Steel price increase! With the current steel woes South Africa is facing, there is a steel increase on the cards for January 2021, so far two major mills have announced an increase across the board of around 3-6% on all products whilst the industry anxiously awaits an announcement from ArcelorMittal.
So far the steel shortage situation remains the same as we eagerly await Mittal’s furnaces to fire back up early next year.
There are also concerns coming from the Manufacturing and Engineering sector that the possible 10% electricity hike for next year could be detrimental to the revival of the sector.
Border updates, there has been a complete U-turn at Beitbridge, following for the previous positive update, Beitbridge is once again bottlenecked.
The southbound queue of loaded and backhaul trucks heading out of Zimbabwe to South Africa is again being snagged by bottlenecking at the Beitbridge Border Post. Zimra has said that they are doing everything in their power to relieve the congestion. So far the northbound queue is clear.
South Africa’s Skilpadshek Border Post which is on the Trans-Kalahari Corridor (TKC) through Botswana continued to be affected by slow coronavirus testing procedures this morning. According to the Transit Assistance Bureau, the building backlog at the border stems from Botswana’s inability to cope with the testing of truck drivers for Covid-19.
A decision taken last month to not test drivers coming from South Africa who are in possession of a polymerise chain reaction (PCR) negative test result which is not older than 72 hours has not had the impact they thought it would have on easing congestion.
The notion that Botswana seems incapable of coping with capacity requirements for testing drivers not in possession of PCR results only serves to support criticism that the country’s inflexible Covid-19 testing regimes are impeding its strategic logistics position in the sub-Saharan region.
In the meantime, transporters using the TKC to get to Namibia are increasingly avoiding the corridor, preferring instead to bypass Botswana altogether which in turn has bottlenecked the Nakop Border post in Namibia.
Container rates soar, exports from South-East Asia have recovered fast from the COVID-19 pandemic however the shipping costs have climbed drastically.
This is due to a high demand and no supply as trade routes have been interrupted by the pandemic. Shipping lines are also taking advantage of this by using the peak season surcharge as a reason.
The cost of putting one container on a ship can cost in the region of $5,000.00 up from an average of $1,300.00 earlier this year.
It is expected that the current rates will continue into early to mid-next year.
Rio Completes Copper Project, Rio Tinto has completed the initial work on the Midnight Sun Mining’s Solwezi Licenses in Zambia.
After incurring project expenditures in excess of $3 million during the initial work phase, Rio will now proceed to the next stage of the agreement.Top of Form
This would allow the company to earn a 51% interest in the Solwezi licenses by spending a further $16 million on the project within four years, as well as by making cash payments to Midnight Sun.
The project is situated on the Zambia-Congo copper belt and is immediately adjacent to Africa’s largest copper mining complex, First Quantum’s Kansanshi mine.
Zambia in negotiations with IMF, Zambia has just begun negotiations for financial support from the International Monetary Fund. The IMF announced this in an official statement
This announcement comes at a time when the Zambian economy has been declining due to several years of crisis. Drought, difficulties in the mining sector, and rising debt had pushed the country to adopt austerity measures in recent years to cope with the situation. However, the covid-19 pandemic that has plagued global economic activity has contributed to the accelerated decline of the Southern African country’s economy.
Great Dyke Sells Stake, Great Dyke Investments who is planning to build Zimbabwe’s biggest platinum mine, has sold a 4.4% stake to Fossil Mines as Covid-19-disrupted fundraising for the venture.
Fossil, which is Zimbabwean owned, will invest $30m in the Darwendale project, through a combination of cash and services, including engineering, procurement and construction. That leaves Vi Holding and Zimbabwe’s Landela Mining Venture each with a 47.8% stake. The sale values Great Dyke Investments at $680m.
The covid-19 pandemic has delayed fundraising for the project, which was originally due to be completed in 2020. Financing of $665m is now expected to be finalised in the first quarter of 2021.
The Darwendale project has the potential to become one of the world’s biggest platinum mines and its development is central to the Zimbabwean government’s plans to reboot a collapsing economy.
Zimbabwe has the world’s third-largest platinum group metal reserves after SA and Russia.
Millions lost to illicit mining, Zimbabwe continues to lose millions of revenue in illicit gold mining, In Mazowe, 40 km outside the capital Harare, artisanal miners have broadened their search for gold ore as they continue digging the soil underground in some cases to over 50 metres deep. Some artisanal miners are receiving up to $40 per gram of gold.
According to government statistics, the bulk of the gold is extracted by artisanal and small-scale miners who are responsible for 63% of the recorded production. In most cases, the artisanal miners operate illegally and do not sell the mineral to the state-owned buyer.
Trucker violence on the down, following from the last report, it seems police and other law agencies have managed to clamp down on the truck attacks. Currently there has been no news of any attacks over the past week. Hopefully this will remain.
Kamoa-Kakula stockpile building up, Ivanhoe Mines has announced that underground development at the Kamoa-Kakula copper project, in the Democratic Republic of Congo, produced a combined 250 000 t of ore, grading 4.85% copper, in November.
The tonnage from the Kakula and Kansoko mines is 29% higher than the volumes achieved in the previous month whilst the grade of copper also increased month-on-month from 4.01% to 4.85%.
The project’s surface stockpiles now contain about 1.25-million tonnes of high-grade and medium-grade ore, which has an estimated grade of 3.75% copper and is on track to have around three million tonnes of high and medium grade ore stockpiled prior to the planned start of production in July 2021.
The Kamoa-Kakula’s first phase involves mining and milling 3.8 million tonnes of ore a year, whilst a concentrator that is expected to handle the same amount of volume is currently being built.
US Support counter-terrorism, The United States is not considering sending troops to Mozambique to combat the terrorist threat in the northern province of Cabo Delgado, but are willing to aid civilian counter-terrorism capabilities.
The United States wants to be Mozambique’s security partner of choice in strengthening border security and in strengthening its capacity to counter terrorist activity.
Terrorists in the northern Mozambican province of Cabo Delgado are apparently dying daily as the Mozambican police have managed to cut out their supply system. It is also noted that the defence force managed to block out an insurgent attack on Maputo as well as neighbouring cities.
There is also concern that the terrorists are using a port or aerodrome in Cabo Delgado to move drugs and guns into the country. However the Cabo Delgado coast and offshore islands are under the control of the Mozambican authorities
Earlier this week Islamist militants attacked and occupied a northern Mozambican village in their closest raid yet to a giant gas project. The assault came late Monday night on the village of Mute, some 20 kilometres from the Afungi peninsula which is the centre of a multi-billion-dollar scheme to build a liquefied natural gas plant in Cabo Delgado province.
The attackers targeted government soldiers in the village and torched homes.
The attack has raised concerns about security at the Afungi peninsula, where the French energy major Total and the United States’ Exxon Mobil are among the investors.
Air force reinforcements from Dyck Advisory Group have been deployed from Pemba to bolster up government troops seeking to retake Mute.
“However long the night may last, there will be a morning”
Steel shortages continue! South Africa’s steel woes continue with a bleak output on the horizon, capacity is at an all-time low with manufacturers and stockists battling to deliver and the continuous steel increases further damaging the sector.
The Steel Giants have put out notice of restructuring at its Newcastle facility expected to result in significant job losses of around 2,500 workers.
On a positive note, furnaces at Mittal’s two plants in South Africa are on schedule to be fired up early 2021.
Joining the band wagon, South Africa is imposing export taxes to either collect more revenue or modify the flow of goods across borders.
The Customs and Excise Duty Act has been amended to allow the minister of finance to impose an export duty whenever he sees it beneficial in the public interest. The amendment is expected to be effective March next year.
South Africa will also be introducing an export tax on scrap metal. There’s been talk about a 30% export tax on chrome and further export duties on iron ore as well as leather and maize. No implementation dates have been announced.
The export tax on Chrome has come as a shock and many of the domestic producers have frowned upon this and fear that this will backfire on the country.
Border updates, Beitbridge border post is now business as usual, little to no delays are being experienced currently.
Congestion at the crucial Chirundu Border Post between Zimbabwe and Zambia has been cleared following the bottlenecking of trucks on the northbound journey into the Copperbelt. The intermittent spike in volumes crossing the Zambezi at Chirundu was due to increased cargo coming through from the Port of Beira in Mozambique.
It was noted that the commodity coming from Mozambique was fuel. This was a result of the Zambian government deciding to issue a statutory instrument which ordered that 50% of freight in Zambia be reserved for local transporters, the country had found itself running short of essential cargo like fuel.
The Zambian government then set aside a three-week period that would allow other transporters to deliver fuel as the Petroleum Transporters Association of Zambia couldn’t keep up with volume requirements which in turn triggered a spike in cargo from the landlocked nation’s closest neighbouring port, Beira.
As cross-border road hauliers wait to hear from Zambia’s and Botswana’s transport authorities about when the completed Kazaungula bridge across the Zambezi will open, another truck has slipped off the pontoon into the mighty river’s depths.
It’s the second rig that has rolled off a ferry at the important crossing which is still served by three pontoons while the bridge, already finished in September, sits unused in the background.
It remains anyone’s guess as to why there’s such a holdup to open the bridge.
Trucker violence surges! on the night of 20th November 2020, 10 trucks were attacked and torched on the N3 in South Africa, this attack marks the single biggest attack on the country’s main supply route between Gauteng and the Port of Durban. Just a few days later another truck was attacked and earlier this week a truck driver was shot and burnt to death in his cabin, throughout the week there has been various attacks on trucks with the latest one coming just last night where a driver was shot at from both sides of his vehicle but luckily managed to flea just in time before his truck was torched.
The attacks are allegedly backed by the All Truck Driver Foundation (ATDF), a vigilante group opposed to foreign national truck drivers working in South Africa’s transport sector. ATDF has said that the attacks on transporters stem from employers in the sector allegedly favouring foreign nationals because they are paid less and are exploitable because many don’t hold valid work permits.
Earlier in the year ATDF threatened to embark on a strike that would cut off the Durban to Beitbridge corridor, however there was a court interdict and the protest never took place.
The Cross-Border Road Transport Agency (CBRTA) has added its voice to pleas that transporters consider not working at night, thereby hopefully diminishing the life-threatening situation in which truck drivers find themselves as the violence targeting South Africa’s freight industry drags into its sixth day.
Ducking and diving, Deputy Gauteng Police Commissioner, Major General Daniel Mthombeni, circumvented the issue as industry stakeholders demanded concrete action to address the growing insurrection in the road freight industry.
He told attendees at a meeting held in Alberton yesterday that arrests had been made earlier this week and called for the establishment of a forum. Members of the industry however made it clear that a few arrests were not enough.
Transport and security companies said that they were aware of the ‘hot spots’ and asked why police visibility in these high-risk areas was still so poor and why there weren’t any functioning cameras on major highways.
A security company representative said on many occasions he would call the police to ask if certain routes were safe but even the police were unsure most of time.
Great Dyke making progress, Great Dyke Investments who has been pinned as Zimbabwe’s next platinum giant is ahead of schedule in boosting Zimbabwe’s platinum exports by 2022. According to the mine’s chief operations officer, Mr. Munashe Shava, extraction which commenced earlier this year will tally with the company’s projections of exports by 2022.
The Great Dyke Investments mine in Darwendale which follows Zimplats and Unki mines and is one of the new investments is expected to help the country reach a US$12 billion mining industry by 2023.
GDI is 50 percent owned by Russia’s Vi Holding, and 50 percent owned by Zimbabwe’s Landela Mining Venture. The project has an excess of 180 million tonnes of ore containing 17 million ounces of platinum group metals and gold, with an average grade of 2,93 grammes per tonne.
The mine expects to start contributing to the country’s gross domestic product by 2022 although it has already contributed to the country’s fight against the Covid-19 where it supplied local health institutions with machinery and PPE.
DRC to formalise Artisanal Mining? EGC and Trafigura signed an offtake agreement in a bid to formalise artisanal and small-scale cobalt mining in the Democratic Republic of Congo.
The trading agreement includes the provision of finance by Trafigura to fund the creation of strict, controlled artisanal mining zones, installation of ore purchasing stations as well as the costs related to the transparent and traceable delivery of cobalt hydroxide to Trafigura on an export cleared basis.
Under the supply terms, EGC will ensure that the ore marketed by Trafigura complies with OECD Due Diligence Guidance.
Earlier in the year Glencore made a U-Turn and also decided to back artisanal mining of cobalt. The group aims to end child labour in the cobalt mining sector and to improve the working conditions in Congo.
Almost three quarters of the world’s cobalt comes from Congo where Glencore owns two of the largest mines. Demand in cobalt is expected to surge in the coming years as the sales of electric-vehicles are said to take off.
Zambia’s copper output increases, Zambia who is Africa’s second-largest copper miner, produced 646,111 tonnes of the metal in the first nine months of 2020, up from 590,321 tonnes in the same period last year.
The Southern African nation now expects total production for the year to reach 820,000 tonnes, driven by rising copper prices.Bottom of Form
This comes as good news to Zambia, who is the first African country to default on a bond payment during the covid-19 pandemic by missing a $42.5 million interest payment on part of its international debt.
Zambia’s mining sector has been in the spotlight as the country’s financial situation deteriorated this year which prompted Glencore to shut its Mopani Copper Mines operation.
With that being said, the Zambian government has advised that negotiations with Glencore regarding increasing the government’s stake in Mopani were nearing a conclusion. No information has been given out about the size of the stake that state-owned ZCCM Investments Holdings is trying to acquire was given.
Tanzania to join in fighting terrorism! Tanzania’s government says is teaming up with Mozambique to launch a joint operation against violent attacks by Islamist militants along their shared border.
Several recent attacks blamed on Islamist extremists have targeted the border village of Ktaya in Tanzania’s Mtwara region.
Police say more than 175 houses were set on fire and some people were killed by assailants, who, authorities say, fled into neighbouring Mozambique.
Tanzania has already increased security along the border and it is now joining forces with Mozambique to contain what it calls terrorists.
Some opposition parties and rights groups are raising concerns about how the Tanzanian government plans to tackle the threat.
Tanzania becomes the 4th country that has pledged their allegiance in fighting the terrorist scourge, Britain, Zimbabwe and South Africa have voiced their aid however we are not seeing any troops headed to Mozambique.
Some Zimbabwean citizens are concerned about soldiers going into Mozambique, fearing that, that would encourage terrorists to infiltrate their country.
“For tomorrow belongs to the people who prepare for it today”