Hello and welcome to our 50th edition of Trade Winds, before we continue, we would just like to thank each and everyone one of our valued customers for being a part of this journey so far and for your continued support throughout the year.
Are steel price increases a thing of the past? Steel prices surged during the post covid-19 recovery as supply struggled to keep up with demand. Prices for some products and markets hit all time highs in 2021 and detached from costs. However, the steel price cycle peak may be behind us.
Long products and rod saw huge increases in 2021, levels that were not even seen during the Global financial crisis back in 2008. Flat products had the biggest increases, making the increase on long products seem okay in comparison.
The surge in high prices experienced in 2021 are seen as a once in a decade phenomenon and this trend is not expected to be seen again within the foreseeable future, however with the global carbon steel prices seeming to be tapering down, South Africa is yet to follow suite.
There remain caution however in some circles since inflation in developed countries continues to rise which will further negatively impact global pricing particularly with regards to labour and logistics. This is already evident in imports from the U.S.A.
Border updates, there were some reports of delays at Beitbridge last week however the border is flowing once again with no issues. No other issues have been reported amongst the other border posts. The only issue is the time of year and increased cargo movement resulting in longer waiting times for trucks.
It is really important to plan ahead!
N3 Truck driver protesters arrested, A week ago, truck drivers blocked off Van Reenen’s Pass, a busy North-South corridor between Durban port and Southern Africa. The protest started in the early hours of Friday morning and lasted till the evening, causing huge delays.
Twelve truck drivers were expected to appear in the Ladysmith Magistrate’s Court after they were arrested last week Friday for using their rigs to obstruct traffic.
The blockade was in protest of the presence of foreign national drivers working in South Africa’s Road freight sector.
Wide condemnation has since been expressed over the impact of Friday’s blockade, with Durban Chamber of Commerce CEO Phalesa Phili saying losses of about R800 million a day are lost when the country’s most important supply artery is affected in this manner.
Economists have expressed how this protest was bad for South Africa’s image as a key partner for intra-African trade, especially in light of the African Continental Free Trade Area.
New covid variant poses threat to eased freight rates, The impact of vaccination rates will play a significant role in projected global economic growth in 2022, with predictions that it will slow to 4.3% from 5.7% this year on the back of a downward trend in the post-pandemic rebound.
Freight shipping rates have already pulled back somewhat from their September high, but that said, the new Omicron variant poses a risk in this regard. If it leads to widespread border closures and tougher domestic restrictions, this could spur renewed demand for goods over services.
Stricter lockdowns could also see a repeat of port disruptions, with the attendant impact on cargo flows that has been evident throughout the pandemic.
Ocean freight reliability on the rise, with schedule reliability edging up slightly but still well below acceptable norms, some analysts have said that shippers’ price is sometimes secondary to the predictability of getting product to market.
It is also noted that the new strain has caused a stir with some countries now advising that any vessels arriving at their respective ports are to anticipate a quarantine window period, thus causing further impact on vessel schedules globally.
Further on, South African ports are currently experiencing delays which has been caused by severe weather, terminal congestion and berthing delays ranges from 3-5 days, with a further delay of 5 days expected in Cape Town and an additional 2-day delay in Durban.
Major impact remains on import delivery, clients are now faced with huge demurrage charges as transport booking slots are still impacted by the terminal congestions.
Africa, the leaders in air cargo growth, there is some bad news with airfreight due to cancelled PAX flights, the capacity remains constrained in and out of South Africa as countries tighten travel rules over the Omicron variant, belly cargo capacity may fall again in the coming weeks.
Iron ore price rockets, Iron ore price surged on Tuesday after customs data showed China’s iron ore imports rose 14.6% in November from a month earlier to hit their highest since July 2020.
The world’s biggest consumer of iron ore brought in 104.96 million tonnes last month, up from October’s imports of 91.61 million and were also up 6.9% from November 2020.
Bureau Veritas slowly recovering from Cyberattack, The French classification company’s internet services remain deactivated after it detected an attempted cyber-security breach two weeks back, forcing BV to take its data and servers offline.
As of last week, more than 80% of operations were running at a normal level and some regions still have IT systems running at a reduced rate.
The company expects to recover most delayed activities in a short period of time and are evaluating any potential impact.
Currently the company is issuing inspections and certificates manually via email, there is a backlog as BV has lost three weeks of work however slowly services are returning.
The festive season is upon us!
We would like to thank our valued customers for all your support throughout this challenging year. We hope we have served you well and whatever 2022 brings, we will continue to strive for service excellence, reliability and competitively priced product for mutual success and stronger partnerships.
We wish you and your families a happy and safe festive period!
“You are the artist of your own life, don’t hand the paintbrush to anyone else”
Please note that Trade Winds will be taking a break until later in January.
NUMSA strike over, industry feeing effects, the national steel strike in South Africa, which started on the 5th of October came to an end last week Friday.
NUMSA and SEIFSA came to an agreement of 6% as opposed to the 8% NUMSA was fighting for.
Whilst the strike is over the industry is feeling the effects as backlogs are clearing up, lead times are being pushed out as manufacturers and merchants a like cannot keep up with current demand.
There are also steel price increases on the horizon with one major mill already announcing a R1,200.00/Ton price increase across the board and the possibility of ArcelorMittal increasing their prices is almost a given.
Loadshedding, another blow to the sector has shown its face this past week and it seems its here to stay. South Africa has fallen over a load shedding tipping point as and it’s noted that Eskom is the worst it’s ever been and is getting worse.
Stage 2 loadshedding was announced out of the blue last weekend for this week, however as of noon on Wednesday, stage 4 has kicked in. Businesses that have just managed to get over the pandemic’s destruction, followed by NUMSA’s interference now face the challenges of loadshedding once again.
The price of petrol is also skyrocketing next month with the country expected to pay R20/Litre by December. These are all devastating blows to the industry and downstream players.
ArcelorMittal, Africa’s biggest steel mill has just sent out notice of strike action starting next week 3 November 2021, with the knock-on effects from this strike possibly being catastrophic, we will update our clients as and when we receive any information.
Border updates, relief at Beitbridge as for the first time in more than two months, truckers stuck at the continent’s worst crossing can speed up in the queue as efforts to decongest the crossing take effect.
Serious interventions have taken place to address the cause of the bottleneck, transporters sending drivers to the border without paperwork that’s in order, to name just one of the reasons.
The following procedures have also been enforced:
Zimra will deploy officers at the south gate and on the N1 outside Gateway Truckpark to check if trucks are fully precleared on the Zimbabwean side.
If not fully cleared they will not be allowed to proceed to port, and will be directed to truck parks on a first in-first first-out principle, once they are clearing-compliant.
If a truck is fully precleared, it will be given identifying marks to proceed to port and be directed to a fast lane.
Penalties will also be handed out to truckers who stay longer than necessary when they arrive on the Zimbabwean side, drivers will need to finalise border processes immediately and not stay over and the same applies to those who arrive in Zimbabwe without the necessary preclearance compliance.
Furthermore, Zimra has continuously pleaded with clearing agents and runners to be available throughout the night, and appealed for improved communication between all concerned, transporters, drivers, and the aforementioned border staff.
This news is welcomed as the interventions appear to address all the issues previously mentioned as causes for congestion at Beitbridge.
As for the argument by some long-distance hauliers that the cost of using Zimborders’ facilities costing $201 for a conventional truck has resulted in resistance to the cross-border route via Beitbridge.
A trip via Groblersbrug through Botswana will cost as there is currently a 12-kilometre queue there which could cost up to R5000 a day that could end up costing around R25 000 extra for the entire trip, or one could pay R5000 at Beitbridge and cross the border in half an hour.
Since the implementation of the new procedures, drivers are claiming that the processing rate at Beitbridge is so quick that the turnaround time is no longer than half an hour to get through.
Truck drivers’ strike on the cards, the N3 highway had been blocked off earlier this week near Harrismith as part of a national protest by truck drivers.
Around 30 truck drivers had parked their trucks on the N3, closing the road totally. They are demanding to see transport Minister Fikile Mbalula, their main grievance is foreign truck drivers being allowed to drive trucks in the country.
According to All Truck Drivers Foundation (ADTF) secretary-general Sifiso Nyathi, the nationwide shutdown by local truck drivers is aimed at forcing freight companies to stop employing foreign nationals.
He said ATDF was not behind the protect action, which the truck drivers themselves allegedly organised, but added that the organisation did support the mass action.
In June 2020, ATDF threatened a national strike to protest claims that foreign nationals were being employed by the industry instead of local drivers. At the time, the Gauteng High Court in Pretoria granted an interdict against the planned strike.
There have been reports of violence in certain areas as trucks are being torched and drivers badly beaten with one report claiming a driver had lost his life.
Carriers schedule reliability remains bleak, it may not have plummeted further, but 34% schedule reliability is hardly a cause for celebration.
According to the latest Global Liner Performance report published by maritime consultancy Sea-Intelligence, there was a 0.6 percentage point improvement to 34.0% in September, maintaining the range of 34%-40% seen throughout the year.
On a year-on-year basis, reliability is down 22.0 percentage points, where the average delay for late vessel arrivals also improved marginally, dropping to 7.27 days.
Copper prices expected to decline into next year, copper prices are due to extend their decline next year from record levels this year as mine supply ramps up and economic growth tapers in China.
The precious metal soared to a record peak of $10,747.50/tonne in May, but has since then retreated around 10%, weighed down by weak Chinese factory output, debt problems in the property market and an energy crunch.
Analysts have revised their forecast for the copper market balance next year to a surplus of 82,000 tonnes from a deficit of 100,000 tonnes.
Zimbabwean miners losing out thanks to exchange rate, Zimbabwe’s miners are losing 20% of their export proceeds due to a widening gap between the official and black-market currency exchange rate.
The Zimbabwe dollar is trading at 93 to the dollar on the official market, but is quoted as low as 180 against the greenback on a thriving black market.
A survey commissioned by Zimbabwe’s mining chamber found that the mining companies were losing money due to the exchange rate mismatch. Exporters from Zimbabwe are required to surrender 40% of their foreign currency earnings to the central bank, in exchange for local currency at the official rate.
The mining companies said they were also battling electricity shortages, low levels of investment and the high cost of capital, but despite the challenges, the survey found that miners were more confident about their prospects for 2022 compared to this year.
Zimbabwe recorded earnings of $3.65-billion from mineral exports last year, with platinum group metals and gold accounting for 82% of the earnings.
Central bank governor John Mangudya has promised to let miners retain 80% of their export earnings if they increased production although he did not specify what increase he would like to see.
KCM liquidator denies all charges, state-appointed provisional liquidator of Zambia’s Konkola Copper Mines this past Tuesday appeared in court and denied charges of money laundering and the theft of 4.4-million Zambian kwacha.
Zambia’s Drug Enforcement Commission, which also handles money-laundering cases, last month arrested liquidator Milingo Lungu and charged him with money laundering and the theft of more than $2 million between May 2019 and September this year.
“I deny the charge,” Lungu told magistrate Felix Kaoma when the charges were read to him. The case was adjourned to November 29 for the trial to start. Lungu’s police bond was extended.
Local elections, the time has come again for South Africans to go to the polls, this time for local elections where new mayoral candidates have the opportunity to be elected, please note our offices will be closed on 1 November 2021.
Table Mountain, Africa’s leading attraction!
Cape Town’s iconic Table Mountain in South Africa has been voted as Africa’s leading tourist attraction by the 2021 World Travel Awards, a spot that it has held since 2019.
October is a special month for Table Mountain and the Mother City as the Table Mountain Cableway, which first opened on October 4, 1929, celebrates its 92nd birthday and has been nominated as the World’s leading Cable Car.
Table Mountain’s reign at the summit comes on the back of multiple awards for Cape Town in 2021. The city has also been named Africa’s leading city destination as well as its airport being voted as number one on the continent.
Table Mountain beat out some strong competitors to retain its pole position in 2021 including Mountain Kilimanjaro in Tanzania, the Ngorongoro Crater in Tanzania, and the Pyramids of Giza in Egypt.
“Success is not final, failure is not fatal, it is the courage to continue that counts”
NUMSA strike, devastating blow to the industry! The national steel strike in South Africa, which has been ongoing now since the 5th of October is showing its true ugly face as the steel sector and downstream industries are the feeling the blow.
Since last week Tuesday, majority of companies within the sector are unable to produce or deliver material which in turn is having a hard knock-on effect to downstream players and other industries involved.
Since the start of the strike up until earlier this week Tuesday, BMW has advised that they have lost production on 700 cars, in one week, that is a tremendous loss, loss in wages has accumulated over 100million rand at this stage and continues to climb as there is a no work no pay clause due to the covid-19 pandemic.
Companies are being forced to shut their doors due to intimidation and violence from striking workers, there have been reports on companies being burnt and innocent people being badly beaten.
The strike is likely to lead to job cuts, further hammering an industry that’s been in decline for several years which in turn threatens to derail the potential recovery of South Africa’s economy from the coronavirus pandemic, which triggered the biggest annual contraction since 1994, and worsen an employment crisis. The joblessness rate rose to a record 34.4% in the second quarter.
On Tuesday, NUMSA rejected another wage offer as it stands firm on the 8% demand, however there is speculation that they may give in sooner rather than later.
Border updates, chaos ensues at Beitbridge border post as the 10km queue remains in place. The backlog at the border has been present over the last two weeks with no real light at the end of the tunnel.
Border officials are suspected of allowing as many trucks as possible into the Zimbabwean border control zone at Beitbridge, upsetting the go-live chances of concession company Zimborders unblocking bottlenecking on its first day of operating new facilities at the congested crossing earlier this week.
Trucks had been allowed to park in each and every conceivable space north of the Limpopo, numbers of trucks entered the border post the night before go-live, officials had even pushed trucks into the old parking area which sent the border into absolute chaos the following morning before Zimborders started charging processing tariffs from 8am this past Monday morning.
Adding to the mess that Zimborders will have to untangle is the temporary expectation that drivers will have to pay border tariffs in cash until electronic payment facilities are switched on later this month.
The tariffs are as follows:
24-ton Triaxle – $175
34-ton Link – $175
Abnormal Loads – $300
The above charges all exclude VAT, VAT should be reclaimed, provided the transporter is registered in Zim.
For the time being, foreign-registered operators cannot reclaim their VAT, although this had been taken up with the relevant authorities.
As it stands as of today, there is currently a 20km queue south of the border.
Things aren’t much better east as the Groblersbrug/Kazangula passage is facing challenges itself, transporters are shaking their heads in disbelief and frustration over what’s happening on the cross-border road freight line from South Africa through Botswana into Zambia.
The newly built Kazangula bridge is finding itself troubled with a lesser bridge across the Limpopo River further south where truck traffic is building up much faster than expected at the Martins Drift-Groblersburg crossing, which has become frustrating of late for long-distance hauliers serving the Copperbelt region.
Transporters cannot expect any relief by opting for this route rather than the conventional north-south way through the already overburdened Beitbridge Border Post which is a 200 kilometre shorter trip, but unfortunately, the single-lane Limpopo bridge, coupled with stringent covid-testing requirements, is choking traffic flow towards Kazungula.
Sometimes drivers waiting in the queue to cross into Botswana are already Covid-cleared, but because PCR results are only valid for three days and often, drivers have to be retested by the time they finally cross the Limpopo.
At least the queue in South Africa had shrunk to three kilometres earlier this week.
Airfreight expecting growth in revenue, The International Air Transport Association has noted that they predict a healthy future for airfreight, expecting that demand will exceed pre-covid levels by 8% while revenues are expected to rise to a record $175 billion and in 2022 demand is expected to exceed pre-pandemic levels by 13%, with revenues expected to rise to $169bn.
The is all thanks to favourable indicators such as inventory levels and manufacturing output. World trade is anticipated to grow at 9.5% this year and 5.6% in 2022, e-commerce continues to climb at a double-digit rate, and demand for high-value specialised cargo such as healthcare goods and vaccines are on the rise.
Although this is good news, it does not come without complications as pandemic restrictions have led to severe global supply-chain congestion and created hardships for aircrew crossing international borders. Resourcing and capacity, handling and facility space and logistics will be an issue.
August port volumes the lowest in three years, Transnet’s ransomware attack in August had a greater impact on volumes than the July protests which closed the port of Durban for several days.
According to Transnet statistics, it was the slowest August in three years, with 2020 volumes surpassing it.
In August 2021 a total of 330 109 TEUs was handled, compared to 354 015 in 2020, and 447 072 the year before that and 652 vessels were worked in August 2021, compared to 801 in August 2020 and 835 in August 2019.
In addition to a stuttering economy, riots and now elections, shipping volumes in South Africa are also being affected by global supply chain disruptions. At the end of August, over 40 container ships were waiting to berth outside the ports of Los Angeles and Long Beach alone, with 90% of those arriving at a port having to wait at anchorage before a berth became available.
Shipping lines are focusing on high-revenue routes at the expense of Africa, with capacity in Africa having fallen by 6.5% year-on-year.
Some traffic is also being lost to ports in neighbouring countries as news from Dar es Salaam is that volumes are up following investment in port infrastructure, systems and people and a number of lines have introduced new services.
Namport has reported a 15% growth in container volumes year-on-year.
Supply chain disruptions should be expected for the next two years at least. The global supply chain was in crisis at the beginning of the pandemic, and it is expected that there may be an easing in 2023.
Earlier this week, Moody Analytics warned that the disruptions will get worse before they get better, citing delays at key US ports, as well as the national labour shortage.
The agency went on to say that there are “dark clouds ahead” for the global supply chain as there is no clear solution to work out issues between subsections of the supply chain around the world, the alarming shortage of truck drivers in particular has been identified as the weakest link in the supply chain causing equipment shortages as shipping yards are left swamped with excess containers.
The supply-chain crisis has caused major shortages of everything from foods to electronics, cars, furniture, and general household goods. Automakers have slashed production goals on more than one occasion, whilst major clothing companies like Nike have warned that products will be harder to find over the holiday season due to the bottlenecks.
Analysts at RBC Capital Markets have agreed with Moody’s concerns. Earlier this month, the bank analysed the 22 most influential ports around the world and gauged how long it takes for cargo ships to enter and unload.
They found that 77% of ports have experienced above-average wait times this year. Of the 22 ports, ports in Los Angeles and Long Beach had the most inefficient wait times of any other top port in the world with turnaround times for a container nearly doubling in 2021 as compared to averages seen pre-pandemic.
Turnaround times increased from just over 3 days to around 6 days which is almost five days longer than several ports in Asia which operate 24/7. The white house has announced that the the Southern California ports would move toward 24/7 operations in a move to reduce waiting times.
Copper price climbs again, The global energy crisis that has led to power shortages and factory shutdowns did not stop copper prices from climbing to their highest levels since the beginning of August.
On Wednesday this week, copper futures for December delivery erased earlier losses to trade at $4.499/lb for a gain of 4.0%.
The rebound in copper prices comes amid short-term concerns surrounding China and its debt riddled property sector, plus the ongoing economic threat posed by the covid-19 delta variant.
However, Citigroup has warned that prices could fall another 10%, with demand shrinking over the next three months.
Possible mining tax changes coming to Zambia, President Hakainde Hichilema earlier this week mentioned changes to Zambia’s mining taxation policies must not be frowned upon.
Zambian mining companies have long complained about what they call “double taxation” because since 2019 mineral royalty payments are not treated as a deductible expense when calculating corporate income tax.
Although President Hichilema did not provide details on the potential tax changes, he did express his concern that policies and laws for mining should be “appropriate and attractive”.
Finance Minister Situmbeko Musokotwane will present Zambia’s new budget on October 29 where further details will be released.
Zimbabwe temporarily lifts ban on coal exports, Zimbabwe has allowed the export of 200,000 tonnes of excess power coal because of limited intake at its biggest coal-fired power plant, which is affected by frequent breakdowns.
Zimbabwe’s six major coal miners have a standing arrangement to supply 300,000 tonnes of coal to Hwange Power Station on a monthly basis but constant breakdowns of ageing equipment has resulted in the plant taking in less coal.
The coal will be exported to other countries in Southern Africa but producers could look beyond the region if port facilities are available.
The Hwange plant has a design capacity of 920 megawatts but is currently producing 410 MW. The power station is being expanded by China’s Sino Hydro to add another 600 MW capacity.
Moz president urges terrorists to surrender, President Filipe Nyusi last week, urged the ISIS-linked terrorists operating in parts of the northern province of Cabo Delgado to turn themselves over to the authorities.
Speaking to reporters in Maputo, immediately after laying a wreath at the Monument to the Mozambican Heroes, to mark the 29th anniversary of the 1992 peace agreement between the government and the Renamo rebels, President Nyusi stressed that the terrorists “have nowhere to go”.
The terrorists are being relentlessly pursued by the Mozambican and Rwandan security forces and their allies and have been driven out of their main bases.
There is hope that Mozambique’s giant liquefied natural gas project run by Total Energies in the north of the country will be revived.
Reopening of the LNG project will be a major boost for the logistics sector in Mozambique, which has invested heavily in preparing for the much-delayed start of construction, work came to a standstill in April 2020 when Total Energies withdrew all its staff after Islamist insurgents attacked the northern town of Palma.
Production was due to start in 2024. At the time of its withdrawal, Total said it would be at least a year before it returned, and that it was looking at guarantees for the safety of its personnel and infrastructure.
The Jacaranda’s are now in full bloom transforming many of our streets and parks into places of magnificent beauty with brilliant blues and purples heralding the change of Season.
Upcoming Public Holidays:
18th October 2021 – Zambian National Day of Prayer (ZAM)
25th October 2021 – Zambian Independence Day (ZAM)
“If you don’t like something change it; if you can’t change it, change the way you think about it”
NUMSA strike to start next week! Confirmation is out that the anticipated, dreaded steel strike action will commence next week Tuesday, confirmation has come from NUMSA themselves that they will embark on industrial action at 5am on the day.
Over 430,000 workers across 9,000 steel and engineering companies will down tools.
NUMSA initially demanded a 15% increase across the board, however in August, it revised the wage demand down to 8% after declaring a dispute at the Metal and Engineering Industries Bargaining Council.
NUMSA says the strike can only be avoided if employers meet workers’ demands.
We will keep our customers up to date with the latest developments as and when received.
Please note that we will be working tirelessly around the clock to ensure that all orders can be dispatched prior to the strike and we will evaluate the situation on a day-by-day basis.
Border updates, over a month, 44 days to be precise, that’s how long the current phase of bottlenecking in the northbound lane south of Beitbridge has lasted.
On the bright side, the queue of trucks waiting to cross into Zimbabwe is around 6kms currently which could also be seen as a norm, drivers on average having to wait roughly four days to get through the border.
Word is out that there is a new charge system being implemented next month that will see transporters fork out additional costs that have been put in place by the Zimbabwean minister of transport, as it stands heavy vehicles will be paying an additional $100, goods vehicles $175 and abnormal load operators will have to pay out $300 a load.
With just a few days remaining before the revamped facilities at Beitbridge come online on the Zimbabwean side of the notoriously congested crossing, transporters are eager for relief from long delays in the northbound queue south of the border. Some of the upgrades to note is a new weighbridge, refurbished scanners a warehouse and newly built roads and a parking area.
The teething issues at the Kazungula Border Post, which a month ago still meant trucks took 30 hours on average to pass through a single-window system, have been sorted out that there is no processing queue at the moment.
It is noted that transporters who are currently using that route can do Johannesburg to Lusaka and offload in three days.
US ports battling record volumes, a behemoth of carrier queues, building up at anchorage off the United States west coast, has over 60 box ships waiting to berth at the ports of Long Beach and Los Angeles.
65 container vessels were waiting for slots as the US economy gathers momentum and importers rally to meet demand by building up their inventories., The two ports, which are said to handle about 40% of America’s inbound goods, used to record maybe one ship waiting to offload in pre-Covid times.
With containers at sea, US retailers and suppliers are running short of everything, from toys to timber, clothes and construction materials, most of which are coming in from China.
Container rates and availability having negative impact, the worldwide container crunch is continuing to weigh heavily on the bottom line of shippers as the unavailability of boxes and related costs mount up while freight forwarders increasingly find themselves unable to cope with rising costs and crippling delays.
The backlog for booked containers continues to grow with current container availability reaching a two-week backlog and on top of that, almost no carrier space to be had until the middle of October all whilst carriers are still charging for detention and demurrage.
US shippers and truckers are still awaiting feedback from a Federal Maritime Commission undertaking to take action against the liner industry for D&D charges, agricultural and industrial exporters in the US have approached President Joe Biden to intervene in week-long delays for containers, related costs and loss of income.
China completes Maersk deal, a transaction said to be netting Maersk $987.3 million reportedly the most lucrative in the line’s history of some 94 odd years, will see the Danish line part with its container manufacturing subsidiary after China International Marine Containers succeeded in the purchase of Maersk Container Industry.
With the deal now finally in the bag, after months of negotiations, Chinese factories will be responsible for manufacturing 96% of the world’s dry bulk containers, and 100% of all reefer boxes effectively handing China a monopoly in the global container business.
China power constraints cause havoc, Copper prices fell on Wednesday as investors reduced risk exposure amid uncertainty caused by a power restriction in China.
Power restrictions in China have hurt supplies of some metals in recent months, but electricity curbs recently spread to more downstream sectors such as tech giants Apple and Tesla which poses a threat to supply chains and could break at the peak season for the sale of electronic goods and items in China.
A trade squabble with Australia has led to the shortage of coal where almost 60% of the Chinese economy is powered by coal, it is estimated that up to 44% of China’s industrial activity has been affected by power shortages which has enraged the public and has also caused shutdowns to traffic lights and 3G mobile phone coverage in some areas.
President Xi Jinping’s decision for Beijing to stop building new power plants overseas is bad news for Zimbabwe too as the African country is heavily dependent on China after it had sanctions imposed on it by the United States and some European countries because of former President Robert Mugabe’s human rights abuses and a policy of seizing land from white farmers.
Zimbabwe was planning to build several coal-fired power plants costing a total of US$15 billion, with Chinese lenders initially committing to fund them.
However, earlier this week, in a pre-recorded speech to the United Nations General Assembly, Xi sounded a death knell for several coal projects, including in Zimbabwe, for which Chinese lenders were expected to provide financing.
China is going on a week-long holiday starting October 1, with investors squaring positions ahead of the break to reduce exposure in a volatile market environment.
Zimasco completes feasibility Study, the Zimbabwean ferrochrome producer has completed a feasibility study for the construction of the Mberengwa furnaces, where it also hopes to open new mines in the same district.
The company announced a US$35 million investment in new furnaces at its Kwekwe smelting facility, as part of a goal to expand output by 40% by the end of next year.
Zimasco had plans previously to create a joint venture with Afrochine, a Chinese mining firm for the Neta project however, after Afrochine, a subsidiary of Tsingshan Holding Group, backed out of plans to build an iron ore mine and a carbon steel plant in Zimbabwe, the company will now pursue this alone.
The Mberengwa furnaces will have the capacity to produce 160,000 tonnes of ferrochrome per annum
The new Kwekwe furnaces will have a capacity of 72,000 tonnes per year, increasing Zimasco’s ferrochrome production from 180,000 to 252,000 tonnes.
A 300,000-tonne-per-year sinter plant is part of the project, where the company will be able to exploit its crumbly ore resource, something it has previously been unable to accomplish due to obsolete technology at existing chrome smelters.
Liquidator at KCM arrested, State-appointed provisional liquidator of Konkola Copper Mines has been arrested and charged with laundering more than $2million.
The commission alleged that Milingo Lungu, acting with others, engaged in theft involving 110.4-million Zambian kwachas and $250,000 between May 22, 2019 and August 15, 2021, he also obtained money by false pretences amounting to $2.2-million.
Lungu’s appointment at KCM in May 2019 triggered a legal battle with Vedanta Resources, KCM’s parent company.
Zambia’s president to meet IMF, Zambia’s president Hakainde Hichilema is due to meet officials at the International Monetary Fund and World Bank in Washington, as the southern African nation tries to secure a lending programme to help it emerge from a debt crisis.
Zambia became the first African country to default on its sovereign debt during the COVID-19 pandemic after failing to keep up with payments on nearly $13 billion of international debt where a quarter of this debt is held by China and Chinese entities via deals shrouded in secrecy clauses, complicating negotiations for IMF relief.
Finance minister Situmbeko Musokotwane said last month securing an IMF programme was critical to restoring creditor confidence and giving the government access to cheaper and longer financing.
Moz government needs $300 Million to rebuild, Mozambique needs $300 million to rebuild insurgency-hit Cabo Delgado Province, the country’s Prime Minister said earlier this week.
The funds will go towards footing the bill for an emergency plan for post-conflict recovery and restoring normalcy in recovered districts in the north of Cabo Delgado.
In July, SADC countries started deploying forces to assist the Mozambican Defence Forces to fight insurgency and terrorism in the northern region.
The joint force in Mozambique is made up of the country’s Security and Defence Forces, the SADC mission to Mozambique as well as a deployment of the contingent comprised of members of the Rwanda Defence Force and the Rwanda National Police.
Rwanda was the first to send 1,000 troops to Mozambique, followed by Botswana with 296 troops whilst South Africa deployed 1,500 soldiers. Zimbabwe also sent 304 military instructors to train Mozambican soldiers to fight insurgents.
“It doesn’t matter how slow you go as long as you don’t stop”
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”
Border updates, chaos had once again returned to the Beitbridge border post over the festive period, from what seemed to be been a victory leading up to the December month turned south very fast as queues of up to 35kms were experienced at a stage, the lifting of COVID testing for drivers going north and the failure of system implementations all added to this, on the flipside, drivers coming south into South Africa also faced problems when the South African Department of Health demanded that all inbound travellers were to be tested for COVID which lead to around 2000 trucks being detained at Beitbridge, this also created fears of health risks to travellers and residents within the Beitbridge area.
This past week there has been concern for possible super spreader events as thousands of people have been stuck on the Zim side waiting to enter South Africa, most not wearing masks and not adhering to social distancing measures, this issue arose when authorities in Harare announced that only Zimbabweans with South African permits would be allowed to cross the Limpopo heading south.
Delays continue further to the east at the Ressano Garcia border between Mozambique and South Africa which has resulted in trucks and other vehicles queueing three lanes abreast for at least 10 kilometres. The delays are starting to become so bad that Mozambique yesterday requested clearing agents and customs authorities at Lebombo Border Post not to let anyone through.
It seems that South African truck drivers have been denied access into Angola, however the Angolan government is denying this.
This emerged after a high-ranking official from Namibia’s hinterland logistics sector confirmed that at least three senior officials from the Trans-Cunene Corridor had told him that trucks entering Angola must be driven by Namibian drivers. According to an Angolan official, this is untrue and the only request that they have is that drivers must present the RT-PCR test of the country of origin, however the TCC emphasised that if this coronavirus testing measure was negative, all truck drivers were allowed to proceed to their destinations as per international transit protocol.
Level 4, Zimbabwe entered level 4 lockdown on Tuesday for a period of 30 days which restricts the country’s movement to almost a standstill, inter city travel is prohibited unless you are an essential worker and only the mining, agriculture and manufacturing sectors are currently allowed to operate. It is also noted that only Zimbabwean citizens are allowed to enter the country.
The South African government is also currently in council where rumours are rising that South Africa itself will be entering a harder lockdown, this comes after the country entered level 3 on the 30th of December last year which was expected to only last two weeks, however there has been an emergency meeting called and the citizens now await the verdict, roadblocks have been setup on provincial borders this week adding to the rumours that a harder lockdown will be put in place.
Caledonia to enter further exploration, Caledonia can gain exclusive rights to explore and subsequently, if exploration is successful and at its sole discretion, acquire the mining claims over an area known as Connemara North, a property which, like Glen Hume, is situated in the Gweru mining district in the Zimbabwe Midlands that has historically produced significant quantities of gold.
Connemara North is approximately 30 km from Glen Hume with good road access between them offering the potential of operating in synergy should Caledonia decide to develop both areas.
It has not been commercially mined since 2001 before being placed on care and maintenance. Connemara mine produced approximately 20 000 ounces of gold per annum from an open pit heap leach operation. Originally in 2001 First Quantum indicated that they had plans to expand the existing open pit operations at Connemara mine but this never materialised.
The option gives Caledonia the right to explore the area for a period of up to 18 months.
Kuvimba seeks $1 billion for acquisitions, Kuvimba Mining House Ltd., in which the Zimbabwean government is the majority stake holder at 65%, will invest an incredible amount of the cash raised on the Darwendale platinum project, which belongs to its Great Dyke Investments unit. Kuvimba is held by government pension funds and Zimbabwe’s sovereign wealth fund.
It is believed that around $100 million will be set aside for acquisitions and capital expenditure over the next 12 months.
The group, whose portfolio includes gold, nickel and platinum, will raise part of the money internally through its operations, it will also issue debt. Kuvimba has three working gold mines producing about 300 kg of the metal each month and owns a nickel mine with monthly output of 550 tonnes.
The company is finalizing negotiations to acquire Metallon Gold Zimbabwe Ltd.’s Mazwoe mine. It is looking at other assets such as lithium, nickel and copper and further exploration into Africa.
Zambian court orders liquidator to stay, A Zambian court has ruled the state-appointed liquidator of Vedanta’s Konkola Copper Mines will not be discharged despite a November ruling ordering a halt to proceedings to allow Vedanta and minority KCM shareholder ZCCM-IH to pursue arbitration.
The government accused Vedanta of failing to honour licence conditions, including promised investment. The liquidator has since said he intends to split the company, with possible asset sales to follow.
In a statement after the ruling, KCM provisional liquidator Milingo Lungu said his powers were valid. He said he would split KCM into two companies effective Jan. 31, and that asset disposal was likely KCM’s only remaining option.
Given the impasse between stake holders and government it is unclear whether any keen consumers might be discovered.
International Legal opinion maintains that there would be no way a provisional liquidator could commence with disposing of KCM assets because anybody buying them would effectively be acquiring tainted property and would therefore be party to an unlawful act.
Copper growth in Africa expected to grow! Demand in China is remaining especially strong as it moves out of the crises towards full normalization of all economic activities. Prices have rallied and surged in part attributed to the various disruptions from top producer Chile.
Long term outlook remains positive and demand set to increase with investments in electric vehicles and renewal energy as well as infrastructure projects particularly being driven in China. Prices are also being pushed up by grade decline, rising input costs, water constraints and high-quality development opportunities becoming scarce. These factors will continue to push prices up as well as motivate miners to improve their margins by introducing better efficiencies.
New SA trade agreements! Friday marked the start of trade for South African firms under two new trade agreements, the Trade and Industry and Competition Department said. These agreements are with countries ready to trade under the African Continental Free Trade Agreement (AfCFTA) and with the United Kingdom following Brexit.
South Africa had put in place the legal and administrative processes for the start of trade under the AfCFTA on January 1, 2021 following a decision to start trading under the AfCFTA by the 13th extraordinary session of the assembly on the AfCFTA on December 5, 2020.
The AfCFTA agreement which was signed by 54 of the 55 African Union member states consisting of 34 countries had already given their approval to the AU Commission and became state parties, the parties include Angola, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Congo, Djibouti, Egypt, Eswatini, Ethiopia, Equatorial Guinea, Gabon, The Gambia, Ghana, Guinea, Kenya, Lesotho, Mali, Mauritania, Mauritius, Namibia, Niger, Nigeria, Rwanda, Saharawi Arab Democratic Republic, Sao Tome and Principe, Senegal, Sierra Leone, South Africa, Togo, Tunisia, Uganda, and Zimbabwe.
In addition, trade for local firms with the UK commenced on Friday under the new economic partnership agreement between six southern African countries which include South Africa, Lesotho, Eswatini, Namibia, Botswana and Mozambique replacing the European Union partnership terms for the UK market that was in place until December 31, 2020.
The UK agreement effectively retained the terms of trade in the existing EU agreement and would govern the bilateral trading relationship between each of the Southern African countries
SADC must tackle Mozambique’s terrorism!! Up to now, Mozambique has only requested SADC to provide military supplies, as Maputo resists any kind of external support that may lead to multilateral foreign intervention.
This is not a crisis that one country can solve alone; the Institute of Security Studies noted.
President Nyusi announced his intention to eradicate the violent extremists but his government has been unable to do so for the past three years and each passing day strengthens the extremist resilience and complicates the liberation of Cabo Delgado and the millions of Mozambicans at risk.
Although Mozambique had enlisted Russian and South African mercenaries to help fight the insurgency, no single SADC state has the military strength or financial capacity to intervene in Mozambique said the ISS.
United Nations has pledged to raise $254 million to assist terrorism-affected people in Mozambique. The plan will be deployed in 2021 and is expected to benefit 1.1 million people in the Cabo Delgado province and surrounding areas.
According to humanitarian bodies, the resources will be used to establish new camps for refugees and internally displaced persons.
In the meantime, Total SE has asked some staff to vacate its $20bn Mozambique liquefied natural gas (LNG) project with fighting reported to be less than 5km away from the plant.
The situation is grave and set to worsen with the terrorists taking control of transport links, terrorizing villagers and depopulating towns. Urgent intervention is needed.
“The Earth is a beehive, we all enter by the same door”
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”
Level 1 restrictions eased, on Wednesday night 11th November 2020, South Africa’s president, Cyril Ramaphosa announced the easing of South Africa’s level 1 lockdown, opening the borders up to international travellers as well as allowing alcohol to be sold within the pre-covid trading hours, this is yet another step in slowly opening up the economy and to allow more growth, although opposition parties and leaders have bemoaned the extension of the state of the disaster it seems the people of South Africa as a whole are feeling more positive.
Border updates, the Beitbridge saga continued since the last report, however as of yesterday it is noted that congestion has eased significantly, with compliments pouring in from the transport industry about the SA Revenue Service’s decision to discontinue issuing CN2 gate passes at Beitbridge, an intervention that now appears to have completely decongested northbound transits. There is however a slight delay on the Zimbabwean side as authorities were overwhelmed with trucks crossing from the SA side but they are dealing with each truck in good time.
This is a breath of fresh air since the 21st of October when the congestion began, reports of crime and violence emerged as well as a driver losing their life.
We hope the new system implemented can keep traffic at a free flow for some time to come.
A joint effort between DRC and Zambian officials have effectively decongested the Copperbelt crossing of Kasumbalesa, that in the past has been known as a notoriously problematic border.
Prior to the Covid-19 lockdown, Kasumbalesa’s fragile workability could result in cargo disruption at any given time. The impact was immediately felt when COVID-19 hit, leading to a northbound cargo queue stretching some 90 kilometres south-east through Chingola towards Kitwe.
Knowing that vast action was needed to clear the border and boost imports and exports into the region which is known for its copper mines, DRC and Zambian authorities got together to combat a troublesome border which resulted in the decongestion in under a week. This just proves once again that when people come together nothing is impossible.
Zimbabwe under pressure to end gold sales, Gold mining investors are pressuring Zimbabwe to change a law forcing producers to sell their output to the central bank, who then part pays them in local currency that is useless outside the country.
Whilst mining investment is key to rebooting Zimbabwe’s collapsing economy, the nation suffers from a shortage of dollars. As the rally in bullion generates more interest in the industry, the government is weighing its options on whether to grant investors gold-trading licenses.
Zimbabwe currently forces gold miners to sell their bullion to Fidelity Printers and Refiners Ltd. It pays them 70% in dollars and the remainder in local currency.
Bravura enters the frame; Nigerian owned Bravura Holdings has $1 billion available for the development of a platinum mine in Zimbabwe.
The 3,000-hectare concession where it plans to dig the mine is in Selous, 80 Kms south of Zimbabwe’s capital Harare which is close to existing platinum mines.
Bravura is one of a number of companies that have secured platinum concessions in Zimbabwe as the government seeks to kick start its stagnant economy. Still, established platinum miners haven’t announced plans to expand their operations.
While Zimbabwe has the world’s third-largest platinum group metal reserves, investors have been deterred by frequent changes to mining laws and currency policies.
Rare diamonds have been discovered in Matabeleland South and Masvingo provinces, the findings come after Alrosa, a Russian mining firm had done extensive exploration at the Malipati Diamond Project and say these findings have the potential to change the face of Zimbabwe’s gem industry.
In collaboration with state-owned diamond miners ZCDC, Alrosa has come to this discovery on finding this “Type II” diamond. Type ll diamonds have no nitrogen in their composition and come with a much higher price tag to them.
Rushinga District in Mashonaland Central province there is a potential new Chinese investor looking at the exploration of iron deposits.
The investor, who already has steel smelters in China’s city of Handani are under pressure to curb pollution, has already partnered local investors with plans underway to develop mines and build smelters, this is, however, subject to an in-depth exploration to confirm commercial quantities and quality of the resource. There is evidence of the existence of iron deposits in mountain ranges of Mavhuradonha, which stretches into Mozambique.
The project has been in the pipeline for the past 18 months, but was delayed due to global pandemic, supply chains disruptions and travel restrictions.
The investor had plans to commence production in 2023.
A special tasks force within the Ministry of Mines and Mining Development, has been formed to oversee the implementation of the project.
Zimbabwe Iron and Steel Company is Zimbabwe’s only integrated steel firm, however operations stopped in 2008 due to lack of capital and poor management. The company had capacity to produce up to one million tonnes annually, the company was among Zimbabwe’s major foreign currency earners.
Kakula tunnels successfully connected, Kakula mine in Kolwezi, DRC which is being developed in the eastern part of the Kakula deposit has reached a major milestone as the Northern and Southern tunnels have now been successfully connected.
Kakula is the first of many underground copper mines to be developed in the 400sq km region, the average grade of copper is said to exceed 8%.
The Kakula Mine is expected to have a mine life of approximately 21 years, whilst Kakula West which is Kamoa-Kakula’s third underground mine to be developed has a projected mine life of approximately 16 years.
The underground development on the south decline was performed by the mining crew of JMMC who are the DRC subsidiary of leading Chinese mining contractor JCHX, the northern decline was performed by Kamoa Copper’s mining crews.
Further developments are planned to commence mid next year where a set of connection drives is expected to hole by June 2021 which will open up an additional high-grade and medium-grade mining block and phase 1 copper concentrate production from the Kakula Mine is scheduled to begin in July 2021.
Earlier in the month Nanjing Hanrui Cobalt Co Ltd, advised that they expect to start their cobalt production line in the DRC Later this month, moving into December.
The 5,000-tonnes-per-year production line in Kolwezi, DRC, was expected to be running earlier this year but due to the COVID-19 pandemic all operations were placed on hold.
The firm was still discussing sales contracts with foreign traders and domestic users.
Terrorising of Mozambique continues! More than 50 people were killed in a terrorist attack last Friday in northern Mozambique where insurgents attacked a village.
Up to 2,000 people have been killed and about 430,000 have been left homeless in the conflict in the mainly-Muslim province. The militants are linked to the Islamic State (IS) group, giving it a foothold in southern Africa.
The group exploits poverty-stricken areas and the unemployed and grows their numbers by recruiting the youth in their fight to establish Islamic rule in the area. Many locals complain that they have benefited little from the province’s ruby and gas industries.
Zimbabwe president Emmerson Mnangagwa has recent said that he will be sending troops over to help with the insurgents.
“If you climb up a tree, you must climb down the same tree”
Prices on the rise as materials disappear, buckle in!! Further steel price increases have been announced for November which will be the ninth consecutive increase this year exacerbated by low stocks countrywide. South Africa is facing a steel shortage and explosive prices.
This trend has now moved over to the HDPE and Plastics sector and shortages of raw materials are being experienced by all the major manufacturers. Output as a general for HDPE polymers was 3,300 Tons per month which then dropped to 2,500 tons and as of the latest notice a further 15% drop is expected in production.
Various factors have been blamed both locally and internationally and Force Majure has been announced by many different industries who find themselves unable to perform to their pre-covid-19 service and production levels.
Output as a general for HDPE polymers was 3,300 Tons per month which then dropped to 2,500 tons and as of the latest notice a further 15% drop is expected in production.
Border updates, Chaos at Beitbridge over the past week, A motorist sadly passed away last week when a bakkie travelling south towards Musina from the Beitbridge border post between South Africa and Zimbabwe collided with a truck that had reportedly crossed into the oncoming lane to overtake gridlocked traffic heading north. The fatal collision once more demonstrates that traffic officials should be held culpable for allowing cars and trucks going north to drive three abreast on a single-lane highway.
Intervention seems to be on the cards after the build-up of traffic south of South Africa’s Beitbridge border with Zimbabwe has deteriorated to such an extent that some sources say it is the worst it has ever been this century.
This comes after northbound transporters stuck at the Limpopo crossing posted video footage on social media of the Transit Assistance Bureau clearly showing how trucks, cars and buses were milling around as if no traffic officials were present to establish order. The queue already stretched to the Baobab truck stop some six kilometres south of the border.
Suggestions were made to officials that the border should be opened up to clear the congestion and alleviate pressure on officials clearly incapable of coping with mounting volumes.
Since the suggestions were made, South Africa’s Beitbridge border into Zimbabwe has virtually transformed and a recorded 18km queue has been reduced down to less than 1km. The northbound queue has also has also been reduced to a single lane of traffic.
Last week at the Lebombo Border Crossing there was also a backlog as vehicles trying to cross into Mozambique from South Africa came to a standstill, chrome trucks, general cargo and the bakkie brigade loads jockeying for position whilst customs continue to take their time.
Call went out for the border to operate 24/7 and it seems that the cries were heard, transit times at the border have been substantially reduced with around 450 trucks cleared every 24 hours.
Meanwhile there is no certainty about what the border authorities have done but it’s obviously helping, bringing much-needed relief to private sector interests who often complain of extended standing time at the border.
The real test will come towards the end of the week as volume often picks up towards the weekend.
Finally, the opening of the Kazangula Bridge may happen before the end of the year, the bridge was initially supposed to be completed back in 2018 but due to various delays there is now a promising outlook that the opening will be soon, this comes after it was reported that ZRA had announced that it would be moving its regional office from Livingstone to the southern Zambian town from which the much-hyped linkage has taken its name.
Speaking to a Zambian news site, ZRA emphasised that the $70-billion bridge into Botswana would boost trade in Zambia’s southern province significantly, with tangible benefits for revenue collection.
Transporters will also not need much persuasion to divert traffic away from other north-south route border posts such as Beitbridge, considering the shambles it has been of late.
Zimbabwe mineral production increases, The Zimbabwe mining industry has managed to stay afloat with sustainable, profitable and balance production results whilst still fighting off the challenges faced within the mining sector.
Adding onto this, the mining sector has become quite optimistic about 2021 with the ever-improving commodity prices and a favourable local fiscal the sky is the limit for Zimbabwe in 2021.
90 percent of miner’s plan on upscaling production in the coming year with the other 10 percent expecting production to remain the same. Gold output is expected to increase around 30% in the coming year, followed by platinum and coal spurred by world commodity prices that continue to move upwards.
Terrorism crossing the border! The Islamist terrorist group operating in the Cabo Delgado region of Mozambique have made their away across the border to Tanzania, where it is reported 20 people were beheaded.
The attack was carried out against the village of Kitaya, in Mtwara province, near the border with the Cabo Delgado district of Palma.
According to military sources cited by the newsheet, the terrorists entered Tanzania by sea, going up the Rovuma river that forms the border between Mozambique and Tanzania.
The raiders burnt down houses, destroyed an armoured vehicle and stole money and military equipment. The terrorist network that calls itself “Islamic State” claimed responsibility for the attack, and reported three Tanzanian soldiers had been killed in the ensuing battle that followed.
“Rain does not fall on one roof alone”
Level 1, last night, President Cyril Ramaphosa announced that as of Monday 21 September South Africa would enter Level 1 of the lockdown, further unlocking the country’s economy and society whilst we await the final decision on the construction and mining sectors possibly returning to 100%; international travel has been allowed to and from countries that are not high risk areas and only a few land borders remain open at this stage although strict criteria will need to be followed.
Border updates, not much has changed at Beitbridge with operating times at 50% of the usual, curfew is still in place however there is speculation that by end of the week big changes will be implemented. Last week news broke that Beitbridge was to go ahead with the COVID-19 testing on every person entering the country as of Monday this week however, there doesn’t seem to be any system in place currently and drivers are not being tested.
Reports are emerging that the Chirundu border post has now implemented the testing of every driver that is entering the country despite no official confirmation of this. Massive delays for trucks going north into Zambia and DRC are however being experienced.
Botswana throws more fuel to the fire, call has gone out for greater regional adherence to guidelines and regulations after it emerged earlier this week that Botswana would still be doing its own testing for the coronavirus, despite the Southern African Development Community (SADC) making it compulsory for truck drivers to cross borders with “Covid-19 certificates” in hand.
Although only laboratories can issue the relevant documents declaring whether or not bearers have tested positive or negative for the virus – a curbing measure that came into effect on Monday morning – a freight representative said Botswana would not take the certificates as legit and would still do its own testing.
For the first time in weeks Kasumbalesa has been running smooth with no problems reported.
Zimbabwe cancels mining concession in national parks, Zimbabwe’s government has announced that mining on areas held by national parks is banned with immediate effect.
In a statement issued last week Tuesday evening after a cabinet meeting, an announcement by Minister of Information Monica Mutsvangwa said “Mining on areas held by National Parks is banned with immediate effect, steps are being undertaken to immediately cancel all mining titles held in National Parks.”
This comes after a public outcry and the threat of a court battle after President Emmerson Mnangagwa’s government granted exploratory rights for coal to two Chinese companies in one of the country’s most iconic reserves, Hwange National Park.
The decision has been welcomed by various conservation groups and The Zimbabwe Environmental Law Association.
FQM to expand, Canadian company First Quantum Minerals (FQM) has announced its plans to expand operations at the Kansanshi mine in Zambia.
The Kansanshi Mine is one of the largest copper mines in the world, with two open pits.
The mine began operations in 2005 and has undergone several expansions since then. In a technical report, the Canadian firm said that it plans to expand the sulphide ore processing facility at the Kansanshi mine by 25 million tonnes per annum (Mtpa).
This is expected to boost the mine’s annual throughput to 52Mtpa.
First Quantum expects to spend approximately $650m for the expansion in about two years, starting in the H2-2023.
“Whether You Think You Can Or Think You can’t, You’re Right”