Diamonds not forever: Rio Tinto may sell business

Diamond

(Reuters) - Rio Tinto (RIO.AX), the world's third-largest miner, effectively invited bids on Tuesday for its diamonds business, on its books at $1.2 billion, and joined rival BHP Billiton (BHP.AX) in backing away from a business that has lost its sparkle.

Rio Tinto (RIO.L), which runs three mines in Australia, Canada and Africa, said it was reviewing its diamond business and would consider selling it, as it focuses on expanding in more profitable commodities such as iron ore, copper and uranium.

Its diamond business - the 100 percent-owned Argyle mine in Australia, famous for its pink diamonds, as well as 60 percent-owned Diavik mine in Canada and 78 percent-owned Murowa mine in Zimbabwe - could come on the market at the same time as BHP Billiton (BLT.L) tries to sell its Ekati diamond mine in Canada.

"We have a valuable, high quality diamonds business, but given its scale we are reviewing whether we can create more value through a different ownership structure," Rio Tinto's diamonds and minerals CEO Harry Kenyon-Slaney said in a statement.

Rio Tinto's diamonds business could fetch around $2 billion, estimated one industry analyst, who declined to be named as he is not the lead analyst on the company.

It could attract the same bidders in the running for BHP's Ekati diamond mine stake, including private equity firm KKR (KKR.N) and luxury jeweler Harry Winston (HW.TO), which already has a 40 percent stake in Rio's Diavik mine.

A drop in diamond prices since July, knocked by Europe's downturn, has hit sentiment towards the sector, but the longer-term dynamics for the industry are looking up, with India and China expected to drive longer-term growth in demand.

NO CARTEL REVIVAL

Rio mined 11.7 million carats of diamonds last year, about a third of the amount dug up by each of the world's top two producers, Russia's state-owned Alrosa and De Beers.

Alrosa produces 24 percent of the world's diamonds, De Beers 21 percent, and Rio and BHP about 7 percent each.

Rio and BHP's exit from diamonds is unlikely to resurrect the diamond cartel they broke up a decade ago when they refused to sell their diamonds through De Beers, as the South African giant is now owned by global miner Anglo American (AAL.L).

"I'm not sure that's a way De Beers wants to go, or they are the right buyer to snap it up," said David Lennox, an analyst with broker Fat Prophets in Sydney.

Rio's diamonds assets would not be big enough anyway to enable De Beers to rebuild its cartel.

"Besides, if that appeared to be De Beers intention, I'd expect to see flags go up from anti-competition regulators," said Lennox.

For Rio, the business last year accounted for less than 0.1 percent of group net earnings, slumping 86 percent to just $10 million on revenue of $727 million.

The open-pit Argyle mine, undergoing a $2.1 billion expansion underground, is the largest diamond producer in the world by volume and the largest source for pink diamonds, though only 0.1 percent are actually considered pink.

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U.S. to unveil "more realistic" plan for military

Barack Obama, US President

(Reuters) - The Obama administration will unveil a "more realistic" vision for the military on Thursday, with plans to cut tens of thousands of ground troops and invest more in air and sea power at a time of fiscal restraint, officials familiar with the plans said on Wednesday.

The strategic review of U.S. security interests will also emphasize an American presence in Asia, with less attention overall to Europe, Africa and Latin America alongside slower growth in the Pentagon's budget, the officials said.

Though specific budget cut and troop reduction figures are not set to be announced on Thursday, officials confirmed to Reuters they would amount to a 10-15 percent decline in Army and Marine Corps numbers over the next decade, translating to tens of thousands of troops.

The most profound shift in the strategic review is an acceptance that the United States, even with the world's largest military budget, cannot afford to maintain the ground troops to fight more than one major war at once. That is a move away from the "win-win" strategy that has dominated Pentagon funding decisions for decades.

The move to a "win-spoil" plan, allowing U.S. forces to fight one campaign and stop or block another conflict, includes a recognition that the White House would need to ramp up public support for further engagement and draw more heavily on reserve and national guard troops when required.

"As Libya showed, you don't necessarily have to have boots on the ground all the time," an official said, explaining the White House view.

"We are refining our strategy to something that is more realistic," the official added.

President Barack Obama will help launch the U.S. review at the Pentagon on Thursday, and is expected to emphasize that the size of the U.S. military budget has been growing and will continue to grow, but at a slower pace.

Obama has moved to curtail U.S. ground commitments overseas, ending the war in Iraq, drawing down troops in Afghanistan and ruling out anything but air power and intelligence support for rebels who overthrew Libyan leader Muammar Qaddafi.

The number of U.S. military personnel formally assigned to bases in Europe - including many now deployed in Afghanistan - is also set to decline sharply, administration sources said, while stressing that the final numbers have not been set.

'BASICALLY DISAPPEAR'

"When some army brigades start coming out of Afghanistan, they will basically disappear," one official said.

Many of the key U.S. military partners in the NATO alliance are also facing tough defense budget cuts as a result of fiscal strains gripping the European Union.

The president may face criticism from defense hawks in Congress, many of them opposition Republicans, who question his commitment to U.S. military strength.

Defense Secretary Leon Panetta and General Martin Dempsey, chairman of the military's Joint Chiefs of Staff, are set to hold a news conference to flesh out the contents of the review after Obama's remarks, which are also expected to stress the need to rein in spending at a time when U.S. budgets are tight.

White House spokesman Jay Carney said that the defense cuts stemming from an August debt ceiling deal - worth about $489 billion over 10 years - need to be enacted carefully.

"The president made clear to his team that we need to take a hard look at all of our defense spending to ensure that spending cuts are surgical and that our top priorities are met," Carney told reporters this week.

The military could be forced to cut another $600 billion in defense spending over 10 years unless Congress takes action to stop a second round of cuts mandated in the August accord.

Panetta spent much of Wednesday afternoon briefing key congressional leaders about the strategic review. Representative Adam Smith, the senior Democrat on the House of Representatives Armed Services Committee, said after speaking to Panetta that the review was an attempt to evaluate U.S. strategic priorities for the future rather than identify specific budget reductions.

Maintaining a significant presence in the Middle East and Asia, especially to counter Iran and North Korea, was a leading priority in the review, Smith said. So was making sure that military personnel are sufficiently cared for to guarantee the effectiveness of the all-volunteer force. Reductions in the size of U.S. forces in Europe and elsewhere are a real possibility, he said.

Pentagon spokesman Navy Captain John Kirby said with the military winding down a decade of war in Afghanistan and Iraq, it is appropriate to re-evaluate the role of U.S. forces abroad.

"From an operational perspective it's ... an opportune time to take a look at what the U.S. military is doing and what it should be doing or should be preparing itself to do over the next 10 to 15 years," he said on Wednesday.

"So, yes, the budget cuts are certainly a driver here, but so quite frankly are current events," Kirby said.

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Breast Cancer Facts and Figures

Breast Cancer

• Breast cancer is the most commonly diagnosed cancer in women
• The risk of breast cancer increases with age and if you live to 90 years your risk of developing this cancer is almost 14%
• 1.7 million breast cancers were diagnosed worldwide in 2007
•  465,000 (approx.) women died due to breast cancer in 2007
• North America, Australia, Europe have the highest incidence of breast cancer
•  Large parts of Africa and Asia have the lowest rates
• In the last 25 years it incidence has gone up by 30% in the western world
•  Increased risk of developing breast cancer include -
• Start of menstrual period at an early age
•  Menopause later in life 
• Having a first or second degree relative with breast cancer
• Obesity
• Consumption of alcohol
• Never having children
• Using contraceptives
• Using hormone replacement therapy during post-menopausal years
• Certain inherited genetic mutations for breast cancer (BRCA1 and/or BRCA2)
• Decreased Breast cancer Risk -
• Breast feeding
• Moderate Physical activity
• Maintaining normal weight
• Stop smoking
• Breast cancer can be prevented by screening
• Early treatment can increase chances of 5 years survival to 98%
• Women with a BRCA mutation who get their ovaries surgically removed can reduce their risk of breast cancer by over 50%.
• A study from North Carolina State University indicated that Women who performed the act of fellatio and swallow semen regularly (one to two times a week) may reduce their risk of breast cancer by up to 40 percent !!

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Islamists seen as winners in Egypt election

Vote Counting in Egypt

(Reuters) - Egypt's ruling military painted a dire picture of the economy on Thursday as election officials delayed releasing results of a landmark parliamentary poll that Islamist parties looked set to win, saying votes were still being counted.

They said first-round results would be declared on Friday, a day when youthful protesters demanding an immediate end to army rule have called a rally in Cairo's Tahrir Square to remember the 42 people killed in clashes with riot police last month.

Egyptians voting freely for the first time since army officers ousted the king in 1952 seem willing to give Islamists a chance. "We tried everyone, why not try Sharia (Islamic law) once?" asked Ramadan Abdel Fattah, 48, a bearded civil servant.

Islamist success at the polls in Egypt, the most populous Arab nation, would reinforce a trend in North Africa, where moderate Islamists now lead governments in Morocco and post-uprising Tunisia after election wins in the last two months.

Parliament, whose exact makeup will be clear only after Egypt's staggered voting process ends in January, may challenge the power of the generals who took over in February after a popular uprising toppled Hosni Mubarak, an ex-air force chief.

The army council, under growing pressure to make way for civilian rule, has said it will keep powers to pick or fire a cabinet. But the head of the Muslim Brotherhood's party said this week the majority in parliament should form a government.

The poll results had been expected on Thursday, but some constituencies had not completed their counts.

In an alarming revelation, an army official said foreign reserves would plunge to $15 billion by the end of January, down from the $22 billion reported by the central bank in October.

Mahmoud Nasr, financial assistant to army chief Field Marshal Mohamed Hussein Tantawi, told a news briefing that a widening budget deficit might force a review of costly subsidies, especially on petrol, to save money.

The economic crunch has forced the Egyptian pound to its lowest level in nearly seven years after tourism and foreign investment collapsed in the turmoil since Mubarak's overthrow.

The world is closely watching the election, keen for stability in Egypt, which has a peace treaty with Israel, owns the Suez Canal linking Europe and Asia, and which in Mubarak's time was an ally in countering Islamist militants in the region.

Washington and its European allies have urged the generals to step aside swiftly and make way for civilian rule.

GAINS FOR ISLAMISTS

Western powers are coming to accept that the advent of democracy in the Arab world may bring Islamists to power, but they also worry that Islamist rule in Egypt might erode social freedoms and threaten Cairo's 1979 peace treaty with Israel.

The Muslim Brotherhood, Egypt's oldest Islamist group, says its new Freedom and Justice Party (FJP) is set to win about 40 percent of seats allocated to party lists in this week's vote, which passed off peacefully, albeit with many irregularities.

FJP officials say the party also leads the race for individual seats that make up a third of the total in the poll.

Al-Nour Party, one of several newly formed ultra-conservative Salafi Islamist groups, said on Thursday that it expects to pick up 20 percent of assembly seats overall.

"In light of the media campaign against us, we believe our results are largely acceptable," said Youssry Hamad, Nour's spokesman. "We are doing as well as the Muslim Brotherhood."

The liberal multi-party Egyptian Bloc has said it is on track to secure about a fifth of votes for party lists.

"For the first time in Egypt we don't see a political intention by the state to forge the elections," said Magdy Abdel Halim, coordinator of an EU-backed group of election monitors.

He said the infractions observed did not affect the legitimacy of a vote held in a "reasonably fair atmosphere."

Egypt's April 6 youth movement, a prime mover in the revolt against Mubarak, said an Islamist win should not cause concern.

"No one should worry about the victory of one list or political current. This is democracy and this great nation will not allow anyone to exploit it again," its Facebook page said.

If the FJP and Nour secure the number of seats they expect, they could combine to form a solid majority bloc, although it is far from certain the Brotherhood would want such an alliance.

Senior FJP official Essam el-Erian said before the vote that

Salafis, who had kept a low profile and shunned politics during Mubarak's 30-year rule, would be "a burden for any coalition."

The FJP might seek other partners, such as the liberal Wafd or the moderate Islamist Wasat Party, set up by ex-Brotherhood members in 1996, although only licensed after Mubarak's fall.

Nour Party spokesman Hamad said solving Egypt's problems might be beyond one party. "We believe a coalition government that comprises all political streams is the best option. The burden is too much after all these years of corruption."

PERILS OF DEMOCRACY

Some Egyptians fear the Muslim Brotherhood might try to impose Islamic curbs on a tourism-dependent country whose 80 million people include a 10 percent Coptic Christian minority.

Ali Khafagi, the leader of the FJP's youth committee, said the Brotherhood's goal was to end corruption and revive the economy. Only a "mad group" would try to ban alcohol or force women to wear headscarves, he said.

The priority of the Brotherhood, which gained trust by aiding the poor under Mubarak, is likely to be economic growth to ease poverty and convince voters they are fit to govern.

Essam Sharaf's outgoing government quit during protests against army rule last month in which 42 people were killed, most near Cairo's Tahrir Square, hub of the anti-Mubarak revolt.

Kamal al-Ganzouri, asked by the army to form a "national salvation government," aims to complete the task in the next day or two, but acknowledged on Wednesday that five presidential candidates had turned down invitations to join his cabinet.

Protesters who returned to Tahrir last month, angered by the military's apparent reluctance to cede power, say the generals should step aside now, instead of appointing a man of the past like Ganzouri, 78, who was a premier for Mubarak in the 1990s.

Mohamed Taha, 46, an accountant who supports the liberal Egyptian Bloc, said the election showed that young activists had failed to present a viable program. "Their revolution was stolen and they are stuck searching for who stole it," he said.

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In Vote in Morocco, Many Stay Skeptical

Vote in Morocco

CASABLANCA, Morocco — Yassine Bousalim, a 26-year-old chef from the poor neighborhood of Derb Sultan, where lingering smells of garbage fill the air, watched voters come and go on Friday from the polling station across the street, with an air of disgusted detachment.

“I won’t go and vote,” he said. “I just don’t think anything will come out of this.”

Mr. Bousalim is among the many young and disenchanted Moroccans who chose not to vote in their country’s first parliamentary elections since the passage of a new Constitution last year. That document, an effort by King Mohammed VI to respond to local and regional unrest during the Arab Spring, was approved in July. It gives more powers to Parliament and the prime minister, but preserves most of the king’s prerogatives, including absolute control over military and religious issues.

“Corruption is too big,” said Mr. Bousalim, one of about 57 percent of the 13.5 million eligible voters who are under the age of 35. “Each time we are confronted to an institution, we want to be treated with respect,” he said. Results are expected Saturday.

In contrast to Tunisia, where millions flooded to the polls to vote last month on the first free elections after the overthrow of President Zine el-Abidine Ben Ali, the turnout here is expected to be lower. Still, this election is being watched closely as a significant and calibrated step toward democracy. The Tunisian elections were won by the main Islamist party, Ennahda.

The Interior Ministry said that by 5 p.m., two hours before polls closed, about 34 percent of registered voters had cast ballots.

But the change here may still be significant. The Islamist Justice and Development Party (PJD) is expected to do well, it could even become the country’s largest party and, in a coalition government, provide the next prime minister, who will have the power to appoint ministers and dissolve Parliament.

“We believe that we will be the No. 1 party,” said Abdelilah Benkirane, the PJD’s general-secretary in an interview. “Therefore the prime minister will be from our party,” he said.

The PJD was founded in 1998 and is the largest opposition party, with 47 seats in Parliament. It has broadly appealed to Morocco’s large numbers of poor voters by focusing on economic and social issues. It has paid attention to the success in Turkey of the governing AK Party, which has fused religion and modern politics.

“They want the best for the country,” said Iman Bajebour, 20, who took a break from her work as a nurse to cast a ballot for the PJD in Derb Gharaf, a poor neighborhood here. “From my prospective, the PJD will fight corruption,” she said.

But some Moroccans are nervous that the party would back anti-Western policies if brought to power. Last week, the French-language weekly “Tel Quel” splashed the headline, “Morocco will be Islamist,” across its cover.

Other main contenders out of the many parties seeking seats include the Party of Authenticity and Modernity (PAM), created in 2009 out of several smaller parties by a close friend of the king, and Istiqlal, the historic party of independence, founded in 1944, and currently in power.

For some Moroccans voters, though, the elections could consolidate the king’s recent democratic push.

“I think it is the duty of citizens to come and vote,” said Marwan Sayarh, a 30-year-old businessman who voted for the first time. “Morocco is becoming more democratic and I want to support it.”

The country’s loyalty to King Mohamed VI, who has been in power since 1999 and has responded this year to calls for democratic change, contrasted with the revolts against secular nationalist governments in Egypt and Tunisia.

“We are on a path of continuity, mobilization, and of coherence,” said Salaheddine Mezzouar, the country’s finance minister and head of the moderate RNI party, a prominent political force in the country. Some commentators have speculated that he could be prime minister.

Analysts say that given Morocco’s complex proportional electoral system and the few requirements for aspiring candidates and parties — there are 5,873 candidates from more than 30 parties — it is unlikely that one party would emerge with a majority.

But discontent toward the political elite is real among voters here, and some social activists have called for a boycott of the vote. The February 20 Movement for Change, which led the protests against the government this year, is urging its supporters not to vote.

Mr. Bousalim, the chef, said he was tempted to join the February 20 movement because “they would really help.” But he fears police retaliation, which according to Human Rights Watch, detained more than 100 of its members since October to question them about the distribution of pro-boycott leaflets or other activities.

The February 20 movement is a hybrid and youthful coalition of students, independents, leftist activists and Islamists. It has held regular demonstrations and played a key role in pushing reforms and orchestrating protests against political corruption. It favors a constitutional monarchy, in which the king reigns but does not rule. But Morocco is conservative and the monarchy has deep roots, and the February 20 movement has been criticized outside the large cities.

The movement has denounced the king’s reforms as insufficient and argues that the new Constitution in fact reinforces the king’s prerogatives. Parliamentary elections would bring another corrupt assembly to power, they say.

Fouad Abdelmoumni, an economist and a leading coordinator of the movement, said that the king “still has the main authority in his hands.”

“The conditions for democracy are not there,” he said. 

News by NYTimes


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