As promised, here's the first round of the rejected capsules of the week, Nos. 1-3. Expect the second half of the list (Nos. 4-6) later in the week.
Rejected Capsule No. 1: Anti-Foreigner Attacks in South AfricaRising prices has already caused food riots in a number of developing countries. But in South Africa, the cost is sparking more than street protests. Over the past few weeks, the country has seen the worst bloodbath in years. In fact, South Africa hasn't seen such violent outbreaks since the days of Apartheid. Some are blaming poverty. Others see rising prices and the flood of immigrants into the country as the catalyst.
But no matter the cause, one thing's for sure: It needs to stop.
Several dozen people have already been killed and hundreds have been severely wounded because of mob violence. Chilling scenes of "necklaced" victims once again lie in the streets. The term "necklaced" refers to a rubber tire filled with gasoline that's thrown around victims' necks and lit ablaze. Several foreigners have been burned alive, while others have been stoned or beaten to death with rocks and clubs, respectively. Other rioters chose to kill victims with flaming boxes of matches.
Fearing the worst, more than 18,000 Mozambique natives fled South Africa for their home country. And 8 million-plus Zimbabweans are left with no place to go. Their home country is destitute, and they're largely unwelcome in neighboring Botswana, leaving them with little or no choice but to face the violence and hope they come out alive.
In the northern township of Alexandra alone, more than 5,000 people have fled in search of refuge at nearby community centers and police stations. Impoverished townships--slum-like settlements in underdeveloped urban areas--are now being patrolled by South African troops for the first time since anti-Apartheid street battles broke out in the 1980s. Township dwellers resent immigrants, particularly Zimbabweans who have fled crisis in their own country to seek employment in South Africa, because they're competition for public services and jobs in a region where employment is scarce. (Unemployment in the area is around 40 percent).
The police blame criminals for exploiting tensions over foreigners entering the country. But others blame the government. South African President Thabo Mbeki has come under fire for his failure to translate its market-friendly policies into changes in the townships' living conditions; for his non-confrontational policies toward Zimbabwe tyrant Robert Mugabe, who has run the country so far into the ground it's unlikely to ever recover its once-gleaming economy and reputation as the region's breadbasket; and for his overall inefficiency and incompetence as a leader.
People have lost hope, and they're turning toward violence as an answer. And it's likely to only escalate further because people can't see the change for which they voted. Fourteen years after the end of white rule, not much has changed, and South Africans aren't willing to wait any longer for a transformation that's still years--or even decades--away.
Rejected Capsule No. 2: Italian Oil Group Discovers Deposit in DRCItalian oil group
Eni has discovered a sizeable oil sands deposit in the Democratic Republic of the Congo (DRC). It's expected to become Africa's first largest unconventional oil development and could hold several billion barrels of oil.
The project is set to begin production in 2011 and will open a new front for unconventional oil sources. In the past, oil sands were considered too difficult or much too expensive to extract. However, now they're expected to provide an increasing proportion of the world's fuel supply in the future as conventional reserves deplete.
The world's largest-known heavy oil reserves are located in Canada's oil sands and Venezuela's Orinoco belt. Although the area Eni plans to develop is smaller-scale, it's still likely to have a significant impact.
Eni studied a 100-square-kilometer area that's estimated to hold between 500 million and 2.5 billion barrels of recoverable oil. The total area of Eni's license spans 1,790 square kilometers, which suggests that--in its entirety--it could hold more oil than Eni's total reserves of 7 billion barrels of oil equivalent.
The Eni deal, part of an energy package the company signed with DRC's capital city Brazzaville, also includes investment in conventional oil production, a new power plant that will supply 80 percent of the DRC's electricity and more than 270 miles of plantations to produce palm oil for food consumption and biofuels. The company is also investing in capturing the associated gas from its oil fields that's burnt off in flares, which it plans to use in the power plant and the heavy oil processing plants.
Although Eni has been present in the DRC since 1969, it's recently ramped up its interest with the $1.4 billion purchase of assets from France's
Maurel & Prom and $3.3 billion takeover of London-based
Burren Energy. In addition to its heavy oil project, Eni plans to invest another $3 billion in the DRC through 2011.
Rejected Capsule No. 3: Platinum Prices on the RisePlatinum prices could potentially surge an additional 15 percent over the next six months to reach $2,500 an ounce. The price has already surged 50 percent since January. Disruptions to production in South Africa, stemming from power outages that forced miners to cut operations, caused a severe decrease in supply this year.
Johnson Matthey, a chemicals and metals group, is forecasting more rises because of tight market conditions. Industry experts haven't seen such stress in the sector over the past 20 years. Global platinum output dropped 4.1 percent to 7.03 million ounces in 2007, creating a deficit that will likely widen as demand continues to outpace supplies this year.
Demand for platinum rose 8.6 percent in 2007. Combined with South Africa's lagging output, it's created the largest deficit since 2002. May 19, platinum traded at $2,175 an ounce-not far from its record high of $2,290 an ounce set back in March.
South Africa's platinum production accounts for about 80 percent of the world's output, but it's slowed 4.9 percent as a result of smelter closures and safety problems that interrupted mining operations. After electric supply issue plagued production earlier this year, the outlook for the remainder of the year remains uncertain.
But demand is expected to remain robust for the time being, boosted by the automotive and industrial sectors as well as investors clamoring into the precious metals market.
