The arguments are well rehearsed about whether the big banks are doing enough to support the mainstay of the economy by lending to small and medium-sized enterprises (SMEs). Indeed last week, this column considered whether the state-backed Royal Bank of Scotland (RBS) is doing enough.
RBS claims it is doing its best, despite continually being birched by small business groups and the Government, for whom a bit of bank-bashing never did any harm.
Luckily for RBS, the attention is now likely to switch to its rival, Barclays. The bank's head of small businesses, Steve Cooper, said last week that Barclays would not be signing up to any Government lending targets, which, it has to be said, have not yet even been implemented.
The Government has lending targets in place for the taxpayer-backed RBS and Lloyds Banking Group, but in response to a question recently, Vince Cable, the Secretary of State for Business, said that he was considering extending the targets to those banks that have not received direct state support.
Mr Cooper said that he did not want to be in a position where he was perceived to be leaving the door ajar for those businesses that Barclays had previously refused. He also defended increases in lending rates, which can climb to as high as 20 per cent, saying that the banks are facing increased funding costs and tougher capital requirements. Two weeks ago, Barclays announced that first-half adjusted pre-tax profits had increased by 22 per cent, to £3bn.
Mr Cooper's comments do appear to be an opening salvo in what could become something of a scrap with the Government.
A spokesman for the Department for Business last week said: "It is crucial for the recovery that small businesses are able to access the finance they need...we are exploring all areas, including bank lending. The Government is working with the banks and looking to the industry to provide the solutions. If that does not materialise, we will consider other options."
In response, a Barclays spokesman said: "We are not constrained in our lending to smaller business. In fact we are lending more, so for us the question of targets is not relevant. If we feel it's a viable business and it's responsible to lend, then the business will receive finance from us.
"[That] is why we have lent almost 30 per cent of new lending to small businesses this year, far more than our share of total loans, and we're supporting record numbers of start-up businesses."
Orosur strikes gold in the downturn
Thank goodness for the worldwide downturn. At least that is what Orosur Mining, the Alternative Investment Market (Aim)-listed South American gold producer, must be thinking.
The group published its 2010 full-year numbers last week, highlighting the fact that it had swung from a loss in 2009, to a profit last year. The group also hit its full-year production target, churning out 56,050 ounces of the shiny stuff.
Orosur admitted that gold's price surging to more than $1,200 an ounce has been a "significant" factor in the move into profit. Despite a fall in operating costs, overall cash costs for the past 12 months increased, from $705 an ounce in 2009, to $827 an ounce last time around. Production also dropped from 70,147 ounces in 2009.
Luckily for Orosur, gold prices are expected to stay high in the coming months as investors worry themselves about slowing growth in the worldwide economy. Orosur's mine in Uruguay has about three years of production left in it, after which the group will have to turn its attention to its operations in Chile.
A feasibility study is expected to be completed in the next few months on the Chilean operations, with the group aiming to produce gold from the site by the end of next year.
Speaking about the results last week, its chief executive David Fowler, said: "As anticipated, production and profitability for the fourth quarter of 2010 improved significantly and we are pleased to be able to announce an after-tax profit of $1.4m (£900,000) for the year. The current gold price coupled with our ability to reduce costs [in the last quarter only] were key contributors to this achievement. I am delighted that we have ended the year in line with company's guidance...Our objective for 2011 is to produce 55,000 ounces at a cost of $825 per ounce."
Koreans conclude uranium deal
Much ink was spilled in the business sections of newspapers last week when the £1.7bn approach for Dana Petroleum by the Korean sovereign wealth fund, The Korea National Oil Corporation, was rebuffed by the company's board.
Less well reported was that as the Koreans were getting the bad news about Dana, they were getting into bed with another UK group, the Aim-listed Berkeley Resources, which said that the Korea Electric Power Corporation (KEPCO), another state-backed investor, had agreed to invest $70m (£45m) at the project level for a 35 per cent interest in Berkeley's Salamanca uranium project in Spain. It has also penned an associated off-take agreement for 35 per cent of any uranium that is produced.
"The strategic partnership with such a successful industry heavyweight as KEPCO confirms our determination to rapidly develop our Salamanca uranium project and be operational by the end of 2012," said Berkeley's managing director, Ian Stalker.
"We are delighted to have this added flexibility in both our financing plan and market awareness, particularly at this stage of our project development.
"This marks a significant achievement in the progress of Berkeley's development cycle and goes a long way to achieve the development of this strategic project," he added.Reuse content