Steel price increase! With the current steel woes South Africa is facing, there is a steel increase on the cards for January 2021, so far two major mills have announced an increase across the board of around 3-6% on all products whilst the industry anxiously awaits an announcement from ArcelorMittal.
So far the steel shortage situation remains the same as we eagerly await Mittal’s furnaces to fire back up early next year.
There are also concerns coming from the Manufacturing and Engineering sector that the possible 10% electricity hike for next year could be detrimental to the revival of the sector.
Border updates, there has been a complete U-turn at Beitbridge, following for the previous positive update, Beitbridge is once again bottlenecked.
The southbound queue of loaded and backhaul trucks heading out of Zimbabwe to South Africa is again being snagged by bottlenecking at the Beitbridge Border Post. Zimra has said that they are doing everything in their power to relieve the congestion. So far the northbound queue is clear.
South Africa’s Skilpadshek Border Post which is on the Trans-Kalahari Corridor (TKC) through Botswana continued to be affected by slow coronavirus testing procedures this morning. According to the Transit Assistance Bureau, the building backlog at the border stems from Botswana’s inability to cope with the testing of truck drivers for Covid-19.
A decision taken last month to not test drivers coming from South Africa who are in possession of a polymerise chain reaction (PCR) negative test result which is not older than 72 hours has not had the impact they thought it would have on easing congestion.
The notion that Botswana seems incapable of coping with capacity requirements for testing drivers not in possession of PCR results only serves to support criticism that the country’s inflexible Covid-19 testing regimes are impeding its strategic logistics position in the sub-Saharan region.
In the meantime, transporters using the TKC to get to Namibia are increasingly avoiding the corridor, preferring instead to bypass Botswana altogether which in turn has bottlenecked the Nakop Border post in Namibia.
Container rates soar, exports from South-East Asia have recovered fast from the COVID-19 pandemic however the shipping costs have climbed drastically.
This is due to a high demand and no supply as trade routes have been interrupted by the pandemic. Shipping lines are also taking advantage of this by using the peak season surcharge as a reason.
The cost of putting one container on a ship can cost in the region of $5,000.00 up from an average of $1,300.00 earlier this year.
It is expected that the current rates will continue into early to mid-next year.
Rio Completes Copper Project, Rio Tinto has completed the initial work on the Midnight Sun Mining’s Solwezi Licenses in Zambia.
After incurring project expenditures in excess of $3 million during the initial work phase, Rio will now proceed to the next stage of the agreement.Top of Form
This would allow the company to earn a 51% interest in the Solwezi licenses by spending a further $16 million on the project within four years, as well as by making cash payments to Midnight Sun.
The project is situated on the Zambia-Congo copper belt and is immediately adjacent to Africa’s largest copper mining complex, First Quantum’s Kansanshi mine.
Zambia in negotiations with IMF, Zambia has just begun negotiations for financial support from the International Monetary Fund. The IMF announced this in an official statement
This announcement comes at a time when the Zambian economy has been declining due to several years of crisis. Drought, difficulties in the mining sector, and rising debt had pushed the country to adopt austerity measures in recent years to cope with the situation. However, the covid-19 pandemic that has plagued global economic activity has contributed to the accelerated decline of the Southern African country’s economy.
Great Dyke Sells Stake, Great Dyke Investments who is planning to build Zimbabwe’s biggest platinum mine, has sold a 4.4% stake to Fossil Mines as Covid-19-disrupted fundraising for the venture.
Fossil, which is Zimbabwean owned, will invest $30m in the Darwendale project, through a combination of cash and services, including engineering, procurement and construction. That leaves Vi Holding and Zimbabwe’s Landela Mining Venture each with a 47.8% stake. The sale values Great Dyke Investments at $680m.
The covid-19 pandemic has delayed fundraising for the project, which was originally due to be completed in 2020. Financing of $665m is now expected to be finalised in the first quarter of 2021.
The Darwendale project has the potential to become one of the world’s biggest platinum mines and its development is central to the Zimbabwean government’s plans to reboot a collapsing economy.
Zimbabwe has the world’s third-largest platinum group metal reserves after SA and Russia.
Millions lost to illicit mining, Zimbabwe continues to lose millions of revenue in illicit gold mining, In Mazowe, 40 km outside the capital Harare, artisanal miners have broadened their search for gold ore as they continue digging the soil underground in some cases to over 50 metres deep. Some artisanal miners are receiving up to $40 per gram of gold.
According to government statistics, the bulk of the gold is extracted by artisanal and small-scale miners who are responsible for 63% of the recorded production. In most cases, the artisanal miners operate illegally and do not sell the mineral to the state-owned buyer.
Trucker violence on the down, following from the last report, it seems police and other law agencies have managed to clamp down on the truck attacks. Currently there has been no news of any attacks over the past week. Hopefully this will remain.
Kamoa-Kakula stockpile building up, Ivanhoe Mines has announced that underground development at the Kamoa-Kakula copper project, in the Democratic Republic of Congo, produced a combined 250 000 t of ore, grading 4.85% copper, in November.
The tonnage from the Kakula and Kansoko mines is 29% higher than the volumes achieved in the previous month whilst the grade of copper also increased month-on-month from 4.01% to 4.85%.
The project’s surface stockpiles now contain about 1.25-million tonnes of high-grade and medium-grade ore, which has an estimated grade of 3.75% copper and is on track to have around three million tonnes of high and medium grade ore stockpiled prior to the planned start of production in July 2021.
The Kamoa-Kakula’s first phase involves mining and milling 3.8 million tonnes of ore a year, whilst a concentrator that is expected to handle the same amount of volume is currently being built.
US Support counter-terrorism, The United States is not considering sending troops to Mozambique to combat the terrorist threat in the northern province of Cabo Delgado, but are willing to aid civilian counter-terrorism capabilities.
The United States wants to be Mozambique’s security partner of choice in strengthening border security and in strengthening its capacity to counter terrorist activity.
Terrorists in the northern Mozambican province of Cabo Delgado are apparently dying daily as the Mozambican police have managed to cut out their supply system. It is also noted that the defence force managed to block out an insurgent attack on Maputo as well as neighbouring cities.
There is also concern that the terrorists are using a port or aerodrome in Cabo Delgado to move drugs and guns into the country. However the Cabo Delgado coast and offshore islands are under the control of the Mozambican authorities
Earlier this week Islamist militants attacked and occupied a northern Mozambican village in their closest raid yet to a giant gas project. The assault came late Monday night on the village of Mute, some 20 kilometres from the Afungi peninsula which is the centre of a multi-billion-dollar scheme to build a liquefied natural gas plant in Cabo Delgado province.
The attackers targeted government soldiers in the village and torched homes.
The attack has raised concerns about security at the Afungi peninsula, where the French energy major Total and the United States’ Exxon Mobil are among the investors.
Air force reinforcements from Dyck Advisory Group have been deployed from Pemba to bolster up government troops seeking to retake Mute.
“However long the night may last, there will be a morning”
Border Mayhem, despite efforts being made at Beitbridge border post to reduce heavy congestion, things are just not going their way especially since the curfew that was recently placed in Zimbabwe only allows the once 24hour operation to operate on a 12-hour shift. It has been almost two weeks now since the curfew was placed and cargo continues to build up both north and south of the border.
“One of the issues we’re experiencing at the moment is the runners that can’t cross the border,”
“Before the six-to-six night curfew was implemented, runners from Zim would cross the border and collect all the necessary monies for road tolls required to carry on north. These include things like coupons to get through Chirundu.
Unfortunately, because of the curfew, the runners can’t come through anymore and money can only be collected once drivers are on the Zim-side.
Another issue that adds to this is that the Zimbabwe Revenue Authority’s Documents Processing Centre is closed during the curfew.
However, there is some relief as authorities south of the border have been checking trucks in the queue and directing the drivers with incomplete documentation to move their cargo into the various trucking yards thus allowing drivers with correct documentation to proceed to the border.
It is also noted that trucks are being cleared faster on the Zim side as the officials are easing their expectations on how many trucks should be checked for smuggled goods.
Earlier in the week there were reported positive COVID cases and the border had to be closed for fumigation on Monday.
Following on from Beitbridge, a truck part at Zeerust on the Platinum Highway going onto the Trans-Kalahari Corridor in Botswana has been closed, originally it was said that this was due to a positive COVID case but upon further investigation the result of the closure came from municipal protest action being responsible for the issues that had an impact on the border.
Also, earlier this week, Kasumbalesa had closed its gates. This stems from political unrest in the DRC. Information received indicated that there was ongoing resistance to the political leadership of that province.
It is also noted that that solo journeys were discouraged because of the risk of armed assailants. In one case, assailants sporting assault rifles threatened a driver with his life and immobilised his truck by removing its batteries, which were thrown into roadside bushes.
Cape Town Port Gets the Nod, the middle of month deadline to clear the backlog seems to be well on course and the Western Cape Exporters’ Club (WCEC) had released information indicating that delays at the Cape Town Container Terminal (CTCT) are down to a day.
Based on a daily lockdown report issued by Transnet Port Terminals, the club said there were two vessels berthed at the CTCT – the MSC Shannon and the Santa Isabel with six teams of port staffers working the vessels.
It is recorded so far that 11,900 containers had been worked at the port last week although this number could have been higher if it wasn’t for a mechanical breakdown. Currently there is maintenance being done on the cranes.
The port has been battered over the past few weeks by heavy winds and massive swells but the waters are calm and the skies are clear which is great news.
More positive news coming from further north off the coast line, Durban Container Terminal took delivery of another 13 electric straddle carriers over the weekend.
According to a Transnet statement, the DCT Pier 2 now has a fleet of 15 new electric straddle carriers which are due to be commissioned and handed over to operations this month.
“The eighth-generation equipment arrived fully assembled with improved drive technology, starting reliability, maintainability, safety, usability, ergonomics as well as an ability for a computer application to read data from the control system via Ethernet – providing comprehensive detail on statistics, real-time performance data and operational reports,” according to Transnet.
Although there is a lot of positives in the industry so far there is however a dark cloud as the industry braces itself for massive additional charges after Transnet National Ports Authority (TNPA) asked for a whopping 19.74% tariff hike for the 2021/22 financial year.
This comes as the Ports Regulator of South Africa on Tuesday confirmed it had received the annual TNPA tariff application and that it had started a process of public consultation.
In its application for a nearly 20% tariff hike, TNPA stated that the South African economy had been challenged with slow economic growth, underinvestment, and increasing levels of unemployment for some time.
“The recent downgrades of South Africa’s sovereign credit rating to sub-investment grade by rating agencies has added to the woes of government burdened with rising debt levels, collapsing state-owned enterprises, and weak business confidence levels.
The Authority argued that it was viewed as a catalyst for economic growth and therefore more than ever needed to deliver on its mandate. To do so it required the 19.74% tariff hike.
Celebrating a milestone, August 24th calls for celebrations in Namibia as The Port of Walvis Bay will celebrate the opening of their new container terminal which was commissioned last year.
The NCT has recorded throughput of 115 146 s (TEU) in eight months of operation, and anticipates an upward growth trajectory despite the effects of Covid-19.
Another milestone for the port was its record-breaking 46 berth moves per hour on the Maersk Lunz earlier this year.
Gold Price Reaches New High, Gold advanced to a fresh record high on Wednesday – pushing towards the $2,050/oz mark after breaking through $2,000/oz on Tuesday on the back of a weakening dollar, falling US Treasury yields and expectations of more stimulus measures for the pandemic-ravaged global economy.
Bullion is up nearly 35% so far this year and is one of the best-performing assets in 2020. The precious metal is benefiting from heightened uncertainty around the long-term effects of the global health crisis, as more investors turn to safe-haven assets and an alternative store of value in a low-yield environment.
DRC suspends tax exemption, Democratic Republic of Congo is suspending the value-added tax (VAT) exemption on imports by mining companies in an effort to bolster state revenue, the budget minister said.
Jean-Baudouin Mayo told the finance minister to implement the government’s decision to suspend the exemption after cabinet agreed the move last week, according to a letter dated July 31.
Congo, Africa’s top copper producer, had exempted mining companies from paying VAT on imports since 2016 to help them during a commodity price downturn.
According to Louis Watum, president of Congo’s chamber of mines, mining firms had not been consulted before the government agreed to reimpose the tax, a move he said would hit cashflow.
“We want to make the government understand that if they begin to row back entirely on legal agreements, it will not help the business climate in our country,” he said.
Congo’s economy, which has been damaged by the coronavirus crisis that hammered the demand of copper and other forms commodities, is forecast to contract by 2.4% this year.
The International Monetary Fund has approved more than $731 million of disbursements in the past year to help the economy.
Congo’s foreign exchange reserves were just $836 million at the end of July, which is only enough to cover just over three weeks of imports, according to the central bank.
ArcelorMittal SA falls deeper, last week Africa’s steel giants released a statement advising that the company fell deeper into a half-year loss as demand for steel dropped due to COVID and output declined after operations were shut during lockdown.
ArcelorMittal SA said some parts of its business would remain idle until demand recovered which includes placing its melting operations at its Vereeniging works on care and maintenance from the third quarter. The company expects steel demand to be between 70% – 75% pre-lockdown levels for the foreseeable future.
Coming from a demanding 2019, the first half of 2020 proved to be a difficult time with the impact on business due to COVID. The steel producer which has long battled against cheap imports, rising costs and an embattled local economy, said last month it had begun talks to cut unspecified number of jobs as it tries to cut costs.
Job cuts are a sensitive topic in South Africa where unemployment currently stands at a record high of around 30%.
Now with the latest rumours of plate shortages looming due to lack of billets, the projected company losses will most likely take a bigger hit.
“We May Encounter Many Defeats But We Must Not Be Defeated”
ZSE suspends operations, The Zimbabwe Stock Exchange advised that all operations have been suspended until further notice.
“Whilst we await the guidance from our regulators on the operational modalities going forward, we notify our stakeholders that trading has been suspended until further notice.” – statement issued by the Secretary for Information.
Brokers have been scrambling to find reasons to inform investors as to why their money has disappeared.
On a positive note, experts have advised that Zimbabwe can significantly narrow its debt if the country manages its vast natural resources in a sustainable manner although the COVID-19 pandemic has worsened Zimbabwe’s debt deficit.
Studies have shown that Zimbabwe holds 13million tonnes of Gold, 2.8 Billion tonnes of Platinum and 16.5million carats of Diamonds just to name a few precious resources.
Dr Moyo said, “with this natural wealth, the country could harness it for development without overly relying on erratic external flows”.
Kopfontein delays continue, Freight flow at the Skilpadshek border is still taking a knock from COVID related issues, the border which is a vital access point connecting South Africa to Botswana and Namibia is facing continued delays as the Botswana health authorities continue with their inflexible coronavirus testing measures for all truck drivers entering the country which requires the drivers to wait up to 72hours for their results.
Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta) said that it doesn’t look like the situation is going to change anytime soon.
“Restrictive testing is a real problem at the border, using Kopfontein for alternative access into Botswana because it’s not as busy as Skilpadshek is also still inconvenient because a lot of trucks have to head back south towards the TAC once they have passed through the border.” Fitzmaurice said.
Further South, ATDF (The All Truck Driver’s Foundation) has denied that its organisation disrupted transport on South African roads and intimidated truck drivers, footage has emerged of two cars sporting ATDF banners, parked on the yellow chevron section of the Key Ridge compulsory truck stop between Marianhill Toll Plaza and Pietermaritzburg.
Sifiso Nyathi the national secretary of ATDF said they were just asking for donations from drivers to boost the struggling organisation’s coffers.
The Federation of East and Southern African Transport Associations (Fesarta) said: “There is a car with an ATDF banner stopping and checking trucks looking for foreign drivers, please be alert”
Nyathi rubbished these reports by saying “We weren’t stopping the truck. There is no stop street on the highway. We were only asking for money.”
It’s not the first time that the ATDF has been accused of intimidating truck drivers, especially on the N3 where scenes of violent arson attacks over the past few years, apparently in opposition to foreign nationals working in South Africa’s road transport sector, have sparked wide-scale xenophobic unrest, claiming lives, destroying property and making headlines the world over.
Assistance for Cape Town Port, twenty specialised employees from Durban Container Terminal have volunteered to assist with delays at Cape Town Port, the teams consists of driver articulated vehicles, rubber tyre gantry cranes and ship-to-shore crane drivers boasting over 100 years of collective work experience.
“Both the container and multi-purpose terminals at the Port of Cape Town have been operating at reduced capacity since the introduction of the lockdown regulations.
“However, with the easing of the lockdown, port activities have increased. The container terminal is currently operating at 60% and the multi-purpose terminal at 75% capacity.
“The portside, which is responsible for marine operations, is only operating at 60% human resource capacity, but is able to offer full marine services. Transnet added.
The team will assist in improving cargo movement and extra staff availability.
Acting chief operations officer at Transnet Port Terminals, Velile Dube, said: “Despite all the challenges, we have been able to reduce the number of vessels waiting at anchorage from 11 to five vessels today.
“We have managed to increase the number of gangs from four to five and are now receiving additional staff to help with shifts.”
Cape Town Port seems to be the only port battling with cargo movement, as the City continues to feel the effects of COVID mainly due to it being the epicentre of South Africa’s outbreak.
Settling the debt, one of Zambia’s major copper mines has committed to pay K8 million out of the K58 million it owes the Kitwe City Council.
On Wednesday afternoon, bailiffs paid the Mine a visit in trying to recover debt owed to the local authority, Copperbelt security rushed to the mine in a-bid to intercept the bailiffs but later all 3 parties entered a closed-door meeting.
Journalists were later addressed and were advised that an agreement had been reached on how the debt will be settled.
“The status is that the amount is K58 million. We have negotiated to pay in instalments and today (Wednesday), the mine will pay K8 million and the rest will be paid in instalments. That is the position,” Nundwe said.
“We must be willing to let go of the life we planned so as to have the life that is waiting for us”
Chaos ensues at the Beitbridge border post as the closure of Botswana’s border post mounts huge pressure on the ZIMRA clearing system which is also understaffed for such volumes.
Developing reports are showing that there is a double lane queue that is roughly 12 Kilometres long, drivers are crossing over to Zimbabwe without having received their Zim Notification and are being fined which itself is adding pressure to the whole ordeal.
Truck drivers headed towards Botswana face stringent COVID-19 measures, the usual three days allowed to enter the country has been slashed down to just one day.
According to Freight News, “the Presidential Task Team on Covid-19 has directed that, with immediate effect, all truck drivers entering Botswana will now be required to produce evidence of negative Covid-19 results that are not more than 72 hours old, if your test results come in after 48 hours you then have one day to transit into Botswana.”
“So, if you’re stuck in a queue with all the drivers waiting for their results, your valid test will no longer be considered in Botswana and you would need to be tested again.” Said one transporter.
Nakonde re-opened, President of Zambia, Edgar Lungu announced on Friday that the Nakonde border be re-opened to the movement of cargo only, President Edgar Lungu shut the border on Sunday after the town of Nakonde recorded 76 cases of COVID-19.
“Trucks from both sides have been moving, starting with those destined for Tanzania,” Malozo Sichone, the minister of Zambia’s Muchinga province, said.
Health Minister Chitalu Chilufya advised that the lockdown imposed on Nakonde town was lifted on Friday, however restrictions on movement would be in force from Saturday to allow for mass screening, the general public are still barred from crossing the border.
More woes for SA Miners, Mining Giants Harmony Gold have had to slow down production at their Kalgold Mine whilst mining has come to a standstill as two sub-contractors tested positive for COVID-19, this comes just days after positive results yielded at Marula Joint Venture, a platinum mine, and at Dwarsrivier, a chrome mine, which are both situated in the country’s Limpopo province.
CEO of Harmony, Peter Steenkamp said “Every effort is made at our mines to mitigate the impact of the COVID-19 virus,”
“Harmony will continue its routine screening and testing at the mine in line with its COVID-19 Standard Operating Procedure,” the company said.
Implats (Impala Platinum) has also temporarily suspended production after announcing that 19 employees had tested positive at their Marula plant on the weekend.
National Union of Mineworkers (NUM) has called on the Limpopo provincial government to shut mines in the province.
Namibian Ports Open, Namibia has vowed to keep its ports open to allow the movement of goods to its landlocked neighbours, this was announced after President Hage Geingob met with leaders from South Africa, Zimbabwe, Angola, Lesotho, Eswatini and Mozambique.
“Covid-19 is a global pandemic and requires coordinated regional, pan-African and global action, during this difficult period, Namibia recognises how interdependent and how interconnected we are as neighbours,” Geingob said.
“Don’t wait for your ship to come in, swim out to it.”