Level 1, last night, President Cyril Ramaphosa announced that as of Monday 21 September South Africa would enter Level 1 of the lockdown, further unlocking the country’s economy and society whilst we await the final decision on the construction and mining sectors possibly returning to 100%; international travel has been allowed to and from countries that are not high risk areas and only a few land borders remain open at this stage although strict criteria will need to be followed.
Border updates, not much has changed at Beitbridge with operating times at 50% of the usual, curfew is still in place however there is speculation that by end of the week big changes will be implemented. Last week news broke that Beitbridge was to go ahead with the COVID-19 testing on every person entering the country as of Monday this week however, there doesn’t seem to be any system in place currently and drivers are not being tested.
Reports are emerging that the Chirundu border post has now implemented the testing of every driver that is entering the country despite no official confirmation of this. Massive delays for trucks going north into Zambia and DRC are however being experienced.
Botswana throws more fuel to the fire, call has gone out for greater regional adherence to guidelines and regulations after it emerged earlier this week that Botswana would still be doing its own testing for the coronavirus, despite the Southern African Development Community (SADC) making it compulsory for truck drivers to cross borders with “Covid-19 certificates” in hand.
Although only laboratories can issue the relevant documents declaring whether or not bearers have tested positive or negative for the virus – a curbing measure that came into effect on Monday morning – a freight representative said Botswana would not take the certificates as legit and would still do its own testing.
For the first time in weeks Kasumbalesa has been running smooth with no problems reported.
Zimbabwe cancels mining concession in national parks, Zimbabwe’s government has announced that mining on areas held by national parks is banned with immediate effect.
In a statement issued last week Tuesday evening after a cabinet meeting, an announcement by Minister of Information Monica Mutsvangwa said “Mining on areas held by National Parks is banned with immediate effect, steps are being undertaken to immediately cancel all mining titles held in National Parks.”
This comes after a public outcry and the threat of a court battle after President Emmerson Mnangagwa’s government granted exploratory rights for coal to two Chinese companies in one of the country’s most iconic reserves, Hwange National Park.
The decision has been welcomed by various conservation groups and The Zimbabwe Environmental Law Association.
FQM to expand, Canadian company First Quantum Minerals (FQM) has announced its plans to expand operations at the Kansanshi mine in Zambia.
The Kansanshi Mine is one of the largest copper mines in the world, with two open pits.
The mine began operations in 2005 and has undergone several expansions since then. In a technical report, the Canadian firm said that it plans to expand the sulphide ore processing facility at the Kansanshi mine by 25 million tonnes per annum (Mtpa).
This is expected to boost the mine’s annual throughput to 52Mtpa.
First Quantum expects to spend approximately $650m for the expansion in about two years, starting in the H2-2023.
“Whether You Think You Can Or Think You can’t, You’re Right”
Steel industry facing the gallows, after the recent steel price increases in South Africa the storm continues to batter the already struggling sector, as of 25 August Arcelormittal South Africa declared FORCE MAJEURE at its Newcastle furnace when a blast occurred on the 20th of August, this has resulted in a halt in production and now the steel giants are battling to meet demands, on the back of this their Vanderbijlpark mill is not producing at 100% due to COVID restrictions and there is now concern that the country could soon run out of steel whilst the smaller mills try to accommodate this problem there is an impending steel increase coming first of next month in the region of R1000/Ton.
To add insult to injury on the 13th of August Eskom announced that stage 2 load shedding would come into effect for a short period of time however since then the country has been on an almost constant load shedding schedule and as of this week stage 4 has been introduced which is wrecking further havoc across all industries within the country.
Border updates, operating times at Beitbridge on the Zimbabwean side are still at a 50% capacity and anyone entering any offices at the border are to produce a valid negative COVID-19 test whilst at Groblersbrug and other borders around Botswana, anyone entering into the country is to undergo a COVID test, testing stations have now been setup at the borders with a 24-48 hour turnaround time.
The Trans-Kalahari Corridor Secretariat (TKCS) has announced that it will hold a “Virtual Stakeholder Engagement” this coming Friday in a bid to address the “devastating consequences on the national and regional economies of the Covid-19 pandemic”.
According to the TKCS, the competitive advantage of the region has been seriously compromised, with exports and imports having been seriously affected.
The Secretariat supports its view by quoting from the World Bank’s biannual Pulse Report which states that as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020.
Going north, last week, notice came out that anyone crossing into Zambia from the Chirundu border is to produce a valid COVID test from the country they are entering from, this was supposed to go live on the 2nd of September, however after much confusion and debate it seems to have been called off for now.
Also last week the notoriously problematic border crossing of Kasumbalesa between Zambia’s Copperbelt Province and the province of Haut-Katanga in the south-western Democratic Republic of the Congo was shut down again.
This was reported by Transit Assistance Bureau “Transist”.
A message sent to Transist said: “Demonstrations at Kasumbalesa so no movement of trucks.”
It’s not clear what has sparked the demonstrations but the area has been politically volatile for some time, with violent flare-ups experienced all the way north-east of Kasumbalesa into copper mining areas around Lubumbashi and Kolwezi.
Earlier last month Kasumbalesa was turned into a flashpoint after members of the Union for Democracy and Social Progress (UDSP) went on the rampage following the alleged killing of a colleague.
It is not known whether the UDSP is also responsible for last weeks’ closure.
Airfreight slowly taking off, the easing of the lockdown has gradually seen an increase in the airfreight sector, initially it was seen that the air cargo sector had not returned to levels pre-dating the Covid-19 pandemic, despite the relaxation of lockdown regulations across the globe.
And yet yields dropped by a global average of no more than 2.4% from the last week of June through the first weeks of July (from Asia Pacific and Middle East South Asia by 4% and 3% respectively, World Air Cargo Data (ACD) has found.
However, in its most recent market data assessment the airfreight aggregator also found that weekly volumes were lower by mid-July than two weeks before.
The gradual route to recovery to pre-Covid market conditions continued for the global air cargo industry in August for a fourth-consecutive month, according to fresh volume and yield data from industry analysts CLIVE Data Services and TAC
Zimplats doing well, Platinum giants Zimplats have recorded a net profit of US$261.8 million for the financial year ended June 30 2020, which is an increase of 81% compared to the same period previous year.
The profitability was on the back of an increase in mineral prices, particularly rhodium, palladium, gold and nickel that saw revenues going up from US$631 million to US$868.9 million.
“The groups operations were not affected by the COVID-19 pandemic as all the mines and processing plants continued operating throughout the year with no confirmed cases within the workforce” the company said.
The miner opted not to declare dividend for the period to preserve cash and maintain liquidity in light of the economic uncertainties posed by the COVID-19 pandemic.
Following on from Zimplats’ current success, another major talking point is the revival at Rio Zim, Zimbabwe’s second largest diamond miner, after having to halt their sales in March and the diamond industry coming to a stop over the past 6 months due to COVID-19, the mine has seen a turnaround, after deciding to cut the price of diamonds last week an immediate bounce back can be seen and the demand for the precious gems has come back with a vengeance.
It seems that Zimbabwe as a whole possesses great resilience and bullish like behaviour when things get tough and hopefully this is the beginning of the revitalisation of the great country once known as the “bread-basket” of Africa.
Implats posts record earnings, revenue was 44% higher at R69.9-billion on higher dollar metal prices and a weaker rand, partially offset by lower PGM sales volumes. The higher revenue resulted in the group generating a gross profit of R23.3-billion for the year, a 240% increase on the R6.8-billion of its 2019 financial year.
Future uncertain, the future of Mopani mine in Zambia remains uncertain as majority stake holder, Glencore, who owns 78% of the mine has put the sale of Mopani Copper Mine on the table, after placing the mine into care and maintenance in April earlier this year.
Stay tuned …
“We Generate Fears While We Sit. We Overcome Them By Action”
Chirundu 24/7, One of, if not, the most problematic borders on the important North-South Corridor into the copper belt area of Zambia and the DRC last night, told the Federation of East and Southern African Road Transport Associations (Fesarta) that it was open on a 24/7 basis. This comes after previous investigations earlier in the year showed that the border could and should operate at 24 hours seven days a week.
However, the investigations earlier in the year were not actually meant for the border to operate at this level but rather to identify challenges preventing the Zambezi crossing between Zimbabwe and Zambia from returning to previously established OSBP (One Stop Border Post) systems and services.
Mike Fitzmaurice, CEO of FESARTA said the following: “We looked at what it would take to make things work and spoke to officers and customs officials. We found that there’s enough will to make it work and received commitment from all parties concerned to solve Chirundu’s congestion issues.”
The 24/7 decision is effective immediately – and while 24/7 operations were still at a tentative stage, the remainder of the year would be used to fine-tune legal-technical aspects of the OSBP.
Fitzmaurice said it was reassuring that the recommendations made to Zimra and the ZRA following January’s fact-finding mission had been taken to heart, and that it was hoped Chirundu would in time be restored to the OSBP it used to be about 10 years ago.
Congestion strikes Beitbridge again, earlier in the week queues stretching around 8kms formed again south of Beitbridge as ZIMRA has ramped up their game on preventing groceries bought in South Africa being smuggled north across the border. The queue had reduced a bit as earlier in the week it was reported to be around 12Kms however frustrations are still mounting, according to reports ZIMRA officials are searching each and every truck.
There has also been reports of police taking this opportunity to exploit drivers of a reported R500 to jump the queue.
In addition to Zimra’s decision to tighten up on truck checking, staff working for the revenue authority also decided to embark on a go-slow for reasons unexplained.
Another growing concern is the safety of the drivers and in fact other road users, the drivers don’t get to sleep for around 2 days as the queue slowly crawls and once they have been released the drivers are extremely tired and exhausted from not having a good nights rest, thus putting potential dangers to themselves and other road users.
Federation of East and Southern African Road Transport Associations (Fesarta) has been in contact with ZIMRA officials in a bid to clear the congestion.
“There are better ways to deal with smuggling. Checking each and every truck causes massive delays and forces drivers to sit in their trucks for days waiting to get through the border. By the time they finally get through they’re unfit to drive.” Fitzmaurice said.
This is just adding further pressure to all parties involved, drivers are missing deadlines, hauliers are being charged demurrage and projects on the receiving end are being delayed.
JUST IN! following yesterday’s announcement of the 6pm-6am curfew, the slow chug of traffic through Zimra’s facility has been slowed even more, especially because the Documents Processing Centre (DPC) is only working 12 hours a day.
“In other words you have a 24-hour border with the DPC only running for half that,” said Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta).
Earlier Fitzmaurice said Zimra was currently only managing about 30 trucks and hour, yet around 1000 trucks head to that border every day.
At the going rate it means only some 360 trucks are processed and cleared daily, while more and more trucks join the growing queue.
Zimra has just advised that the situation at the DPC centres was being addressed with government. But in view of the curfew introduced yesterday as an emergency restriction to curb the spread of the virus they had no choice but to comply.
They are appealing the ruling to allow DPC to continue working 24 hours but can give no time frame to the resolution of the situation.
Freight industry on its knees, As the industry continues to battle the full extent of Covid-19, the South African Association of Freight Forwarders (Saaff) has provided stats that reveal the extent of the damage.
Saaff estimates that local importers are facing around R1.4 billion in storage and demurrage costs accumulated during level-5 lockdown and more than 20 000 containers piling up in storage facilities whilst continued border congestions add to this burden.
“Road freight in this country is on its knees,” says Marcus Ellappan, director of road freight for Bidvest International Logistics (BIL). “There’s a regional imbalance of freight due to the decline in the economy, which means hauliers are battling to generate revenue, let alone operate profitably, especially on return loads. The protests by truck drivers against the hiring of foreign nationals are impacting utilisation of assets, which also impacts negatively on profitability. Some hauliers are now downsizing fleets as trucks stand idle, and with that jobs are being lost.”
COVID compliance is another nail in the coffin for the freight industry whilst the increase of PPE hijackings adds more pressure.
Light at the end of the tunnel, DRC announced that the state of emergency has been lifted, people in the Democratic Republic of Congo are slowly resuming normal activities in the wake of Covid-19 health emergency.
President Tshisekedi has ordered a three-stage reopening of business activities, schools, and borders.
In a televised address late on Tuesday, President Felix Tshisekedi announced an end to the Covid-19 health emergency enforced since 24 March.
This involved closing DRC’s borders with nine neighbouring countries, as well as shutting down schools, bars and restaurants.
Tshisekedi said that, from Wednesday 22 July, all shops, banks, restaurants, cafes, firms and bars would be allowed to reopen. Public transport can resume, and large gatherings will be permitted.
Back on Track, The Port of Cape Town is making headway in addressing its congestion challenges and is well on track clawing back lost ground.
Following staff shortages, lockdown congestions and backlogs, rough seas and stormy weather the port is back on track.
Information shared earlier revealed that at the Cape Town Container Terminal (CTCT) five vessels were in roadstead and that there were six vessels waiting to be worked. That figure is at least half of what it once was, when up to 12 vessels could be seen at anchorage, waiting for much-delayed berthing slots.
There are still gangs serving the terminal and the target of 2500 moves per day was smashed yesterday when at least 3200 moves were recorded. This is great news for the port.
The Multi-Purpose Terminal (MPT) too is doing well, with two mobile cranes and six straddle carriers in full operation.
At the time of this morning’s stakeholder session, three vessels had been worked and delays are said to be only two days.
“A champion is defined not by their wins but by how they can recover when they fall.”
The “Dar Corridor” which connects Zambia to the Port of Dar es Salaam in Tanzania has come to a grinding halt after Zambia authorised the closure of the Nakonde border indefinitely to curb the spread of COVID-19 infections.
The decision was made after a surge in infections which blamed has been placed on truck drivers coming from Tanzania who themselves have seen a rise in infections.
Chitalu Chilufya, Zambia’s health minister advised that the border would remain shut until further notice, during this time health workers will be retrained with regards to the screening process in hopes of speeding up testing.
Fears are mounting that this will negatively impact and already struggling economy, however President Edgar Lungu announced last week Friday that certain measures will ease, he had this to say “We have experienced reduced revenue and if the status quo remains the same, our economy will plunge into the worst crisis, I have therefore seen it inevitable to reopen cinemas, restaurants and gymnasiums,”
There is still much confusion with regards to Zambia’s lockdown as there is conflicting reports whether the country is or isn’t in a lock down.
Producing at a loss, South African Miners are becoming more and more concerned as the effects of COVID-19 are negatively impacting deep level mining in the country, last month government allowed deep level mines to operate at half capacity, this is however is not sufficient according to mining giant’s CEO of Sibanye Neil Froneman, he said “Labour intensive mines cannot continuously operate at these levels, so they will either have to restructure or shut down, you can’t keep on producing at a loss”
“We are causing more harm by constraining the economy than we are impacting positively on Covid-19,” said Froneman. “We have gone too far now; we now need to get the economy to start up.”
South Africa produces 75% of the world’s platinum and about 40% of palladium.
Sibanye which is the world’s number one platinum miner and Harmony Gold Mining Co. have ended guidance, whilst the likes of Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd. have slashed their output forecasts.
Chirundu delays have seemingly come to an end, just last week Zimbabwean officials were instructed to move down south and inspect vehicles sitting at truck stops in order to combat potential smuggling, by the weekend this resulted in a 27km queue and drivers further down were being robbed of their possessions at gun point, Zambian officials acted swiftly and came to assist in the control zones on the Zimbabwean side and by the beginning of this week the queue had been reduced to a 7kms, processing of drivers is now moving smoothly and its business as usual.
“Life isn’t about waiting for the storm to pass; it’s about learning how to dance in the rain”.