing political

:21:37.:21:40.

and security landscape around the world.

:21:41.:21:41.

The travel group TUI says Turkish bookings have slump by 40%

:21:42.:21:44.

for this summer after the terror attacks in Turkey,

:21:45.:21:46.

Travellers are instead switching to less risky destinations

:21:47.:21:57.

Tui normally reports a loss in the winter months and makes most

:21:58.:22:01.

of its money in the summer, but in the last three months of last

:22:02.:22:04.

year it actually saw growth, as travel expert

:22:05.:22:06.

Egypt, and you could say the same about Turkey, a number of these

:22:07.:22:11.

destinations that have really come to prominence, a lot of investment

:22:12.:22:17.

into good quality hotel stock. So, they are a cheap destination for

:22:18.:22:24.

winter sun and a company like Tui need those destinations. For those

:22:25.:22:31.

destinations to be shutdown like Tunisia and Egypt or to suffer a

:22:32.:22:34.

drop of the kind of scale that we have seen in Turkey, 40% down,

:22:35.:22:36.

that's a huge drop. Let's take a quick look

:22:37.:22:46.

at the stories making business The Wall Street Journal looks

:22:47.:22:51.

at tech firms like Apple, Alphabet current push on technology

:22:52.:22:55.

that turns phones into digital keys. The National reports

:22:56.:22:59.

on the latest government shake up by Sheikh Mohammed bin Rashid,

:23:00.:23:04.

the ruler of Dubai, to prepare UAE It includes a Minister for

:23:05.:23:07.

Happiness. The Guardian quotes the UK's

:23:08.:23:13.

Transport secretary saying new runway will be built

:23:14.:23:15.

at Heathrow or Gatwick by 2030. The Telegraph reports

:23:16.:23:18.

Goldman Sachs' latest assessment of the UK economy saying the country

:23:19.:23:20.

is unlikely to face a recession Jeremy is here. A Ministry of

:23:21.:23:41.

Happiness? A fun place to work. Bean bags and sweets for everyone. It

:23:42.:23:48.

sounds Harry Potter. The Ministry of Happiness and minister of happiness.

:23:49.:23:56.

They have pioneered something talked gross national happiness as a way of

:23:57.:24:01.

seeing how the economy was looking and maybe this is a Harkining back

:24:02.:24:06.

to a more sentiment driven economy. We were asking you for your comments

:24:07.:24:15.

and you were suggesting a Minister for Speech. I was thinking about

:24:16.:24:19.

that, but I wasn't going to say it out loud. Now we have been outed.

:24:20.:24:27.

Wall Street Journal, tech world pushed towards a future without

:24:28.:24:32.

passwords. This would be fantastic. It drives me around the twist. We

:24:33.:24:37.

have to change ours every three months. It has to be lower case and

:24:38.:24:43.

a number. It is all the retailers, you maybe using, and all the clubs

:24:44.:24:46.

your kids are in and all the different things. It goes on and on.

:24:47.:24:51.

It happens as a kind of waterfall when you change devices, if you get

:24:52.:24:55.

a new phone, you get a new iPad and you have got to look into your

:24:56.:25:00.

Twitter, your Facebook, your John Lewis account, your Sainsbury's

:25:01.:25:06.

account. How will it work? Some phones, the newest iPhone, my new

:25:07.:25:09.

Sony, it is about the fingerprint. Does it work though? It does. Mine

:25:10.:25:16.

doesn't work. I have got a smart device that's supposed to recognise

:25:17.:25:21.

by thumb and it doesn't. What's wrong with your thumb? I do too much

:25:22.:25:27.

washing up, I think! A new runway, where will it be? It will be built

:25:28.:25:32.

by 2030, but that's so late. We are falling behind in the ranking of

:25:33.:25:37.

super powers. There was an interesting article over the weekend

:25:38.:25:41.

about how Istanbul is likely to become the new Dubai as far as a

:25:42.:25:45.

hub. We know how many flights now go through Dubai if they are going into

:25:46.:25:49.

Asia. The UK continues to sit there and not build then we're not going

:25:50.:25:53.

to be challenging that any time soon. Injury ram yu, thank you for

:25:54.:25:56.

being on the show. Good to have you with us. That's it from us. We will

:25:57.:25:58.

see you soon. Bye-bye. Hello there. Good morning. In those

:25:59.:26:19.

areas are that clearing up after Storm Imogen yesterday, today should

:26:20.:26:20.

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