Mittal shutdown postponed; ArcelorMittal has announced that their planned shutdown at the Newcastle Furnace has been delayed till the end of March.
The announcement comes after the mill decided to build up steel supplies to carry the industry over the three months that it will be in care and maintenance.
There is the rising concern that South Africa will once again face a shortage of steel at the beginning of the second quarter going into Q3 due to Mittal’s shutdown as well as price increases to go along with the shortage.
Please be mindful of the shutdown and plan accordingly.
Global steel prices expected to remain elevated in 2022, players within the steel sector are becoming increasingly cautious in their purchasing requirements. The forward view on global prices is, gradually, turning more negative, particularly for coil products. The record high values reached towards the end of 2021 took many by surprise.
The peak of the price highs occurred at differing points in each region. European prices peaked at their highest level in June of 2021, while those in North America peaked in September as Asian prices levelled off.
The outlook for the start of 2022 is clouded again by Covid-19 sweeping across the globe. The ominous Omicron variant perhaps slowed the recovery in the steel market.
Prices are expected to find support above historical averages, due to increased mill input expenditure and moves to decarbonise the industry. The economic outlook for 2022 is also relatively strong. This is despite downside risks associated with new Covid variants and the expected tightening of monetary and fiscal policy in many countries.
Supply chain shortages are still disrupting the global steel market and are preventing a strong recovery in 2022. Due to the backlogged steel orders, the demand will remain high throughout the year.
Because of the demand for the limited inventory available, steel prices will continue to go up in 2022. The U.S. steel industry is currently valued at $180 billion and began to boom in 2020 thanks to the disruptions caused by COVID-19.
Increased business and consumer spending habits have driven up the demand for steel-bearing products, which are needed for everything from vehicles to food cans. Buyers in some instances are willing to pay more for these products and will continue to pay increased prices throughout 2022.
ATDF, again denies protest, The Port of Richards Bay was the scene of a peaceful, albeit illegal, protest against the employment of undocumented foreign truck drivers on Thursday morning as protesters pulled over several truck drivers before the police intervened.
Upon arrival at the scene, SAPS spoke to a person who was identified as the leader of ATDF on site however, the secretary for the All Truck Drivers’ Forum, Sifiso Nyathi, said the organisation had nothing to do with the protest and that it appeared that unemployed people were using the name, although they had no affiliation to the forum.
Nyathi said the ATDF would oppose the hiring of illegal immigrants via formal, legal channels. Forums have been set up to engage with all relevant parties and government authorities and hopefully it will result in a workable policy that allows the industry to move forward in a positive and safe way.
Airfreight on a tricky path, spike in demand, soaring rates, and a tricky balance between certain markets remaining closed to curb Covid and others reopening to global trade, necessitate fine footwork from the airfreight sector.
The current situation of high demand and even higher rates was expected to last for the duration of the 1st quarter, before tapering off in Q2.
At least that’s what Aero Africa is hoping for, that there’s respite for shippers somewhere in the near future.
Until then, the struggle to find space and allocation for clients in a confined market continued, especially out of China.
Snags on the ocean side are fuelling an overflow of critical orders to air, sustaining demand, but capacity into Africa and its important sub-Saharan transhipment hub of South Africa remained a problem.
South Africa’s block space agreement out of China is on hold because the carriers are on hold, China cannot commit to freighters in South Africa because they are going into the US where the yield is better and as a result, options out of China have become few and far between, with agents fighting for space that is often elsewhere allocated because of market dynamics which is attributed to the strength of the dollar and the primacy of American imports to name a few.
Ocean freight costs expected to remain high throughout 2022, Shipping rates are expected to stay elevated well into 2022, setting up another year of booming profits for global cargo carriers.
The spot rate for a 40-foot container to the US from Asia peaked at just over US$20,000 last year up from less than US$2,000 a few years ago and was recently hovering near US$14,000.
Tight container capacity and port congestion also mean that longer-term rates set in contracts between carriers and shippers are running at around 200% higher than a year ago, which signals that elevated prices are here to stay for the foreseeable future.
Larger customers like retail or tech giants have the power to negotiate better terms in those deals or absorb the added expenses whereas the smaller importers and exporters that rely on carriers to haul everything from electronics and apparel to grains and chemicals, cannot easily pass those costs along or weather long periods of stretched cash flows.
Regulators from the US, the EU and China met in September and determined there was so far no evidence of anti-competitive behaviour in container shipping. Governments are on high alert as global supply chains are being pushed to the breaking point.
The US Federal Maritime Commission says it has increased monitoring of carrier alliances, to better track trends and spot potential illegal behaviour, such as artificially limiting supply or not competing on prices.
Zambia to continue with plans to sell KCM, Zambia’s state-appointed liquidator who is managing the affairs of KCM said he would proceed with the dismantling of the company and the sale of its assets.
This was after the Lusaka Court of Appeal earlier this month declined to discharge the liquidator, Milingo Lungu, despite ruling earlier that he should arbitrate a dispute with KCM’s majority shareholder, Vedanta Resources.
ZCCM Investment Holdings, a 20.6% stake holder in KCM, applied to put the company into provisional liquidation in 2019. Vedanta argued the step was unlawful as there were conditions in their shareholders’ agreement allowing for dispute resolution.
ZCCM said Vedanta had failed to invest in KCM’s assets and had not paid dividends as previously promised.
Despite being asked to enter into arbitration proceedings with Vedanta, Lungu said that he would divide KCM into halves, effective January 31, and then embark on an asset disposal programme.
Zimplats allowed to set up solar plants. The Zimbabwe Energy Regulatory Authority announced on Friday that it had granted Zimplats a licence to construct, own, operate and maintain a 105 MW solar power plant at Ngezi Mine.
A similar notice was also published but this time for the generation of an 80 MW solar power plant at Zimplats’ Selous Mine in Chegutu.
Zimplats says setting up the two power plants will cost the company as much as $201 million.
Zimplats is not the only miner that has turned to solar power as gold miner Caledonia Mining, which runs Blanket Mine in Zimbabwe is constructing a 12 MW solar plant which is expected to be operational this year and will exclusively supply Blanket with approximately 27% of its daily electricity usage.
Copper prices on the rise, the copper price rose on Wednesday, supported by expectations of further policy easing in China.
March delivery contracts were exchanging hands for $9,856/tonne on the Comex market in New York, up 2.3% compared to Tuesday’s closing.
The most-traded March copper contract on the Shanghai Futures Exchange was steady at $11,026.46/tonne.
China, the world’s biggest buyer of metals, has been stuck in a property market slump, credit stress and repeated virus outbreaks. In response, the central bank this week cut its policy interest rate for the first time in almost two years, signalling the beginning of an easing cycle.
China’s copper exports rose to an annual record of 932,451 tonnes in 2021, according to customs data.
Gold also rose to its highest in two months this past Wednesday.
Fears that insurgents planning more attacks in Cabo Delgado, The SADC has warned that insurgents are regrouping for more coordinated attacks.
While SADC has noted considerable gains in Cabo Delgado, there are genuine fears that insurgents have withdrawn to regroup and are planning rejuvenated attacks.
“The insurgency is not yet neutralised. The violent extremists are regrouping, launching attacks from several parts of Cabo Delgado and they are also expanding to neighbouring province Niassa where they have launched significant attacks,” said Professor Adriano Nuvunga – the Director of the Centre for Democracy and Development.
SADC sent in its Standby force into Mozambique’s gas-oil rich Cabo Delgado in July last year, a month after Rwanda sent in troops.
At the onset of the SADC Mission in Mozambique, Nuvunga said the insurgents were disbanding. However, six months later, they had changed their strategy.
At the beginning of the deployment, the country saw violent extremists disbanding. Now they have seen them regroup and move in terms of recruitment.
On December 15 last year, Islamic extremists in Nova Zambezia, Macomia district, beheaded a pastor and instructed his wife to take his head to the police with a message: “While you [government forces] are walking on tarred roads, real men [insurgents] are in the woods.”
As a show of power, the insurgents operating from the bush ambushed SAMIM forces in the east of Chai in the northern Macomia district on the night of December 19, resulting in the death of a South African soldier.
Intel also suggests that the insurgents have support within communities they operate, with some civilians assisting them in transporting arms.
Since the insurgency began in 2017, there have been 1,111 cases of political violence with 3,627 reported fatalities during these attacks and 1,587 reported fatalities from violence targeting civilians.
“Great things are done by a series of small things brought together.”
Bulls are on the rampage, in the aluminium market! The Shanghai Futures Exchange contract paved the way and rocketed to a 13 year high on Monday.
The London Metal Exchange followed shortly thereafter hitting its own 10 year high of $2726.50 per tonne on Tuesday.
The driver of the rally stems in China’s own supply chain problems with energy restrictions thereby reducing smelter output. Shanghai exchange inventory has fallen from more than 392,000 tonnes in April to a current 248,926 tonnes and the world’s largest producer continues to absorb aluminium from the rest of the world. China imported 1.06 million tonnes of primary metal last year and another 744,000 tonnes in the first half of 2021 and there are no signs that anything is slower down anytime soon!
The copper price has fallen slightly on the back of slower factory activity in China but the outlook into next year sees the price remain in the $9,000 average.
Iron ore prices plunged due to production curbs in China on Wednesday and the expectation is for further price drops for the remainder of the year. Baoshan Iron and Steel Company, one of the largest listed producers in China predicts further decreases this year.
International supply constraints remain, the end of the current “norm” seems to be but a dream, with constant uncertainty surrounding pricing and delivery; projects, quotes and contracts are being heavily affected.
Supply of material remains inconsistent with delivery times often pushed out on a weekly basis, mill-rollings are frequently being pushed back by at least 3 months.
Steel prices are somewhat levelling out however HDPE and rubber prices are on the rise with back-to-back increases, the international petrol price is a big contributor as the price of fuel affects the raw material directly whilst some force majeure conditions and material allocations remain in place as well, resin producers have implemented increases for the last two months with some already nominating for a further increase at the end of September.
Resin production has returned for the most part, and can even be considered robust, however, after fulfilling contracts, producers are holding back resin to rebuild inventories, leaving little resin available for spot sales.
Numsa begins demonstrations, The National Union of Metalworkers of South Africa has started with nationwide demonstrations, while wage negotiations with the Steel and Engineering Industries Federation of Southern Africa are ongoing.
It is noted that the nationwide demonstrations, so far, are peaceful demonstrations and not picketing which may only be embarked on in support of a protected strike or in opposition to a lock-out, but neither parties have served strike or lock-out notices on the other.
Negotiations are ongoing after Seifsa’s wage offer in July was accepted by other trade unions but Numsa shortly after declared a deadlock with the federation.
Border updates, it has been over a week since cargo processing issues at the Beitbridge Border Post resulted in truck queues stretching south for kilometres, the situation seems nowhere near being resolved.
Drivers have been advised to stock up on supplies such as food and water in Musina as the queue was at least 11 kilometres long and going nowhere slowly.
It is said that dawn-to-dusk operating hours by clearing agents north of the border had resulted in delays south of Beitbridge, adding to the backlog were Zimbabwean drivers who are allowed three days to transit through their country compared to counterparts from neighbouring states who aren’t.
The dawn-to-dusk and transit time issues are relatively new, a third obstacle at Beitbridge has been in the mix for years, a weighbridge for northbound traffic that’s situated on the other side of the N1 where trucks going north have to cross over into the oncoming lane for this inspection, geographical and space constraints are the reason behind this procedure which makes matters worse, at the Vehicle Inspection Department on the Zim side, all northbound trucks have to be weighed again, causing traffic to back up over the bridge and blocking the movement of traffic going into the truck park immediately south of the Limpopo River crossing.
In addition, construction work north of the border is constraining facilities, impacting on the manoeuvrability of truck traffic.
The Kazungula One-stop Border Post bridge across the Zambezi River is not yet operating at the desired speed expected of a modern multimodal transit.
More than three months after the opening of the bridge, the streamlining system that is in place is still reporting processing times in excess of 30 hours, given existing cross-border challenges, such as unaligned Covid-testing measures delaying truckers at various transits, transporters were hoping that teething issues at Kazungula would soon be sorted out and that hopes of a true one stop border post could be in place.
Keep expectations low on cargo delivery, latest maritime consultancy findings are showing that carriers are no less reliable, but they’re also no better.
The Global Liner Performance report, which includes figures up to and including July, reveals that reliability has been hovering around 35%-40% for most of the year.
In July it dropped by -3.8 percentage points month-on-month, on a year-on-year level it was down a massive -39.7 percentage points. The average delay for late vessel arrivals continued to deteriorate. The level of delays this year has been the highest across each month compared to previous years.
Maersk Line was the most reliable carrier in July (47.3%) followed by Hamburg Süd, the only other carrier with a figure higher than 40% whilst Evergreen was the least reliable, coming in at 16.2%.
None of the carriers recorded a month-on-month improvement.
Fuel hike again, despite expectations of a price drop, the price of unleaded and lead-replacement petrol increased by 4 cents per litre this past Wednesday.
However, diesel prices will go down by 15 cents per litre for 0.05% sulphur and 14 cents per litre for 0.005% sulphur.
There is also the implementation of a slate levy, with an increase of 8 cents per litre implemented in the price structures of petrol and diesel. The slate levy is a mechanism implemented to finance under-recovery by the South African petroleum industry.
Whilst there is a slight relief in a diesel decrease, the effects will be null and void coming of the back of the huge increase last month, freight has been directly affected as running costs have increased as well as the petrol price increases directly affecting Rubber and PVC prices.
Zimbabwe to use IMF aid to boost currency, Zimbabwe will use more than half of the $961 million allocated by IMF in the form of special drawing rights to support its struggling currency.
The government abandoned a 1:1 ratio between a precursor of the reintroduced Zimbabwe dollar and the U.S. dollar in February 2019. The currency now trades at 85.82 to the U.S. dollar and even lower on the black market.
The IMF injected a record $650 billion of reserve assets to build confidence and stability in the global economy in the wake of the devastation caused by the pandemic. The reserves are allocated to all fund members, with an estimated 70% going to the Group of 20 largest economies and just 3% to low-income nations.
Zimbabwe won’t use any of its reserves to pay towards the $8 billion in external debt it owes, even though its arrears have effectively blocked it from borrowing more money from multilateral lenders.
Hippo Valley Estates, is planning a US$40 million cane development project and has already cleared half of the 4-000 hectares designated land secured for the project. It is a partnership between Government and local banks and the hope is to boost the current sugar output of 400 000 tonnes per year significantly.
Zambia plans to reboot economy, after years of mismanagement and defaulting on international debt loans, Zambia is looking at turning its finances and fortunes around following the inauguration of a new president Hakainde Hichilema on August 24.
One of the first major steps by the newly elected president, was the appointment of fellow economist Situmbeka Musokotwane as the new cabinet’s minister of finance.
Sworn in on Friday last week, Musokotwane, in much the same vein as President Hichilema, got right down to business by announcing that copper production would be a primary objective of the new government as it strives to double the production of the raw metal by 2026 and if successful, will see Zambia’s copper output increase to two million metric tonnes in five years’ time.
The precious metal accounts for roughly 70% of Zambia’s revenue from export earnings however under former president Edgar Lungu, a wedge was driven between the previous government’s relations with the mining industry, causing exports to dwindle while government debt ballooned due to unchecked infrastructural expansion projects. It was reported on BBC news 1st September that President Hichilema is horrified at the empty treasury he has inherited and was quoted as saying the hole is much bigger than expected but remains determined to change things around and create a corrupt free and freshly energized country.
The immediate changes by Hichilema resulted in the kwacha and government bonds surging to record highs as the international business community had a more positive outlook on Zambia.
The best way to dig Zambia out of its debt hole was to fill it with copper, said Musokotwane.
Mozambique’s Cabo Delgado returns to normal, over a thousand people in Mozambique’s Cabo Delgado region who had been displaced by insurgency, have successfully returned to their homes. Local refugees have been moved from the Quitunda camp and are now back in Palma to rebuild their lives.
The insurgents operated from the north in a town called Mfundi which had a gas plant, Rwandan forces moved to Palma and went on to Quitunga until they captured the stronghold, Mocimbia de Praia, which was the main city where operations were being planned by IS.
Once the Rwandan forces had secured the central and northern axis of the insurgent operations, they began reclaiming the villages in the joint operation with Mozambican troops.
Focus now is on moving people out of the displacement camps back into their homes.
A Defence Force spokesperson says it’s still too early to tell when they will be able to pull out of Mozambique because while there have been small victories, the instability persists in other parts of the region.
Spring is in the air! We would like to wish all our customers a happy spring day for earlier this week!
“It is spring again. The Earth is like a child that knows poems”
Zambia elects a new president, President Elect Mr Hichilema defeated main rival President Edgar Lungu, by almost a million votes.
This was President Elect Mr Hichilema’s sixth attempt at winning the presidency and his official inauguration is on Tuesday 24th August at National Heroes Stadium.
H.H. has already refused the expensive Lexus presidential vehicle and continues to drive around in his Nissan Infinite living his message to the people of Zambia, that all Zambians matter and the presidency is not about self-glorification; it is to serve and make Zambians proud again! Already he has met with the Director Generals of the Financial Intelligence Centre, Anti-Corruption Commission and Drug Enforcement Commission to ensure Zambia moves in the right direction free of political interference, corruption and with proper accountability.
Our congratulations go out to all people of Zambia for demonstrating the power of true democracy and we look forward to witnessing a very positive term in office for HH that will bring upliftment, prosperity and pride to all Zambians.
Zambian Copper producers standing by to start expansion projects worth $2 billion once industry has reached an agreement with HH on royalties which has been on hold since 2019 when tax changes were implemented. Specifically mining royalty taxes were increased to 5.5-10% from 4-6% and was not deductible from Corporate Income Tax.
NUMSA picketing “premature” The National Union of Metalworkers of South Africa has served notice that it intends to start picketing following failed wage negotiations with the Steel and Engineering Industries Federation of Southern Africa (SEIFSA).
The federation says it views this notice as “premature” in that picketing may only be embarked on in support of a protected strike or in opposition to a lock-out.
To date, SEIFSA reports, neither party or parties have served strike and/or lock-out action on the other and negotiations aimed at breaking the deadlock are ongoing.
The federation advisedthat it is has various meetings with all the trade unions this week and next week, under the supervision of the Bargaining Council.
SEIFSA first made a wage offer at the Bargaining Council late last month, during which other unions indicated a willingness to accept the offer. The federation suggested that workers receive a 4.4% increase this year, a consumer price inflation plus 0.5% increase in 2022 and a 1% increase in 2023.
SEIFSA says centralised collective bargaining is more necessary than ever before to ensure the survival and recovery of the industry.
NUMSA believes the special phase-in dispensation, which introduces a new entry rate ranging between R20 and R29 an hour, will allow employers who have not been paying the minimum rate of R49 an hour to continue doing so for 15 years.
We wait to see the outcome of these talks and can only hope that all parties come to an agreement as the industry and the country itself cannot afford such a catastrophic event.
Border updates, The Democratic Republic of Congo has doubled back on proposed legislation designed to prevent foreign-registered transporters from carrying DRC minerals out of the country.
A declaration signed on July 29 by the minister of transport and ways of communication announced plans to restrict the carriage of export minerals solely to vehicles registered in the DRC which was due to come into force on the day.
However, in an about-turn, DRC President Félix Tshisekedi has asked the minister to revisit the legislation in light of its anti-competitive nature.
While investigations are under way, the legislation is not going ahead and will most likely be overturned, currently foreign transporters can still pick up loads.
These include the provisions of the COMESA treaty, which calls for the promotion of competition, the elimination of measures that stand in the way of the free movement of people and goods and the reduction of non-physical barriers, particularly legal and regulatory ones.
Transnet recovery on track, Transnet Port Terminals’ recovery plan is making good progress after the cyberattack last month that paralysed its Navis cargo processing system, bringing the utility’s ports and railways network to a complete standstill.
Customer interfaces had largely returned to normal.
Looking into the recovery status from port to port, the Durban Container Terminals, Pier 1 and Pier 2, where the import volume pressure was most evident, had done well despite much time being lost due to weather delays this past week.
The terminals are still being impacted by delays in evacuation of imports. The terminals are feeling this congestion on the landside which is now creating delays on the waterside. Currently, as at August 16, Pier 1 had two vessels at anchorage awaiting a berth. Pier 2 had six vessels, with an average berthing delay of four days.
Cape Town port appears that recovery has been decidedly better. Transnet Port Terminal said that Cape Town Container Terminal had minimal delays, and a balanced yard.
The ports of Ngqura and Port Gqeberha are also recovering well.
Copper Price Bounces Back, the price of copper bounced back last week as worries about supplies from top producer Chile gathered pace.
BHP and the workers union at its Escondida copper mine said last week that they would extend government-mediated contract talks by a day in a last-ditch effort to stave off a strike. The world’s biggest copper mine accounts for about 4.5% of global copper supplies estimated at roughly 24 million tonnes this year.
Copper for delivery in September rose 1.9% from last weeks’ settlement price, touching $9,618 per tonne.
Meanwhile, concerns about Chinese demand and a firmer dollar tempered optimism for higher prices.
China’s January-to-July copper import volumes dropped by more than a tenth compared with the first seven months of 2020.
The biggest copper buyer in the world bought 3.219 million tonnes of copper from January to July, down 10.6% compared with the same period in 2020.
US legislation to regulate carriers shot down, The World Shipping Council has come out strongly against proposed US legislation designed to tighten regulation of carriers in order to address supply chain congestion resulting from record US consumer and business import demand, coupled with disruptions resulting from the Covid-19 pandemic.
A framework has been shared which the WSC believes is flawed, particularly the suggestion that ocean carriers are solely responsible for the current supply chain congestion.
The congestion is widespread, with every link in the supply chain being affected, from marine terminals to truckers, rail cars and warehouses are all under tremendous strain.
The WSC points out that what is “crystal clear” is that regulating only ocean carriers, or any other single class of supply chain provider is doomed to fail.
The bill would require ocean carriers, under the threat of penalty, to guarantee the performance of other parties over whom they have no control, for instance by putting the burden on ocean carriers to ensure chassis, trucks and rail cars are available from third party providers.
The WSC has accused the government of tilting the market in favour of shippers in commercial disputes.
The organisation further warns that the legislation, if enacted, would incentivise trade partners to enact similar protective legislative and regulatory frameworks in their countries.
Steel prices in USA have risen 215% since March 2020 which in turn has destroyed many American jobs and negatively impacting many industries. The increase to the import duty to 25% in 2018 implemented by Trump has been kept in place by the current Biden government and continues to cause no end of grief to industry at large.
USA Air Cargo screening continues to be a challenge for some packaging and products that is deemed unairworthy unless it can pass through security screening. The thought is that further down the line manufacturers can be accredited in some way and certify in other ways yet to be identified.
China’s port shutdown sparks worldwide fear, The Port of Los Angeles, which saw its volumes dip because of a June Covid outbreak at the Yantian port in China, is bracing for another potential decline because of the latest shutdown at the Ningbo-Zhoushan port in China, many companies chartering ships are already adding covid contract clauses as insurance, so they won’t have to pay for stranded ships.
The shutdown at Ningbo-Zhoushan is raising fears that ports around the world will soon face the same kind of outbreaks and Covid restrictions that slowed the flows of everything from perishable food to electronics last year as the pandemic took hold. Infections are threatening to spread at docks just as the world’s shipping system is already struggling to handle unprecedented demand with economies reopening and manufacturing picking up.
The port is actively negotiating with shipping companies, directing them to other terminals, and releasing information on a real-time data platform, it said. To minimize the impact, it’s also adjusting the operating time of other terminals to make sure clients can clear their shipment.
Rwanda to continue aiding Mozambique in fight against terrorism, earlier this week, the government of Rwanda indicated that it would continue to collaborate with the government of Mozambique as well as other partners in the next phases of stabilisation and development after Rwandan and Mozambican troops recently repulsed insurgents from key areas of the Cabo Delgado Province.
Joint forces captured Mocimboa da Praia earlier this month, a key Mozambican port city that had been the headquarters of the Islamic State-linked terrorist group in Cabo Delgado Province since 2015.
This strategic port city for Mozambique had been an important logistics point for the insurgents in addition to being the terrorists’ stronghold in the province.
After the insurgents’ main stronghold was captured, more than 90% of the province is now free where operations to wipe out the terrorists are now focused on smaller pocket areas.
“Smooth seas have never made skilled sailors”
No steel increase for the month of August, steel prices are set to remain the same as ArcelorMittal has not announced any price increase for the month of August, however after last weeks protests a Force Majeure was declared as no goods could move from the various plants. This has put a strain on supply as a backlog has been built up.
The Force Majeure from ArcelorMittal remains in place until further notice.
A further fuel hike is expected for the month of August, again contributing to logistic costs and we are most likely going to see an increase in freight rates.
Chaos, rioting, looting destroys the economy and sectors, there was a week of total madness and chaos in South Africa as protestors, rioted and looted in the name of the former president.
To looting and burning shops, to stealing infrastructure, the total cost of damages is still being calculated.
KwaZulu-Natal’s total cost of damages has been calculated to over 20Billion Rand and an estimated 55% damage to the province’s GDP. Gauteng’s total losses are still being calculated.
The estimated damage to the trucking industry alone following the violence and looting in KwaZulu-Natal and Gauteng is R250-R350 million in burnt-out trucks and cargo. This doesn’t account for the amount of trucks that had to remain in place as the looting went on.
It is noted that the loss assessment for the road freight sector is based on initial figures and could increase.
Not only has it impacted hugely on the economy of the South Africa, but it has set the recovery of the economy back by at least 10 years, if not longer.
The supply chain from the Port of Durban to Gauteng and cross-border was completely cut off, with the N3 not being passable for trucks to supply much-needed fuel, groceries, pharmaceuticals, and many other supplies. The food security in KwaZulu-Natal and Gauteng will be severely impacted over the next few months, and it will be a gloomy picture as those companies that have been impacted by the devastation try to rebuild and start again.
What has happened in South Africa over the past week has not only impacted on the economy of South Africa, but it has also impacted on other landlocked countries in the SADC region who rely heavily on South Africa for imports of fuel, groceries, pharmaceuticals, mining equipment and vehicle spares. These countries that have used South Africa in the past as a transit route for exports through the Port of Durban will now most likely turn to alternate routes for exports such as Walvis Bay, Beira, and Dar es Salaam.
The Port of Durban in the last few years seen a decline in exports of copper and cobalt from the Copperbelt in Zambia and DRC due to inefficiencies, and the Port of Dar es Salaam now exports 73% of all DRC’s copper. The Ports of Walvis Bay and Beira have both recently built world-class container terminals that can now challenge the Port of Durban. They are more efficient, and their costs are lower than the Port of Durban.
Despite all the doom and gloom there is one positive to look forward to. South Africans by nature are resilient people and we will not let this type of behaviour define us.
Dip in SA mining production but positive outlook on the cards, South African mining output was 3.5% lower in May than in the preceding month, statistics have shown. This is disappointing but amid red-hot commodity prices, the sector remains one of the bright spots in an economy that is literally going up in flames in places at the moment.
On a year-on-year basis, production increased by 21.9%, but that was off a low base as in May of last year the sector was in the process of a gradual reboot. Indeed, it fell almost 30% in May 2020 compared with the same month in 2019, Stats SA’s historical data show, however the overall picture to date is positive.
Reflecting the surge in prices on expectations regarding the global economic recovery, mineral sales leapt by 88.2% in the year to May, led by platinum group metals, which soared by 258.2%.
The roaring commodities cycle has benefited South Africa’s wider economy, leading to hefty trade and current account surpluses and underpinning the often vulnerable rand. It is also giving investors a reason to at least hang on to their shares as rich dividends have been paid out with a lot more cash on the horizon.
But the current wave of looting in the wake of the incarceration of former president Jacob Zuma could bode ill for the sector this month, given the potential disruptions to supply chains. Mining output has so far been unaffected but if fuel and other supplies are affected, the sector’s productive capacity will not escape unscathed. Then there is the small matter of getting product to ports in KZN amid the mayhem.
Global mining giant Rio Tinto mothballed its Richards Bay Minerals operation in response to ongoing community violence, which included the murder in May of general manager Nico Swart. Two years ago, it halted a planned $465-million expansion to the asset for the same reason. That was all a dress rehearsal for the unfolding failure of the state, seen vividly this week in the skeletal remains of looted and torched shopping centres and warehouses.
Transnet suffers cyber-attack! Early yesterday morning, South Africa’s entire port and rail network was shut down by the biggest cyber breach in Transnet’s history after hackers broke into the state-owned company’s country-wide system used for the movement of cargo.
The software security breach that paralysed the country’s port and rail network will require outside intervention from a highly capable IT professional to undo.
The attack was so broad that the gates allowing personnel to enter and exit the ports were stuck shut.
The state-owned logistics company has said that port and rail systems will continue to operate using manual systems, which means overall operations will be heavily affected.
IT at Transnet has also asked users to refrain from sending mails to the port terminals as well as the EDI route, the NAVIS applications and the Transnet website itself.
Transnet said that it was working to reduce downtime to ensure that the systems were up and running as soon as possible.
At this stage, it has not confirmed how long it will take before its systems are back online and fully operational.
Load-shedding returns! with the cold weather back, Eskom has announced at any given time that load-shedding will be implemented without warning if needs be.
After last weeks event, this is the last thing the country needs right now.
It’s been more than a month since President Cyril Ramaphosa lifted the limit for generation for companies without the need for a licence from 1MW to 100MW, but gazetting of the amendment is taking far longer than necessary.
After grim years of load-shedding, it seemed that South Africa’s future was brighter, with cutting of red tape for embedded generation projects of up to 100 MW. This frees up industry and business to build and use their own substantial embedded generation capacity, giving them a more reliable electricity supply and easing pressure on the national grid, however weeks later, we’re still waiting for Minister of Mineral Resources and Energy, Gwede Mantashe, to formally gazette this updated limit in an amendment to Schedule 2 of the Electricity Regulation Act.
When the president made the announcement in June, he said that the relevant legal processes would be followed and gave the minister 60 days to gazette the amendment.
Outa believes this matter is urgent and not complicated and that 60 days are not required waiting time but a maximum.
Border updates, no current delays or issues have been reported at the various borders within Southern and Central Africa.
Delays were experienced at Beitbridge during last weeks’ riots where queues of up to 7km’s were being experienced, this has dissipated since the beginning of this week.
Competition in the shipping industry to be addressed, The Federal Maritime Commission and the Department of Justice Antitrust Division have signed an interagency Memorandum of Understanding (MOU) to foster increased cooperation and communication in their respective oversight and enforcement responsibilities of the ocean liner shipping industry.
FMC Chairman Daniel Maffei and Acting Assistant Attorney General Richard Powers signed the first-ever MOU between the two agencies following the executive order addressing competition issued by President Biden.
The MOU establishes a framework for the FMC and the Antitrust Division to continue regular discussions and review law enforcement and regulatory matters affecting competition in the shipping industry. It also provides for information and expertise exchanges between the agencies that may be relevant and useful in meeting their oversight and enforcement responsibilities.
The glory days for shipping lines, whose increased rates and charges have been the subject of intense scrutiny, may be over.
The International Federation of Freight Forwarders’ Sea working group has been actively campaigning against increased rates and charges from shipping lines for some time
The crackdown is believed to be part of a more wide-ranging drive to root out anti-competitive behaviour in all sectors of the US economy.
Air shipments leaving USA require full screening, The International Civil Aviation Organization now requires 100% of all international airfreight to be screened, this was implemented 1 July 2021.
Originally, only shipments originating from a known shipper transporting on a passenger airplane needed to be screened however from the beginning of this month, cargo moving on all-cargo aircrafts must be screened regardless if it’s a known or unknown shipper.
This has already caused delays in cargo moving as many airlines’ warehouses are already at full capacity with the screening adding to this woe.
Another issue with this is that the shipper will now also be paying for the screening service which is charged by the relevant airlines.
Zimbabwe economy expected to grow next year, Zimbabwe’s economy is projected to grow by 5.4 percent next year, driven by growth in mining, manufacturing, and electricity sectors.
According to the 2022 budget strategy paper presented by the finance minister during a cabinet meeting, government revenue is expected to rise to 17.8 percent of the gross domestic pro (GDP) next year from 16.4 percent in 2021.
Expenditure will also increase to 19.4 percent of the GDP from 18.2 percent in 2021.
The Zimbabwean government has projected the country’s economy to register a 7.5-percent growth in 2021, recovering from a recession last year.
Meanwhile, in order to boost foreign currency earnings from tobacco, the cabinet had approved a new policy to localize the financing of tobacco production, as opposed to the current system where the bulk of the crop is financed through offshore funding.
Tobacco leaf is one of the major foreign currency earners for Zimbabwe.
South African troops land in Mozambique, a division of the South African National Defence Force arrived in Mozambique’s Cabo Delgado province earlier this week.
An image surfaced showing SANDF plane offloading soldiers, military vehicles and equipment. The troops are said to be special forces who will form part of the Southern African Development Community’s standby force.
The deployment was originally planned for the 15th of July however Mozambique had not yet signed the status of forces agreement that would authorise regional boots on the ground.
Further details of the force are still unclear. It is also not clear to what extent the SANDF’s internal deployment to respond to the unrest in KwaZulu-Natal and Gauteng will affect South Africa’s role in Mozambique.
Exciting times for some as the snow falls! Snow has fallen over various parts of South Africa over the last few days namely in Kimberly and the Eastern Cape.
For some it’s the very first time they get to enjoy what is possibly a once in a lifetime experience whilst others may dread the cold that follows.
Here are some images of the snowfall:
Kimberley city centre:
Image via: The South Africa
Children playing in the snow:
Image Via: Times Live
Karoo National Park:
Image Via: SANParks Twitter Account
“It always seems impossible until it’s done”
No increase for July! as the steel sector waited in anticipation, no news is good news as no price increase notices were released for the month of July from the various mills within South Africa, however international steel prices still remain volatile.
This will be only the second time this year that steel prices should remain unchanged barring any other factors such as labour increases or production costs.
South Africa in the midst of the third wave, the COVID-19 pandemic has begun running riot in South Africa with cases sky rocketing. Gauteng is now currently the epicentre of the virus.
Last week President Cyril Ramaphosa placed South Africa under alert Level 3 lockdown but with the cases increasing daily there are talks being held this week that the country could move into a higher level and Gauteng itself being placed into a further lockdown beyond that of the national lockdown.
Border updates, Beitbridge border post faced a water shortage earlier this week causing some delays as the work force at the border was reduced to 50%.
However, the issue was resolved and its all systems go at the border post.
According to personnel at the border, the closure was scheduled to last for 12 hours, from dusk till dawn, starting at 6pm on Monday evening and ending at 6am the following morning but the closure lasted for 24 hours.
There were reports last week that Kasumbalesa experienced delays.
The decision by the government in Kinshasa to test cross-border truck drivers in the Democratic Republic of the Congo itself, rather than risk fraudulent PCR test results for Covid-19, resulting in a queue south of its Copperbelt border crossing in the region of nine kilometres towards Chililabombwe.
Late last week Friday DRC officials called off the decision after irate drivers started refusing to cross into DRC at its busy Kasumbalesa border.
Authorities in Kinshasa initially appeared resistant to persuasion, saying that they had recorded a significant case load of fraudulent PCR tests and that they did not have the means to verify results.
However, the Zambian government’s appeal on behalf of transporters resulted in the DRC finally deciding to accept PCR results from other countries and to roll out rapid testing free of charge in the event of drivers arriving at its border without test results.
Sea carriers looking to add additional vessels, two major shipping lines, one focusing entirely on intra-Asian cargo, have collectively ordered four new vessels to be commissioned in 2023/24, supporting the view that ocean freight is on a juggernaut growth path with no slowing in sight.
The news comes amid growing criticism among agents that carriers, the majority of whom are seeing profits well above 50% while freight rates have spiked by as much as 350%, are not investing in enough newbuilds to address the imbalance between cargo demand and service supply.
In certain instances, criticism from the freight forwarding fraternity has been downright antagonistic, with some agents accusing lines of manipulating vessel calling shortfalls to increase rates on the back of capacity problems.
However, the newbuild order book expansion by Evergreen and intra-Asian carrier SITC serves to suggest the opposite, that lines are indeed beginning to look at rebalancing service vs demand.
Zimbabwe loses a third of its gold to Smugglers, Zimbabwe last year lost around a third of its average gold production to the black market.
The smuggling of gold, Zimbabwe’s top foreign currency earner, is estimated to cost the country $1.5 billion in lost revenue per year, according to the international Crisis Group.
Most of the precious metal is siphoned off by informal small-scale miners who sell their findings to illicit gold traders rather than government-appointed officials.
Fidelity Printers and Refiners on Tuesday announced the country had lost around 11 tons of gold to “leakages” in 2020.
The losses were mainly due to payment delays caused by foreign currency shortages that encouraged miners to sell to smugglers instead, FPR’s head of gold operations, Mehluleli Dube, told a parliamentary mining committee.
Gold miners are usually paid in US dollars, a much more stable and desirable currency than the ever-depreciating Zimbabwean dollar. They were legally obliged to sell 40% of their earnings to the central bank at the official exchange rate but that obligation has been reduced to 20% in an attempt to lure miners to bring gold to Fidelity Printers.
Zimbabwe’s official gold production dropped from a record 33.2 tons in 2018 to 19 tons last year mainly due to fewer deliveries from scall-scale miners. It is noted that small scale miners only sold 9.35 tons of gold to formal buyers last year, compared to 17.48 tons in 2019.
Copper prices climb again, the price of copper regained ground on Monday after hitting a two-month low on Friday. Copper for July delivery was up 0.6% from Friday’s settlement price, reaching $9,196 per tonne midday on Monday in the New York Comex market.
China’s copper exports rose for a third consecutive month in May to reach their highest level since March of last year, customs data showed on Friday, as rising international prices encouraged traders to ship metal abroad.
However, last month’s surge in copper prices on the London Metal Exchange to an all-time high not only made imports less favorable for China, but also spurred shipments in the other direction.
Exports of raw copper and copper products amounted to 79,044 tonnes last month, up 3.4 percent from April and 67.7 percent year-on-year.
SADC leaders to send troops to Moz, Southern African leaders on Wednesday approved the deployment of the Southern African Development Community (SADC) Standby Force to Mozambique.
It is a move that demonstrated regional progress in addressing the crisis.
The deployment was approved at an extraordinary summit, held in Maputo, and attended by all 16 member states, including President Cyril Ramaphosa.
South Africa has repeatedly expressed the need for greater intervention in the region, even as Mozambique seemed resistant.
The deployment followed two extraordinary summits held earlier this year could bring some finality to the back-and-forth deliberations on how to respond to the growing regional crisis.
The SADC Standby Force acts as the region’s peacekeeping force and falls under the SADC’s Organ of Politics Defence and Security.
It is constituted when necessary, and the crisis it is responding to will determine the size of the force.
Upcoming Public Holidays:
30th June 2021 – Independence Day (DRC)
5th July 2021 – Heroes Day (Zambia)
6th July 2021 – Unity Day (Zambia)
“By crawling a child learns to stand”
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Load shedding rocks the nation, Eskom announced load shedding a little over two weeks ago with structured planning and little to no concern that it would continue into the weeks thereafter, however within this week load shedding has moved from stage 2 to stage 4 with the announcement that it is here to stay for the remainder of winter.
As expected, this has catastrophic effects on the economy as manufacturing and day to day life is dealt a major blow, this is unfortunate considering South Africa’s GDP has just grown slightly by 1.1% as well as the recent increase in manufacturing.
South African mining firms looking at a positive 2021, as most other sectors were negatively impacted by the pandemic last year, mining companies within South Africa managed to increase profits paving the way towards long term growth.
The 2021 annual review of the top mining companies found that net profits climbed above 15%, cash on hand increased 40% whilst market capitalisation rose by nearly two thirds to $1.46 trillion.
The mining sector has been boosted by higher commodity prices with major miners reporting growth in earnings, raising prospects for further investment into operations and diversification into base metal that support cleaner technologies, whose demand is expected to increase sixfold in the next two decades.
The question remains whether government can attract some of this capital through tax policy incentives as mining executives have raised concerns about tax regulations that have skyrocketed over the past 12 months.
Border updates, earlier last week there were delays reported at the Beitbridge border post, however since then no significant delays have been reported, this news is welcomed considering the major border crossing is currently under maintenance.
No concerns have been reported further north.
Major blow to South African steel fabricators, a major blow has been dealt to the South African steel fabrication industry following the decision by French oil company Total to declare force majeure on its Mozambique LNG project at the end of April due to an attack by Islamic State-linked militants the previous month.
Total acquired a stake as operator from the Anadarko Petroleum Corporation two years ago, which at the time was the latter’s largest foreign direct investment in Africa. Another significant LNG project affected is at Rovuma, with US oil company ExxonMobil delaying its final investment decision until 2023 due to the worsening security situation.
These two projects in northern Mozambique were expected to buy huge quantities of South African steel, as well as other goods and services. The total in-plant steel structure tonnage was estimated to be about 70 000 tonnes for Rovuma alone.
The LNG projects were also an important focus of the Steel Industry Master Plan unveiled by the South African government in October last year.
The first draft emphasised the need to improve on investment, expand and create jobs, promote local productive capacity via localisation and boost export-oriented manufacturing or import substitution industrialisation in line with the National Industrial Policy Framework.
Potential transport strike on the cards, this week a second round of wage negotiations for South Africa’s road freight industry, which hasn’t had a strike for nine years is now facing the prospect of labour action because of a set of tough demands made by organised labour.
According to Penwell Lunga, who chairs the Road Freight Association’s board and sits on the body’s Labour Relations Committee, labour has issued the industry with 30 demands as part of its wage negotiations.
Top of the list is a wage increase of 20% across the board for one year which could be applicable for three years provided that the industry agrees to a three-year retrenchment freeze.
In addition, Lunga told delegates that labour wanted minimal salary adjustments of R10 000, R12 000, R13 000, R18 000 and R20 000 respectively for general workers, for Code 8, 10 and 14 drivers, and for ultra-heavy drivers.
On top of that, labour demands housing allowances, a working week reduced to 40 hours without loss of pay, the scrapping of the industry’s incentive scheme system, and the removal of drive cams from cabins for monitoring purposes.
Lunga advised that the demands mentioned are well above the 20% increase and that the previously agreed 7.5% which remains until February next year had been initially reconsidered, but industry doesn’t like to go back on a binding agreement.
The negotiations are continuing this week.
Sea freight costs surge as backlog continues, cargo ships have been delivering their loads later than ever this year, adding to the supply-chain woes that are undercutting efforts by retailers and manufacturers to capitalize on resurgent economic demand.
The delays around the world, the result of a large-scale restocking by businesses as consumer demand improves, are tying up vessel capacity, adding to a shortage of sea containers needed to move goods and sending shipping costs soaring as container freight rates rise at a historic pace.
The cost of moving a 40-foot sea container from China to U.S. West Coast ports was quoted this week at $5,650, up 34.5% since the start of the year and 228% higher than the same period last year.
It is estimated that sea freight costs to South Africa have increased in the region of 40% – 55%.
There are also delays being experienced with cargo coming through to South African ports as shipping lines are now waiting until the vessels are loaded to 100% capacity before departure, these delays are being experienced with direct vessels and especially transhipments where delays of up to 4 weeks can be experienced.
Delays at US ports, congestion continues to weigh on Trans-Pacific ocean cargo, especially on the US west coast where demand has been outstripping port capacity for most of the year.
In the latest development German line Hapag-Lloyd has announced that it will not call at the Port of Oakland because of ongoing congestion and delays for the foreseeable future, the decision involves two services, with the omissions expected to last until August unless improvements are made at the port.
Incidentally, volume to Oakland has been steadily increasing because of berthing diversions down south at the ports of Los Angeles and Long Beach where congestion has played havoc with throughput.
Among other things, it resulted in Oakland recording a cargo-handling record of 100 096 import TEUs in April.
It’s the first time that the port has exceeded the 100,000 mark of containers handled in one month.
Zimbabwe gold miners optimistic, gold production declined over the past two years but miners remain optimistic of the country’s potential to achieve its target of producing 100 tonnes yearly as challenges experienced by the sector can be overcome.
Zimbabwe’s gold production had dropped from 35 tonnes in 2018 to 20 tonnes last year because of erratic electricity supplies and inadequate foreign currency.
Another major problem was a lack of meaningful exploration over the years to recognize new deposits to allow the opening of new mines and expand existing ones, however new measures have been adopted by the government which could allow the opportunity to revive production and grow the sector.
These include the review of the foreign currency retention ration to 80:20 for all increases in production, the improved turnaround in payment and the ongoing processes to come up with a gold sector policy framework.
The country has in the past experienced slumps in production, back in 2008, production fell to just 3 tonnes. The Zimbabwe Mining Development Corporation expects to ramp up production at its Sabi and Jenna Mines to 1,680 tonnes annually by 2023.
FQM pays huge tax to Zambian government, Zambia’s largest taxpayer, First Quantum Minerals, paid more than US$850 million in taxes, royalties, duties and fees to the Zambian government.
To put it into perspective, the contribution paid to Zambia represents 78% of the entire contribution FQM paid globally, The company also has operations in Australia, Finland, Mauritania, Panama, Spain and Turkey, as well as exploration prospects in a number of other countries.
Despite the additional challenges faced in 2020, FQM achieved its highest ever annual copper production, which was reflected in the increased amount of its contributions to Zambia’s public finances.
FQM paid approximately US$209.5 million in mineral royalties and a further $202.8 million in company income tax in Zambia during 2020.
As part of the company’s voluntary disclosures, the report reveals that USD$6.5 million was spent on community projects, and infrastructure support during 2020.
In addition to its regular community programmes, the Company provided Covid-19 testing equipment, PPE and treatment and isolation facilities for the surrounding communities in North-Western Province, including a new ICU and high dependency care unit at Solwezi General Hospital.
Terrorism fight, top priority for Cabo Delgado, President Filipe Nyusi on Wednesday demanded that the newly appointed Secretary of State for the northern province of Cabo Delgado, Antonio Supeia, make further efforts in the fight against the terrorism that has plagued parts of the province since October 2017.
Nyusi insisted that the Secretary of State for the province must monitor the programmes to assist the displaced.
At the ceremony in Maputo where he swore Supeia into office, Nyusi also stressed the need to guarantee social welfare and health care for the hundreds of thousands of people displaced from their homes by the terrorist attacks.
On the back of this, The United Nations Children’s Fund has promised to increase its support for child victims of terrorism in Cabo Delgado from an estimated 51 to 90 million US dollars.
This promise was made by the UNICEF Regional Director for Southern and Eastern Africa, Mohamed Malick Fall, who is currently on a visit to Mozambique to learn about the impact of the terrorist attacks and the impact it has had on children.
Although the exact number of vulnerable children in Cabo Delgado was not yet known, Fall promised that UNICEF will increase its support as the current levels of aid are insufficient.
Upcoming Public Holidays:
16th June 2021 – Youth Day (South Africa)
“Not everyone who chased the Zebra caught it, but he who caught it, chased it”
As expected, a big hit to the steel sector, following on from our previous publication, it was expected that there would be a steel increase for the month of June and unfortunately the news broke last week Friday as ArcelorMittal announced another increase with prices increasing across the board in the region of 8%-10% on base product.
This, once again, is another blow to the sector and downstream players with contracts and projects continuously being re-looked at as well as critical stock levels affecting delivery times.
Following extracted from an article published by CNN 19/05/2021
China and the United States are in a race for scarce commodities to rebuild their economies after the pandemic. That’s pushing prices through the roof — and is now threatening to throw Beijing’s recovery plans off course.
The cost of everything needed for China’s post-pandemic infrastructure boom, from steel and coal to glass and cement, is soaring. The price of rebar, a type of steel used to reinforce concrete, recently hit 6,200 yuan ($965) per metric ton in Shanghai, up 40% this year, and a new record high. Iron ore, which is used to make steel, has topped 1,240 yuan per metric ton ($194) on the Dalian Futures Exchange, a 25% increase since the start of the year.
Thermal coal, glass and aluminum are hitting all-time highs in China. The price of plasterboard is rising too. The situation with steel has become so acute that China’s leaders are warning of damage to the economy. And a popular idiom for defenseless — “without an inch of steel in hand” — is now being used much more literally on social media to describe desperate buyers.
China was the only major economy to dodge a recession last year when the pandemic hit, but it launched a $500 billion infrastructure-led plan to support its recovery from the slowest rate of growth in decades.
Construction is also part of the economic recovery in the United States and may accelerate soon. President Joe Biden proposed in March a roughly $2 trillion infrastructure plan aimed at helping the nation recover from the coronavirus pandemic, and reshaping the US economy to counter China’s rise.
“Small businesses are facing even tighter cash flows, because they have less negotiation power when prices increase in their upstream sector,” wrote Luo Zhiheng, chief macro analyst for Guangzhou-based Yuekai Securities. “They either have to accept higher production costs, or cut their production and sit on the sidelines.”
Recovery efforts hit a snag
The spike in steel and iron ore prices comes down to a combination of factors. Along with construction, electric vehicle production is also fueling the rise, according to analysts at Fitch Ratings. Cars need high-strength steel that can reduce weight and improve performance, and production of electric, hybrid and fuel cell cars have been skyrocketing.
China’s efforts to reduce carbon emissions has also caused steel supply to tighten, the analysts wrote in a report this week. China produced more than half of the world’s output of steel last year, and Beijing has been pressuring the industry to reduce output in pursuit of its goal to become carbon neutral by 2060.
A bruising trade battle between China and Australia may also be inflating prices. Beijing has put up barriers to entry on several Australian exports over the last year, including coal. While one of Canberra’s most important exports, iron ore, has been spared, Beijing has been looking for ways to reduce its reliance on the country.
There are already some signs that the price hikes are hitting China’s construction sites and factories, according to Wang Jiechao, chief construction sector analyst for Pacific Securities. He wrote in a Monday report that many construction companies, foundries and small household appliance manufacturers have stopped taking orders because of production losses.
“The rapid increase in commodity prices has seriously eroded the profitability of downstream manufacturing companies,” Wang added.
A recent survey of 460 construction companies nationwide revealed that many firms are feeling the pinch. Some 56% of respondents to the survey — conducted by 100njz.com, a Chinese construction industry data provider — said that the price hikes have affected their work schedules to varying degrees. Among them, 30% said they have suspended construction to control costs, while the rest have slowed projects down.
Meanwhile, 44% of the respondents to that survey said that although they are still moving ahead with construction as planned, they have had to reduce their steel purchases, which could lead them to consider suspending work in the future.
It’s also bad news for employment, according to Luo of Yuekai Securities, who noted that small businesses are struggling with the price hikes and also account for 80% of the country’s urban jobs.
Luo pointed out that April’s unemployment rate for young people aged 16 to 24 remained high at nearly 14% and their working hours decreased, “possibly because small businesses were running below capacity under the pressure of rising costs.”
Prices are rising everywhere you look
China is still exporting a lot steel, but the government is starting to discourage that in a bid to shore up supply at home. Authorities announced in April that starting this month, they would end export tax rebates for most of the steel products. Customs officials have also cut import tariffs for some steel.
Local governments, meanwhile, have opted for harsh measures in a bid to keep prices down. Late last week, regulators in Shanghai and the steelmaking hub Tangshan summoned major steel mills and ordered them to fix their prices “at reasonable levels.” Mills could face “severe punishments” if they collude to drive up steel prices, according to government statements.
Major futures exchanges in Shanghai, Dalian, and Zhengzhou have also tightened trading rules for steel or coal contracts, and have raised trading fees to cool down the market. Three top coal index compilers even stopped publishing daily updates. The move was to “stabilize market prices,” the state-backed China Coal Transportation and Distribution Association, one of the index compilers, said last week.
Still, prices for the metals remain elevated. And some analysts have pointed out that it will be tough for China to reign in commodity prices without compromising elsewhere.
Certain areas within South Africa are again plunging into total darkness without any prior notice from Eskom as the embattled state power supplier continues to struggle to keep the lights on across the nation which in turn affects all industries within the country, adding further costs to production as producers look to other means of power supply.
South Africa’s manufacturing surges, by 3.4% month-on-month according to data received for March.
The above-average output lifted the volume index to 99.6, a level last seen in January 2020. Last year the index had dropped to 54 by April, the lowest level it had been on record.
In comparison, by March this year, the level of production was up by 4.6% year-on-year.
It is noted that the annual recovery was driven by the manufacturing of food and beverages, as well as motor vehicles and parts.
Border updates, and the recently opened One Stop Border Post at the Kazungula Bridge between Zambia and Botswana has already resulted in a significant reduction in the time it takes hauliers to use the once-treacherous Zambezi River crossing.
Delays, especially during last year’s coronavirus outbreak which caused mass disruptions on either side of the river, were further exacerbated by heavy rains earlier this year, with at least, on average one if not two of the three pontoons frequently being out of order, the rush to make up for lost time often resulted in trucks slipping off the ageing ferries.
However, this seems to be a thing of the past now as transit times have gone from an average 40 hours in April to 22 hours since the bridge opened on May 10, operations are going smoothly with minimal teething issues.
Transporters can now rejoice as one of the region’s most notorious border crossings has been wholly transformed.
No further delays or updates have been reported at Beitbridge or Kasumbalesa.
Protests claim a life, and the South African Police Service has confirmed that a driver burned to death in his cab last night on the outskirts of Harrismith after protesters threw stones at his truck on the N5 highway.
Protests over service delivery flared up earlier in the week along the N5 and N3 highways, major pass throughs between Durban and Johannesburg.
Whilst the police have been monitoring the stretch of road during the week, unfortunately the loss of life occurred.
Record copper price not all good for Zambian miners, and copper mining companies in Zambia are at odds with the record prices of copper, which have brought them significantly higher royalty bills than previously under the country’s current tax regime.
Zambia uses a sliding scale to determine its mining royalty rate for copper, linked to the international copper price. The scale is adjusted in that royalties are paid at higher levels as the commodity price climbs and is reduced as prices fall.
Starting at the minimum threshold of 5.5% when the copper price is less than $4,500/mt, rising to 10% when the copper price is $9,000/mt or higher. Which in turn means that copper mining companies are currently paying the maximum threshold for mining royalties.
Since 2019, when the new Zambian mining tax regime came into effect, mineral royalty payments have not been treated as a deductible expense when calculating corporate income tax. Income is taxed at the rate of 30% a year for base and industrial minerals miners. The effect of this is that mining companies are paying “double tax” as the companies are taxed on income that has already been paid over as a royalty.
Zambia is highly dependent on mining as its major productive industry, with the sector contributing 10% to the country’s GDP in 2019. Zambia’s mining sector accounted for 28% of the government’s revenues and 77% of export earnings, with copper accounting for over 90% of the sector’s exports.
In 2020, large scale copper mining companies recorded an increase in total copper production of 9.7% year on year.
Kamoa-Kakula starts production ahead of schedule, the joint venture between Ivanhoe Mines and Zijin Mining has achieved production several months ahead of schedule.
Whilst the company has described this feat as a “historic achievement” President of DRC, Felix Tshisekedi has said that the country is open for business and investment.
Although this exploration journey started well over two decades ago, it is also noteworthy that the Kakula deposit itself was discovered just over five years ago, which is remarkable progress by the mining industry.
In April, the Kakula mine mined 357,000 tonnes of ore grading 5.70% copper including 121,000 tonnes grading 8.40% copper from the mine’s high-grade centre.
Kakula is anticipated to be the highest-grade major copper mine in the world with an initial mining rate of 3.8-million tonnes a year, with an expected climb to 7.6-million tonnes a year in the third quarter of 2022.
Phase 1 is expected to produce 200,000 tonnes a year of copper and phases 1 and 2 combined are forecast to produce 400,000 tonnes a year. The current copper price also allows Ivanhoe and Zijin to mull over the acceleration of the Kamoa-Kakula Phase 3 concentrator.
France, the latest nation to aid Mozambique, after meeting with the French president, President Filipe Nyusi of Mozambique has advised that France has shown “complete willingness” to provide whatever is necessary for Mozambique’s fight against terrorism in the northern province of Cabo Delgado.
France has shown support but has left sovereignty in the hands of Mozambicans.
This appears to mean that any French assistance in the fight against Islamist terrorism will take into account the lines of intervention laid down by the Mozambican government.
The two countries must advance quickly to sign the agreements which will define the type of support granted by France.
As reported in the previous publication, the Portuguese government has also stressed its readiness to assist Mozambique in the fight against terrorism.
Some Portuguese troops are already in Mozambique providing the Mozambican defence and security forces with technical assistance and training.
The aim that the Mozambican government is to build up the capacity of the country’s own military than to rather have foreign intervention.
“Rain beats the leopard’s skin but it does not wash out the spots”
Another increase looming! Two of the major mills within South Africa have notified that there is a potential increase in the range or R1500.00/Ton for the month of June.
The country waits in anticipation for notice from the biggest mill within the country, ArcelorMittal, if there will be another increase on the back of the previous staggering R2500.00/Ton
To add to the industry’s wounds, the Rubber and PVC sector experienced a 17% immediate effect increase, the first of its kind. The increase has caused a serious impact on current projects and contracts.
South Africa mining output soars, The March reading was the first positive one since February last year, after the February 2021 number was revised into negative territory.
The 21.3% leap was partly attributable to base effects. In March last year, mining output declined 14.9% year on year as mines cut production and sent workers home ahead of the start of the hard lockdown later that month.
This was the biggest bounce since March 2015, when a rise of 21.8% was recorded, the biggest record was noted in October 2013 at 23.2%.
The latest number is clearly a positive sign for the sector and the overall economy.
The April number will almost certainly be a new record, in part because of base effects after mining output declined 51.7% in that month last year. Stay tuned for that number, it’s bound to be a whopper.
Border updates, on the 2nd of May the Zimbabwe Revenue Authority announced that there will be upgrades taking place at the Beitbridge border post which is going to cause significant delays for up to six weeks.
The upside for cargo going north is that the long awaited Kazangula bridge has finally been opened, as of 10 May 2021 the bridge is now fully operational.
Kazungula was meant to be completed by 2018, but the government in Lusaka’s consistent failure to meet financial commitments, as agreed with Daewoo, regularly delayed work on the bridge.
Speaking at Monday’s opening of the Kazungula multimodal bridge across Zambia’s Zambezi River border with Botswana, Zambia’s President Edgar Lungu recommitted his country to building another bridge that will possibly change the face of bulk-haul logistics in the sub-Saharan region.
Temporarily called the Kasomena-Mwenda toll road bridge and border post, the project entails an upgrade of the N5 from the copper-mining nerve centre of Lubumbashi north-east to the Luapula River between the Democratic Republic of the Congo and Zambia.
The crossing will most likely be immediately south of Kasenga from where it will proceed in an easterly direction before heading north-west to Zambia’s Nakonde border post with Tanzania.
Copper price hits new high, shortages of copper and declining inventories could drive prices to levels beyond current record highs unless scrap supplies increase.
Scrap accounts for about a third of the roughly 30 million tonnes of annual global copper supplies, as copper prices rise, the flow of scrap accelerates as the market attempts to cover the gap between demand and supply.
Copper for delivery in July was up 0.9% earlier this week, with futures trading at $4.7620 per pound ($10,476 a tonne) on the Comex market.
Bank of America expects a deficit of 186,000 tonnes this year and a shortfall of 369,000 tonnes in 2022, followed by surpluses in the two years after.
China’s massive purchases of refined copper have been the primary driver of the post-pandemic price rebound, but the Chinese push may be fading.
In 2020, China imported 4.4 million tonnes, up 1.2 million tonnes from 2019.
Barrick on track to achieve 2021 production targets, the company reported preliminary Q1 sales of 1.09 million ounces of gold and 113 million pounds of copper, as well as preliminary Q1 production of 1.10 million ounces of gold and 93 million pounds of copper, in line with their plan.
The average market price for gold in Q1 was $1,794 per ounce, while the average market price for copper in Q1 was $3.86 per pound.
Preliminary Q1 2021 copper production was 22% lower than Q4 2020 as expected. Copper sales were 5% higher than the previous quarter as Lumwana sold a portion of its stockpiled concentrate.
Barrick expects copper production in the second half of 2021 to be stronger than the first half, mainly driven by higher grades from Lumwana.
Caledonia closes off first quarter, Caledonia Mining recorded gross revenues of $25.7-million for the quarter, with higher revenues year-on-year thanks to a higher gold price, offset by lower sales as a result of lower production.
Caledonia reported net cash from operating activities of $2-million for the quarter. Cash from operations was adversely affected by increased working capital, in particular higher amounts due for gold sales.
The responsibility for making payments for gold deliveries from the Blanket gold mine, in Zimbabwe, has moved from the Reserve Bank of Zimbabwe to its gold refining subsidiary Fidelity Printers and Refiners.
The company believes this move will streamline and improve receiving payments for the gold it produces and says this new system is operating well.
Caledonia paid dividends in the quarter of $0.11 a piece which is a 46.7% increase year-on-year and the quarterly dividend increased by 9% to $0.12 a piece in April.
Zambia denies shutting KCM, reports emerged that KCM’s mining operations had been stopped at Konkola Deep underground pit and other KCM plants because of a lack of funds to develop new mining areas.
It is noted that at no point has operations been halted or even stopped and that production has been continuous throughout.
Zambia handed control of KCM to a provisional liquidator in May 2019, triggering an ongoing legal dispute with Vedanta.
Konkola Copper Mines is currently operating and there are no plans to put it on care and maintenance.
Zambia’s economy is heavily reliant on mining, making the sector highly politicised especially as the country heads into a general election in three months’ time.
With copper prices at a ten-year high Africa’s second-largest copper producer which defaulted on part of its sovereign debt in November stands to gain from ramping up production at key mines.
DRC President visits KCC in recognition of investment, DRC President Felix Tshisekedi visited Glencore’s Kamoto Copper Company (KCC) in Kolwezi, yesterday, in recognition of the miner’s near $8-billion investment in the country.
KCC is a joint venture between Glencore and DRC commodity trading and mining company Gécamines, which conforms to the Responsible Minerals Assurance Process standard for cobalt as defined by the Responsible Minerals Initiative.
KCC represents a key part of Glencore’s investment in the DRC, with its modern infrastructure and a significant copper cobalt orebody, which the company states makes the operation a key component to achieving the global energy and mobility transitions.
Following its successful ramp-up in 2020, KCC is on track to achieve nameplate capacity of 300 000 t/y of copper and 30 000 t/y of cobalt production.
Portugal to send more troops to Moz, Portugal will send 60 more soldiers to Mozambique as part of a new cooperation agreement aimed at helping the southern African country to fight insurgency.
Sixty members of the Portuguese special forces are already training soldiers in Mozambique, following the deadly attack in March in the village of Palma, Cabo Delgado, in the northern part of the country.
The agreement, which is in place until 2026, allows Portugal to train Mozambican soldiers on fighting insurgency, sharing intelligence and helping the country using drones to track insurgents’ movement.
The US has also helped Mozambique with training of defence personnel to fight terrorism with the European Union preparing to send soldiers to Mozambique to help fighting insurgency.
Upcoming Public Holidays:
17th May 2021 – National Day of the Revolution and the FARDC (DRC)
25th May 2021 – Africa Day (Zambia and Zimbabwe)
“Some people feel the rain, Other just get wet”
Steel price increase reminder! As of 1st May 2021 steel prices on flat product in South Africa will be increasing by R2,250 ton as announced by ArcelorMittal earlier this month, the biggest single increase the country has seen, taking the grand total of increases this year to R6000,00 ton.
Thankfully there has been no increase notices from the other steel mills within South Africa.
Introducing Thungela Resources, Anglo American PLC will be separating its South African coal mines into a new business this year.
Anglo American has been mulling an exit from thermal coal for over a year now and constantly reiterated that separating its South African business was the most likely outcome.
The new business, known as Thungela Resources Ltd is expected to be listed in Johannesburg and London in June. Investors will receive one Thungela share for every ten Anglo American shares.
The world’s biggest miners have been looking to exit thermal coal mining as investors say they don’t want exposure to the fuel and pollution. Anglo American PLC has already dramatically reduced its production in recent years, cutting output by more than half.
Implats Q3 production rises, South Africa’s Impala Platinum’s third quarter group output rose by 4% to 5.59 million tonnes at managed operations, with higher volumes reported at Impala Rustenburg, Impala Canada and Marula.
High prices for metals mined by Implats such as platinum, palladium and rhodium gave the mining company a lifeline despite the impact of the COVID-19 pandemic.
The platinum miner said group production in the nine months to March 31 rose by 11% to 17.38 million tonnes, the miner also noted the benefits from the inclusion of Impala Canada, which was bought in 2019, for the full reporting period.
Border updates, last week, transporters working the North-South Corridor into the Copperbelt and back were advised that there were holdups being experienced at Chirundu Border Post between Zambia and Zimbabwe.
The queue was roughly around 7kms long with around a 2-3 day waiting period for when trucks could move, there was no real confirmation as to why the border had a hold up, as it stands, its business as usual at the Chirundu border.
Staying in Zambia, there is some good news looming, with the leaking of the anticipated Kazangula bridge being opened. An inside source has told the Transit Assistance Bureau that a date has been proposed for the long-awaited opening of the Kazungula Bridge being May 10.
Although it seems too close to be true, being less than two weeks away, transporters are becoming quite excited by the announcement made by Transist.
The long-delayed structure, which was completed last September may finally be opened after being closed to traffic while public sector concerns were delaying the process and Zambia’s perennial cash flow issues impeded its ability to pay its share of fees to the contractors.
As of today, transporters entering Botswana via Pioneer Border Post from South Africa have been advised that health authorities in Gaborone have reinstated the PCR test.
The testing measures at the border has been tightened because drivers have been diverting their journeys to Pioneer because of not having to furnish PCR results.
The news has had an immediate effect in cross-border transport circles, with hauliers saying PCR costs which are roughly $46 and regular transits in and out of landlocked Botswana are going to hit them hard.
The pandemic has affected all forms of transport over the past year whether it be road, sea, air or rail transport and it seems that the struggle will continue for some time as ocean freight costs as well as air freight has surged with no positive outlook at the moment, in some countries such as America, it is noted that cargo can sit up to a month before it can be moved to the ports for transport.
Iron ore demand drives global steel prices, steel prices are spiking from Asia to North America, and iron ore’s relentless march towards a record is accelerating, as bets on a global economic recovery fuel frenzied demand.
The outside world is finally catching up with the Asian markets as a global rebound drives a powerful wave of buying that cannot be matched by production.
The manufacturing and construction sectors are ramping up production as governments have pledged to splurge on infrastructure as they set their eyes on post covid growth.
Prices for hot-rolled coil are up three times the “normal” price in North America and they continue to soar in Europe. In China, steel is at its most expensive since 2008.
It is expected that worldwide steel demand will grow 5.8% this year to exceed pre-pandemic levels, China’s consumption which contributes to about half of the global total will keep growing from record levels, whilst the rest of the world rebounds strongly. It is noted that demand outside of China in April has been higher than that of previous years.
Iron ore is enjoying a near record level as spot prices are less than $1 away from their peak of $194/tonne. China’s steelmakers keep output rates at more than a billion tonnes a year to supply consumption to the ever-demanding economy, Beijing has set a goal of reducing steel production this year however that could prove difficult with consumption as strong as it currently is.
Top miners are enjoying their takings as Iron ore prices have bolstered their earnings even though they continue to struggle to supply enough of the raw material.
On the Stainless Steel front, the Chinese government has cancelled all tax refunds for Stainless Steel sheet, plate, pipe and fittings thus increasing production cost by roughly 13%.
Zimbabwe gold output down, Zimbabwe’s gold production fell 30% to 3.98 tonnes in the first quarter of this year, while export earnings from the yellow metal also declined.
The Reserve Bank of Zimbabwe did not give a reason for the decline, but small-scale miners who produce half of the mineral blamed the abnormal rainfall during this period which in turn resulted in shafts being flooded.
The Reserve Bank said the nation, which faces constant shortages of foreign currency earned $200 million from gold exports in the first quarter which is down from $226 million during the same period last year.
Total gold output tumbled nearly a third to 19 tonnes last year after small-scale producers diverted the metal to illegal private dealers who pay more than the central bank.
Zambia assures investors of better policies, Zambia’s president Edgar Lungu assured mining investors, in a speech this past Thursday, that his country will develop a more simplified tax administration system to facilitate them.
Zambia’s mining tax regime has been a thorny issue since the privatization of mines in the early 1990s. He said the he expects the mining investors to take advantage of the improved copper price of close to $9,000 a ton to up production and create jobs which in turn should fulfil the investors social responsibilities to benefit the locals.
Zambia is Africa’s second highest copper producer and is hoping to increase its production from the current 800,000 tons per annum to a million tons per annum.
The key to achieve this goal will be through a continued working relationship with investors such as First Quantum Minerals, which runs the country’s biggest mining operation at Kalumbila, northwest of the country.
Jubilee’s Project Roan delivers its first copper concentrate, the successful delivery of copper concentrate from Project Roan to the fully operational Sable Refinery is the first major step in the company’s commitment to achieve the targeted production of 25,000 tons per annum of copper within the next four years and taking a leading role in the processing of surface tailings in Zambia.
Project Roan is the first of three copper processing facilities that Jubilee target to implement to achieve this goal. Completion of Phase 1 on schedule demonstrates the team’s ability to deliver on their goals in a new jurisdiction.
The targeted significant ramp up of copper operations in Zambia is expected to further improve on Jubilee’s recently published record interim results for the six-month period to 31 December 2020, generating long term, quality earnings.
The company is confident that the completion of Phase 2 of Project Roan will be on time during Q3 2021, which will further increase the copper concentrate being delivered to the Sable Refinery.
Kamoa Copper launches corporate identity, Kamoa Copper will operate the Joint Ventures mines in the high-grade Kolwezi copper district of Lualaba, in the Democratic Republic of Congo.
Ivanhoe Mines and Zijin Mining each own 39.6% of Kamoa Copper, while the DRC government owns the balance.
The Kamoa-Kakula project which is operated by Kamoa Copper, is expected to begin producing copper in July and through its phased expansions, will become one of the world’s largest copper producers.
According to a progress update issued by Ivanhoe in April, Kamoa Copper shattered all previous records in March, mining 400,000 tons of ore grading 5.36% copper, including 100,000 tons of ore grading 8.7% copper from the centre of the Kakula mine.
The company’s first phase of its 3.8-million-tonne-a-year mining and milling operation is 92% complete and the commissioning of its concentrator plant is under way.
Troika summit in Mozambique postponed, The Southern African Development Community has postponed an Extraordinary Troika Summit of the Organ on Politics, Defence and Security due to the unavailability of heads of states.
The leaders of SADC agreed to the postponement as SADC Organ chairperson, Botswana president Dr Mokgweetsi Masisi is currently in quarantine and incoming chairperson South Africa president Cyril Ramaphosa has been testifying at the Zondo Commission on South Africa.
The meeting, which was expected to take place this past Thursday in Maputo, is now expected to take place at a later date.
When the heads of state met on April 8, they, among other things, mulled over measures to address terrorism in Mozambique after the continued attacks by the Islamist insurgents in Cabo Delgado where dozens of civilians were killed and many others displaced.
SADC leaders directed an immediate fact-finding mission to assess and investigate the situation on the ground in Mozambique before and form of response is actioned.
“Seeing is different than being told”
Biggest one yet! ArcelorMittal SA has just recently given out notice of yet again another steel increase for the month of May, the increase sitting at a staggering R2,250.00 per ton is the biggest one yet.
This will now be the fifth consecutive increase this year with a possible positive outlook in the third quarter where prices are expected to drop.
Along with increased fuel, electricity and labour hikes this won’t be the end of the dark road within the steel sector.
With material being so scarce in South Africa and constant price increases, will SA still be an important game player within the steel sector? Only time will tell.
Border updates, there has been an increase in hijackings at the Beitbridge border post and with the latest developments, Ekhuruleni police officers have been implicated as accomplices.
The National Traffic Anti-Corruption Unit (Ntacu) has slammed the brakes on a traffic and police officers’ syndicate, which has allegedly been hijacking trucks on major Gauteng transportation routes.
The investigation is ongoing and more arrests can be expected. The suspects are expected to appear in court soon.
This seems to be the only burning issue of this nature across Southern Africa borders.
We would like to extend our deepest condolences to the family of the driver who tragically and unnecessarily lost his life in a robbery at Beitbridge recently.
Ever Given consequences being realised, not only has Egypt filed a multi-million pound compensation claim against the owner of the container ship but Suez Canal Authority has also estimated a $300 million bill for “loss of reputation” and an equal amount charged as a “salvage bonus”.
The responsibility for this massive mishap, that took at least 800 people and more than a dozen tugboats to correct, is now a ping pong between the Japanese vessel owner and the line operator Evergreen.
General Average (GA) was declared by the owner of the vessel which means that there is a potential of spreading the cost of significant expenses amongst shippers.
PowerChina hydro project delayed, work on the 2,400-megawatt facility had been scheduled to start in 2020, but yet another victim of the COVID-19 pandemic, this $4 billion hydropower plant has been suspended until towards the end of 2022.
This project awarded to General Electric Co. and Power Construction Corp. of China aims to ease electricity shortages to both Zambia and Zimbabwe will potentially be funded by domestic pension funds in Zambia and Zimbabwe.
Trade and Development Bank a Bujumbura which is a Burundi-based multilateral lender, has been appointed as the lead co-ordinator for financing the project.
A new coal player in Zim, Contango Holdings’ Lubu project in Zimbabwe, which comprises a substantial coking coal resource, ticks all the right boxes to deliver a financially lucrative business.
Lubu covers 19,236 hectares of the highly prospective Karroo Mid Zambezi coal basin which is located in the Hwange mining district in North Western Zimbabwe.
Historically, around US$20 million has been spent on advancing the project, including the completion of a pre-feasibility study, resourced modelling and mine planning with test work to confirm the presence of thermal and coking coal.
Contango started as a shell company looking to acquire a near-term production asset rather than an exploration asset, and this led to its interest in and purchase of Lubu.
Having reviewed multiple assets, it was determined that Lubu was a project that could bring into production quickly without the need for years of geological work to validate it. With extensive geological work completed, there was no exploration risk involved in the asset.
ZISCO seeking new investors, Zimbabwe’s state-controlled iron and steel company ZISCO has invited new investors to help revive operations at the company that has been the target of interest from Indian and Chinese investors in the past.
ZISCO acting chairman Martin Manuhwa said earlier this week that the firm was again looking for new investors interested in resuscitating the company.
The successful investor would be expected to contract out at least 35% of engineering, procurement and construction business to the local community.
ZISCO owns an iron ore mining unit with an installed capacity of 2.16 million tonnes of ore a year as well as a wire products company.
Interested investors should submit their expression of interest by April 30. Successful investors would then be invited to participate in the bidding process for the funding.
CATL to acquire stake in Kisanfu, Battery maker Contemporary Amperex Technology (CATL) will be acquiring a stake in the Kisanfu copper-cobalt mine in the Democratic Republic of Congo for $137.5m.
According to the agreement, CATL New Energy will acquire 25% in China Molybdenum (CMOC) unit KFM Holding, KFM Holding owns a 95% stake in Kisanfu mine while the remaining 5% stake is held by the DRC Government.
The deal is expected to provide CATL with access to what is claimed to be one of the world’s largest, highest-grade undeveloped cobalt and copper projects.
Hunger threat, Almost 1-million people face severe hunger in northern Mozambique, where hundreds of thousands have fled Islamist militant attacks, the UN food agency advised earlier this week.
Islamic State-linked insurgents in March attacked Palma, a town in Cabo Delgado province next to gas projects under development by companies including Total and Exxon. All work in the region has since come to halt as the threat levels are at its peak.
The World Food Programme has noted that 950,000 people are now hungry in Mozambique and has appealed to donors for $82m to confront the crisis.
It seems that that the world has finally opened its eyes as SADC leaders all met in Maputo to discuss a way forward and to determine the response required to fight off the insurgents.
Zimbabwean President Emmerson Mnangagwa said the meeting also agreed to revive a so-called SADC brigade to intervene in the conflict.
It is not confirmed that Mozambique has agreed that SADC forces would help the government fight the Islamic State-linked insurgency.
Under SADC rules, a member state must make an official request for the group to deploy the brigade.
SADC leaders are scheduled to meet again on April 29 to discuss the issue.
“Sticks in a bundle are unbreakable”