Trade Winds bimonthly update volume 24
Steel shortages continue! South Africa’s steel woes continue with a bleak output on the horizon, capacity is at an all-time low with manufacturers and stockists battling to deliver and the continuous steel increases further damaging the sector.
The Steel Giants have put out notice of restructuring at its Newcastle facility expected to result in significant job losses of around 2,500 workers.
On a positive note, furnaces at Mittal’s two plants in South Africa are on schedule to be fired up early 2021.
Joining the band wagon, South Africa is imposing export taxes to either collect more revenue or modify the flow of goods across borders.
The Customs and Excise Duty Act has been amended to allow the minister of finance to impose an export duty whenever he sees it beneficial in the public interest. The amendment is expected to be effective March next year.
South Africa will also be introducing an export tax on scrap metal. There’s been talk about a 30% export tax on chrome and further export duties on iron ore as well as leather and maize. No implementation dates have been announced.
The export tax on Chrome has come as a shock and many of the domestic producers have frowned upon this and fear that this will backfire on the country.
Border updates, Beitbridge border post is now business as usual, little to no delays are being experienced currently.
Congestion at the crucial Chirundu Border Post between Zimbabwe and Zambia has been cleared following the bottlenecking of trucks on the northbound journey into the Copperbelt. The intermittent spike in volumes crossing the Zambezi at Chirundu was due to increased cargo coming through from the Port of Beira in Mozambique.
It was noted that the commodity coming from Mozambique was fuel. This was a result of the Zambian government deciding to issue a statutory instrument which ordered that 50% of freight in Zambia be reserved for local transporters, the country had found itself running short of essential cargo like fuel.
The Zambian government then set aside a three-week period that would allow other transporters to deliver fuel as the Petroleum Transporters Association of Zambia couldn’t keep up with volume requirements which in turn triggered a spike in cargo from the landlocked nation’s closest neighbouring port, Beira.
As cross-border road hauliers wait to hear from Zambia’s and Botswana’s transport authorities about when the completed Kazaungula bridge across the Zambezi will open, another truck has slipped off the pontoon into the mighty river’s depths.
It’s the second rig that has rolled off a ferry at the important crossing which is still served by three pontoons while the bridge, already finished in September, sits unused in the background.
It remains anyone’s guess as to why there’s such a holdup to open the bridge.
Trucker violence surges! on the night of 20th November 2020, 10 trucks were attacked and torched on the N3 in South Africa, this attack marks the single biggest attack on the country’s main supply route between Gauteng and the Port of Durban. Just a few days later another truck was attacked and earlier this week a truck driver was shot and burnt to death in his cabin, throughout the week there has been various attacks on trucks with the latest one coming just last night where a driver was shot at from both sides of his vehicle but luckily managed to flea just in time before his truck was torched.
The attacks are allegedly backed by the All Truck Driver Foundation (ATDF), a vigilante group opposed to foreign national truck drivers working in South Africa’s transport sector. ATDF has said that the attacks on transporters stem from employers in the sector allegedly favouring foreign nationals because they are paid less and are exploitable because many don’t hold valid work permits.
Earlier in the year ATDF threatened to embark on a strike that would cut off the Durban to Beitbridge corridor, however there was a court interdict and the protest never took place.
The Cross-Border Road Transport Agency (CBRTA) has added its voice to pleas that transporters consider not working at night, thereby hopefully diminishing the life-threatening situation in which truck drivers find themselves as the violence targeting South Africa’s freight industry drags into its sixth day.
Ducking and diving, Deputy Gauteng Police Commissioner, Major General Daniel Mthombeni, circumvented the issue as industry stakeholders demanded concrete action to address the growing insurrection in the road freight industry.
He told attendees at a meeting held in Alberton yesterday that arrests had been made earlier this week and called for the establishment of a forum. Members of the industry however made it clear that a few arrests were not enough.
Transport and security companies said that they were aware of the ‘hot spots’ and asked why police visibility in these high-risk areas was still so poor and why there weren’t any functioning cameras on major highways.
A security company representative said on many occasions he would call the police to ask if certain routes were safe but even the police were unsure most of time.
Great Dyke making progress, Great Dyke Investments who has been pinned as Zimbabwe’s next platinum giant is ahead of schedule in boosting Zimbabwe’s platinum exports by 2022. According to the mine’s chief operations officer, Mr. Munashe Shava, extraction which commenced earlier this year will tally with the company’s projections of exports by 2022.
The Great Dyke Investments mine in Darwendale which follows Zimplats and Unki mines and is one of the new investments is expected to help the country reach a US$12 billion mining industry by 2023.
GDI is 50 percent owned by Russia’s Vi Holding, and 50 percent owned by Zimbabwe’s Landela Mining Venture. The project has an excess of 180 million tonnes of ore containing 17 million ounces of platinum group metals and gold, with an average grade of 2,93 grammes per tonne.
The mine expects to start contributing to the country’s gross domestic product by 2022 although it has already contributed to the country’s fight against the Covid-19 where it supplied local health institutions with machinery and PPE.
DRC to formalise Artisanal Mining? EGC and Trafigura signed an offtake agreement in a bid to formalise artisanal and small-scale cobalt mining in the Democratic Republic of Congo.
The trading agreement includes the provision of finance by Trafigura to fund the creation of strict, controlled artisanal mining zones, installation of ore purchasing stations as well as the costs related to the transparent and traceable delivery of cobalt hydroxide to Trafigura on an export cleared basis.
Under the supply terms, EGC will ensure that the ore marketed by Trafigura complies with OECD Due Diligence Guidance.
Earlier in the year Glencore made a U-Turn and also decided to back artisanal mining of cobalt. The group aims to end child labour in the cobalt mining sector and to improve the working conditions in Congo.
Almost three quarters of the world’s cobalt comes from Congo where Glencore owns two of the largest mines. Demand in cobalt is expected to surge in the coming years as the sales of electric-vehicles are said to take off.
Zambia’s copper output increases, Zambia who is Africa’s second-largest copper miner, produced 646,111 tonnes of the metal in the first nine months of 2020, up from 590,321 tonnes in the same period last year.
The Southern African nation now expects total production for the year to reach 820,000 tonnes, driven by rising copper prices.Bottom of Form
This comes as good news to Zambia, who is the first African country to default on a bond payment during the covid-19 pandemic by missing a $42.5 million interest payment on part of its international debt.
Zambia’s mining sector has been in the spotlight as the country’s financial situation deteriorated this year which prompted Glencore to shut its Mopani Copper Mines operation.
With that being said, the Zambian government has advised that negotiations with Glencore regarding increasing the government’s stake in Mopani were nearing a conclusion. No information has been given out about the size of the stake that state-owned ZCCM Investments Holdings is trying to acquire was given.
Tanzania to join in fighting terrorism! Tanzania’s government says is teaming up with Mozambique to launch a joint operation against violent attacks by Islamist militants along their shared border.
Several recent attacks blamed on Islamist extremists have targeted the border village of Ktaya in Tanzania’s Mtwara region.
Police say more than 175 houses were set on fire and some people were killed by assailants, who, authorities say, fled into neighbouring Mozambique.
Tanzania has already increased security along the border and it is now joining forces with Mozambique to contain what it calls terrorists.
Some opposition parties and rights groups are raising concerns about how the Tanzanian government plans to tackle the threat.
Tanzania becomes the 4th country that has pledged their allegiance in fighting the terrorist scourge, Britain, Zimbabwe and South Africa have voiced their aid however we are not seeing any troops headed to Mozambique.
Some Zimbabwean citizens are concerned about soldiers going into Mozambique, fearing that, that would encourage terrorists to infiltrate their country.
“For tomorrow belongs to the people who prepare for it today”