Mittal shutdown postponed; ArcelorMittal has announced that their planned shutdown at the Newcastle Furnace has been delayed till the end of March.
The announcement comes after the mill decided to build up steel supplies to carry the industry over the three months that it will be in care and maintenance.
There is the rising concern that South Africa will once again face a shortage of steel at the beginning of the second quarter going into Q3 due to Mittal’s shutdown as well as price increases to go along with the shortage.
Please be mindful of the shutdown and plan accordingly.
Global steel prices expected to remain elevated in 2022, players within the steel sector are becoming increasingly cautious in their purchasing requirements. The forward view on global prices is, gradually, turning more negative, particularly for coil products. The record high values reached towards the end of 2021 took many by surprise.
The peak of the price highs occurred at differing points in each region. European prices peaked at their highest level in June of 2021, while those in North America peaked in September as Asian prices levelled off.
The outlook for the start of 2022 is clouded again by Covid-19 sweeping across the globe. The ominous Omicron variant perhaps slowed the recovery in the steel market.
Prices are expected to find support above historical averages, due to increased mill input expenditure and moves to decarbonise the industry. The economic outlook for 2022 is also relatively strong. This is despite downside risks associated with new Covid variants and the expected tightening of monetary and fiscal policy in many countries.
Supply chain shortages are still disrupting the global steel market and are preventing a strong recovery in 2022. Due to the backlogged steel orders, the demand will remain high throughout the year.
Because of the demand for the limited inventory available, steel prices will continue to go up in 2022. The U.S. steel industry is currently valued at $180 billion and began to boom in 2020 thanks to the disruptions caused by COVID-19.
Increased business and consumer spending habits have driven up the demand for steel-bearing products, which are needed for everything from vehicles to food cans. Buyers in some instances are willing to pay more for these products and will continue to pay increased prices throughout 2022.
ATDF, again denies protest, The Port of Richards Bay was the scene of a peaceful, albeit illegal, protest against the employment of undocumented foreign truck drivers on Thursday morning as protesters pulled over several truck drivers before the police intervened.
Upon arrival at the scene, SAPS spoke to a person who was identified as the leader of ATDF on site however, the secretary for the All Truck Drivers’ Forum, Sifiso Nyathi, said the organisation had nothing to do with the protest and that it appeared that unemployed people were using the name, although they had no affiliation to the forum.
Nyathi said the ATDF would oppose the hiring of illegal immigrants via formal, legal channels. Forums have been set up to engage with all relevant parties and government authorities and hopefully it will result in a workable policy that allows the industry to move forward in a positive and safe way.
Airfreight on a tricky path, spike in demand, soaring rates, and a tricky balance between certain markets remaining closed to curb Covid and others reopening to global trade, necessitate fine footwork from the airfreight sector.
The current situation of high demand and even higher rates was expected to last for the duration of the 1st quarter, before tapering off in Q2.
At least that’s what Aero Africa is hoping for, that there’s respite for shippers somewhere in the near future.
Until then, the struggle to find space and allocation for clients in a confined market continued, especially out of China.
Snags on the ocean side are fuelling an overflow of critical orders to air, sustaining demand, but capacity into Africa and its important sub-Saharan transhipment hub of South Africa remained a problem.
South Africa’s block space agreement out of China is on hold because the carriers are on hold, China cannot commit to freighters in South Africa because they are going into the US where the yield is better and as a result, options out of China have become few and far between, with agents fighting for space that is often elsewhere allocated because of market dynamics which is attributed to the strength of the dollar and the primacy of American imports to name a few.
Ocean freight costs expected to remain high throughout 2022, Shipping rates are expected to stay elevated well into 2022, setting up another year of booming profits for global cargo carriers.
The spot rate for a 40-foot container to the US from Asia peaked at just over US$20,000 last year up from less than US$2,000 a few years ago and was recently hovering near US$14,000.
Tight container capacity and port congestion also mean that longer-term rates set in contracts between carriers and shippers are running at around 200% higher than a year ago, which signals that elevated prices are here to stay for the foreseeable future.
Larger customers like retail or tech giants have the power to negotiate better terms in those deals or absorb the added expenses whereas the smaller importers and exporters that rely on carriers to haul everything from electronics and apparel to grains and chemicals, cannot easily pass those costs along or weather long periods of stretched cash flows.
Regulators from the US, the EU and China met in September and determined there was so far no evidence of anti-competitive behaviour in container shipping. Governments are on high alert as global supply chains are being pushed to the breaking point.
The US Federal Maritime Commission says it has increased monitoring of carrier alliances, to better track trends and spot potential illegal behaviour, such as artificially limiting supply or not competing on prices.
Zambia to continue with plans to sell KCM, Zambia’s state-appointed liquidator who is managing the affairs of KCM said he would proceed with the dismantling of the company and the sale of its assets.
This was after the Lusaka Court of Appeal earlier this month declined to discharge the liquidator, Milingo Lungu, despite ruling earlier that he should arbitrate a dispute with KCM’s majority shareholder, Vedanta Resources.
ZCCM Investment Holdings, a 20.6% stake holder in KCM, applied to put the company into provisional liquidation in 2019. Vedanta argued the step was unlawful as there were conditions in their shareholders’ agreement allowing for dispute resolution.
ZCCM said Vedanta had failed to invest in KCM’s assets and had not paid dividends as previously promised.
Despite being asked to enter into arbitration proceedings with Vedanta, Lungu said that he would divide KCM into halves, effective January 31, and then embark on an asset disposal programme.
Zimplats allowed to set up solar plants. The Zimbabwe Energy Regulatory Authority announced on Friday that it had granted Zimplats a licence to construct, own, operate and maintain a 105 MW solar power plant at Ngezi Mine.
A similar notice was also published but this time for the generation of an 80 MW solar power plant at Zimplats’ Selous Mine in Chegutu.
Zimplats says setting up the two power plants will cost the company as much as $201 million.
Zimplats is not the only miner that has turned to solar power as gold miner Caledonia Mining, which runs Blanket Mine in Zimbabwe is constructing a 12 MW solar plant which is expected to be operational this year and will exclusively supply Blanket with approximately 27% of its daily electricity usage.
Copper prices on the rise, the copper price rose on Wednesday, supported by expectations of further policy easing in China.
March delivery contracts were exchanging hands for $9,856/tonne on the Comex market in New York, up 2.3% compared to Tuesday’s closing.
The most-traded March copper contract on the Shanghai Futures Exchange was steady at $11,026.46/tonne.
China, the world’s biggest buyer of metals, has been stuck in a property market slump, credit stress and repeated virus outbreaks. In response, the central bank this week cut its policy interest rate for the first time in almost two years, signalling the beginning of an easing cycle.
China’s copper exports rose to an annual record of 932,451 tonnes in 2021, according to customs data.
Gold also rose to its highest in two months this past Wednesday.
Fears that insurgents planning more attacks in Cabo Delgado, The SADC has warned that insurgents are regrouping for more coordinated attacks.
While SADC has noted considerable gains in Cabo Delgado, there are genuine fears that insurgents have withdrawn to regroup and are planning rejuvenated attacks.
“The insurgency is not yet neutralised. The violent extremists are regrouping, launching attacks from several parts of Cabo Delgado and they are also expanding to neighbouring province Niassa where they have launched significant attacks,” said Professor Adriano Nuvunga – the Director of the Centre for Democracy and Development.
SADC sent in its Standby force into Mozambique’s gas-oil rich Cabo Delgado in July last year, a month after Rwanda sent in troops.
At the onset of the SADC Mission in Mozambique, Nuvunga said the insurgents were disbanding. However, six months later, they had changed their strategy.
At the beginning of the deployment, the country saw violent extremists disbanding. Now they have seen them regroup and move in terms of recruitment.
On December 15 last year, Islamic extremists in Nova Zambezia, Macomia district, beheaded a pastor and instructed his wife to take his head to the police with a message: “While you [government forces] are walking on tarred roads, real men [insurgents] are in the woods.”
As a show of power, the insurgents operating from the bush ambushed SAMIM forces in the east of Chai in the northern Macomia district on the night of December 19, resulting in the death of a South African soldier.
Intel also suggests that the insurgents have support within communities they operate, with some civilians assisting them in transporting arms.
Since the insurgency began in 2017, there have been 1,111 cases of political violence with 3,627 reported fatalities during these attacks and 1,587 reported fatalities from violence targeting civilians.
“Great things are done by a series of small things brought together.”
Steel price increases on the way? After our last Trade Winds update advising of a steel increase of R1200.00/Ton set for next week, rumour has it that the two other major steel mills are increasing their prices as of next month.
Prices are increasing, demand remains high but with ArcelorMittal’s care and maintenance closure at their Newcastle Plant, supply has dipped and is expected to continue to be low throughout Q4 and into Q1 next year.
The care and maintenance is expected to start from 22nd November 2021 and run into early next year.
Whilst the strike remains in place at the Vanderbijlpark plant there is little to no disruption at the moment.
Plastics, HDPE, Rubber and PVC have once again climbed in pricing due to international force majeures as well as the rising price of oil which directly fuels the raw material price of the abovementioned products.
Border updates, Beitbridge is currently recording preclearance times that have not been seeing in decades.
According to the latest GPS data received from the once heavily congested transit, it is now taking less than 12 hours for a truck to pass through the border with the latest on-average processing times as follows:
- Four hours from Zimbabwe into South Africa.
- Eight hours from South Africa into Zimbabwe.
To put it into perspective, at the Kazungula Bridge across the Zambezi between Botswana and Zambia, processing still takes longer than 24 hours on average however, the difference is that Kazungula is a single-window one-stop border post compared to Beitbridge which isn’t.
Closer comparison reveals that at Kazungula it takes up to 25 hours for northbound trucks entering Zambia.
Where week-long waiting queues had been the norm up until early October, the speed in which cargo is now being processed at Beitbridge, is simply due to transporters adhering to preclearing procedures. If trucks arriving at the border with documentation not being in order, they are then set to a truck yard where they are then marshalled towards a holding area.
Fines of R20 000 had been recently introduced by the SA Revenue Service for non-compliance with clearing procedures.
This is great news for importers, exporters and everyone involved at the border as the notorious congested border crossing is now a free-flowing port.
Truck drivers’ strike struck off the roll, the imminent truck driver struck has been cooled as government has stepped in.
The South African Transport and Allied Workers Union (Satawu) has welcomed government’s plans to crack down on foreign drivers who are working in the country illegally.
The Departments of Labour, Transport, Police and Home Affairs recently announced that they may change legislation to make it tougher for non-South African workers in the sector which includes the prohibition of foreign nationals from operating South African registered trucks using foreign professional driving permits.
It follows last month’s blockading of several national highways by striking truck drivers.
Load-shedding to be eased by energy investments, as new electricity generation capacity comes online, energy investments are said to help overcome the debilitating load-shedding that the country is currently experiencing.
Cyril Ramaphosa has said that energy continues to be an area of growth in South Africa as the 25 preferred bidders in the fifth round of the Renewable Energy Independent Power Producer Procurement Programme were together, expected to invest around R50 billion into the economy.
South Africa has recently secured an initial commitment of around R131 billion to fund a just transition to a low-carbon economy by investing in renewable energy, green hydrogen and electric vehicles.
The country has been once again rocked by power cuts this past week with stage 4 load-shedding disrupting the day to day lives of citizens and businesses.
Airfreight on the rise, latest figures show on airfreight that year-on-year capacity for October has increased by 17% with a three percentage point drop-off in dynamic load for the same year on year period, with take-up currently standing at 68%, an increase of 2% from the previous month suggesting that demand is slowly catching up.
Interestingly flights ex-Asia Pacific-Europe remained virtually full, lifting rates by a further 20% over September 2021, while Apac-North America rates reached a double-digit level per kilo. Overall, international rates rose 10% month over month.
Although capacity for air cargo is increasing, neutral consolidator CFR Freight says available space is limited and that rates are regularly upsold at the time of booking due to excessive demand.
It is recorded that rates have increased by up to 37% at the end of September compared to the previous year.
Maersk signs transport deal, Vestas, a Danish wind turbine manufacturer has gone into a joint venture with Maersk in a long-term strategic partnership for all its containerised transport needs which in turn will ensure that Vestas gets direct access to container capacity at a fixed price
The deal includes door-to-door transport from the company´s suppliers to their factories and service warehouses, as well as containerised site parts and transport equipment.
Airfreight shipments are included in the deal.
Non-containerised road transport and outbound shipments will continue to be managed by DSV and other partners.
Metal sector to continue its recovery into the new year, S&P Global Market Intelligence states that the metals sector is set to continue its rebound from the effects of the covid-19 pandemic through 2022.
Pent-up consumer spending, government stimulus efforts and the accelerating energy transition are all contributors to the continuation of driving demand, prices and exploration budgets.
The upswing in demand growth will drive prices higher across a range of metals in the medium term and there is a projection of increase in iron ore price volatility into 2022 due to the combination of underlying market tightness, potential supply disruptions and project delays as well as global supply and power constraints.
Copper on the other hand is expected to have a demand from solar and wind energy generation to reach 852,000 tonnes by 2022 and the growing electric vehicle market to account for 1.1 million tonnes in 2022.
Margins are also expected to remain healthy in 2022 for most metals, following the high prices and relatively steady costs experienced by producers in 2021.
Gold price climbs to 5-month peak, Gold kept its hot streak going this past Wednesday, rising by 2% to a five-month high after a surge in US consumer prices last month elevated gold’s appeal as an inflation hedge.
Spot gold was up 1.1% at $1,852.36 per ounce, having earlier hit its highest since June 15 at $1,857.09.December gold futures rose 1.4% to $1,856.70 per ounce.
Zimplats planning major expansion, Implats’ Zimbabwe-based unit Zimplats has announced plans to invest a total of US$1.8 billion over the next seven years towards mine expansion, as well as the establishment of a base metal refinery.
The bulk of the funds, amounting to US$386.2 million, will go towards the development of Mupani mine, which is a replacement for the depleting Rukodzi, Ngawarati and Mpufuti mines, whilst the base metal refinery plant will cost US$200 million.
The miner also plans to set up a 110 MW solar power plant at a total cost of US$201 million.
An expanded smelter will cost US$280 million and will see smelting capacity increased from 132 kilotons to 380 kilotons of smelted concentrators, while the development of Hartley mine will cost US$289 million.
The project will also enhance the company’s capacity to smelt its own resources and for local third parties.
Zambia implements tax breaks, Zambia will implement tax breaks for mining companies, with mining royalties to be deductible from income taxes, something the mining companies have complained about that not being able to deduct royalties resulted in double taxation and deterred investment.
Finance Minister, Situmbeko Musokotwane, did not discuss any changes on the royalty rates. Royalties are currently ranging from 5.5% to 10% which is dependent on the copper price.
Minister Musokotwane also said that the government will cut its budget deficit target, and that debt restructuring negotiations with creditors are expected to conclude in early 2022.
Gemfields finds largest emerald at its Kagem Mine, Gemfields has found a emerald weighing in at a 7,525-carat (1,505g) named Chipembele, which means “rhino” in the local dialect of Bemba.
Whilst there are no official records, it is extremely rare to encounter a gemstone weighing more than 1,000 carats and only a couple of dozen unique enough to deserve their own name.
The last time a comparable emerald was found was in 2018, when the same mining company unearthed a 5,655-carat emerald, name Inkalamu, meaning “lion”. Prior to that, a 6,225-carat dug up a emerald in 2010, which was named Insofu – Bemba for “elephant”.
“You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you”
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”
NUMSA strike to go ahead, At a CCMA facilitated Dispute between NUMSA and other unions earlier this week, NUMSA exercised its right to call for the issuing of a certificate of non-resolution.
With NUMSA having declared it’s dispute against all the employer organisations on the 29 July, and SEIFSA and the Associations having countered with its dispute against NUMSA on 2 August, NUMSA is within its right to call for the certificate.
We will monitor the situation and circulate any information received but the feeling is that we must prepare for the worst-case scenario.
Some striking has been noted at various steel merchants around Johannesburg which in turn will lead to some disruptions in steel supply.
Border updates, Beitbridge is once again the centre of attention as delays continue, this time with various contributing factors. SARS’s systems have gone down.
Trade flows through the routinely congested transit have been a nightmare of late, with processing delays on the Zimbabwean side of the crossing slowing traffic to a trickle.
Now, with SARS also experiencing issues, the queue south of the border is expected to worsen and transporters are advised to make the necessary preparations for a long wait.
The question also remains as to why trucks working the north-south line through the Southern African Development Community should be checked and charged by Zimbabwean authorities as often as they are at the two primary transits on this route – Beitbridge down south and Chirundu in the north.
At the Limpopo River crossing, alleged over-inspection is resulting in a queue stretching for kilometres south of the border, although processing is affected because of physical constraints caused by construction work, it still doesn’t explain why the Vehicle Inspection Department is inspecting cargo already weighed immediately south of the border.
Transport carrying SA’s GDP, South Africa’s transport sector grew 6.9% in the year’s second quarter, becoming the biggest sector to add to the 1.2% economic expansion announced earlier this month by Statistics South Africa.
The mining sector, sustained by a growing demand for raw minerals by global manufacturers, grew 4%.
The South African economy recorded its fourth consecutive quarter of growth, expanding by 1.2% in the second quarter of 2021.
The economic impact of the wave of severe economic disruption, protest action and violence in KwaZulu-Natal and Gauteng, which took place in July, will only reflect in the third quarter GDP results, due for release in December.
Solar Power to reduce reliance on Eskom, The generation of solar power by top-performing gold mining company Pan African Resources is expected to lower reliance on power utility Eskom by up to 30%.
Pan African’s focus is to function off the national electricity grid during daytime hours at the moment as power storage options appeared to be very expensive at the moment.
The group’s focus now is solar and making sure it works. Ten megawatts will be the first plant and by early next year it would have proven itself.
Pan African produced 12.4% more gold over the last 12 months and reported a 36% increase in operating profit to $128 million.
Container rates continue to soar, container rates have more than quadrupled since the beginning of this year as shippers across the globe drive prices to levels well beyond the previous peak recorded 16 years ago.
The peak from 2005 is a whopping 128% lower than the level to which the current rates have increased.
To make matters worse for freight forwarders battling to keep up, the 128% increase is expected to curve upwards into 2022.
There is some hope as some freight liners such as CMA CGM have announced that freight rates will be paused till early next year as well as German shipping major Hapag-Lloyd confirmed that it had put a hold on freight rate increases on certain routes and would continue to do so for the time being.
Port congestion and severe capacity shortfalls have put shipping lines in the driver’s seat as rates skyrocketed. However, with lines under increasing pressure from shippers and regulators, perhaps this is the start of a cooling of rate rises.
Copper and Iron Ore prices drop, Iron ore price fell on Thursday after China reported a drop in the country’s steel production in August. The price of the commodity dropped by 7%.
China’s production was in excess of 83 million tonnes of crude steel in August, a 13% drop from the same period a year ago which is the lowest recorded level since March 2020. China’s efforts to cut emissions is the leading cause in the drop.
The price of copper is another commodity that felt a price drop as China has decided to release copper, aluminium and zinc from its state reserves, in an effort to overcome the gap between supply and demand.
China, being the world’s number one metal’s consumer had released 420,000 tonnes of the metals so far this year through batches where the public could bid on prices that sat slightly lower than the market value.
Copper was trading around $9,438 per tonne on Thursday.
The market now awaits the expected tapering of stimulus in next week’s US Federal Reserve meeting.
Zambian government to restore sanity, Zambia’s newly appointed mines minister, Paul Kabuswe, said on Tuesday that government will ensure that there is stability and predictability in the mining sector as well as calming any fears of mining royalties being increased.
Zambia, being Africa’s second-largest copper producer, which defaulted on its sovereign debt last year, has benefited from an increase in copper prices to record highs.
Zambia’s policy on Mopani Copper Mines KCM, two critical operations will be overseen by new President Mr. Hichilema. Zambia took on $1.5 billion in debt to buy Mopani from Glencore in January this year and they are still seeking a new investor for it. The previous administration was looking for an investor to fund the mine’s expansion, which they are hoping would boost output from 34,000 tonnes of copper a year to 150,000 tonnes.
President Hichilema’s market-friendly stance will hopefully attract new investment into Zambia’s mining sector which in turn will help boost the country’s copper production at a favourable time whilst copper nears record-highs.
Zimbabwe seeking investors, Zimbabwe will seek to raise $200 million in a debut domestic U.S. dollar bond sale on its stock exchange in Victoria Falls that trades exclusively in foreign currency, according to Finance Minister Mthuli Ncube.
Earlier this month, Bloomberg reported that the bond sale would be for $100 million. In August, Ncube said a debt offering could help meet the cost of a $3.5 billion compensation bill the country is facing after it reached an agreement with White farmers evicted from their land two decades ago.
The so-called “Zimbabwe Global Investor Roadshow” has seen Ncube travel to South Africa and Dubai to court foreign investment. In New York, Ncube will also meet with officials from the International Monetary Fund and the World Bank, ahead of an IMF visit to Zimbabwe that’s expected next month.
Zim looking for additional power to ease 12-hour cuts, Zimbabwe is looking to Mozambique and Zambia to supply it with more electricity as it tries to fill a power shortfall that’s led to 12 hour power cuts.
Government is currently in discussion with Mozambique trying to secure an additional 180 megawatts from their newly commissioned power plants as well as attaining an extra 100 megawatts from Zambia.
The current electricity cuts are due to rehabilitation work at the Kariba South hydropower plant, constraints at its coal-fired Hwange plant as well as limited power imports, according to the Zimbabwe Electricity Supply Authority.
On a lighter note; a Zimbabwean artist has brought new life to obsolete Mugabe-era banknotes and turned them into striking paintings. A 100 trillion Zimbabwe dollar has finally found value thanks to the artistic talent of Prudence Chimutuwah. Prudence explained that she wants people to heal from the damage caused during the days of hyper-inflation and see the bank notes in a new joyful light! Her figures are mainly painted in blue, which she described as “a symbol of strength and dominance”.
Happy weekend ahead!
Upcoming Public Holidays:
24th September 2021 – Heritage Day (RSA)
“Life is like riding a bicycle. To keep your balance, you must keep moving.”
Bulls are on the rampage, in the aluminium market! The Shanghai Futures Exchange contract paved the way and rocketed to a 13 year high on Monday.
The London Metal Exchange followed shortly thereafter hitting its own 10 year high of $2726.50 per tonne on Tuesday.
The driver of the rally stems in China’s own supply chain problems with energy restrictions thereby reducing smelter output. Shanghai exchange inventory has fallen from more than 392,000 tonnes in April to a current 248,926 tonnes and the world’s largest producer continues to absorb aluminium from the rest of the world. China imported 1.06 million tonnes of primary metal last year and another 744,000 tonnes in the first half of 2021 and there are no signs that anything is slower down anytime soon!
The copper price has fallen slightly on the back of slower factory activity in China but the outlook into next year sees the price remain in the $9,000 average.
Iron ore prices plunged due to production curbs in China on Wednesday and the expectation is for further price drops for the remainder of the year. Baoshan Iron and Steel Company, one of the largest listed producers in China predicts further decreases this year.
International supply constraints remain, the end of the current “norm” seems to be but a dream, with constant uncertainty surrounding pricing and delivery; projects, quotes and contracts are being heavily affected.
Supply of material remains inconsistent with delivery times often pushed out on a weekly basis, mill-rollings are frequently being pushed back by at least 3 months.
Steel prices are somewhat levelling out however HDPE and rubber prices are on the rise with back-to-back increases, the international petrol price is a big contributor as the price of fuel affects the raw material directly whilst some force majeure conditions and material allocations remain in place as well, resin producers have implemented increases for the last two months with some already nominating for a further increase at the end of September.
Resin production has returned for the most part, and can even be considered robust, however, after fulfilling contracts, producers are holding back resin to rebuild inventories, leaving little resin available for spot sales.
Numsa begins demonstrations, The National Union of Metalworkers of South Africa has started with nationwide demonstrations, while wage negotiations with the Steel and Engineering Industries Federation of Southern Africa are ongoing.
It is noted that the nationwide demonstrations, so far, are peaceful demonstrations and not picketing which may only be embarked on in support of a protected strike or in opposition to a lock-out, but neither parties have served strike or lock-out notices on the other.
Negotiations are ongoing after Seifsa’s wage offer in July was accepted by other trade unions but Numsa shortly after declared a deadlock with the federation.
Border updates, it has been over a week since cargo processing issues at the Beitbridge Border Post resulted in truck queues stretching south for kilometres, the situation seems nowhere near being resolved.
Drivers have been advised to stock up on supplies such as food and water in Musina as the queue was at least 11 kilometres long and going nowhere slowly.
It is said that dawn-to-dusk operating hours by clearing agents north of the border had resulted in delays south of Beitbridge, adding to the backlog were Zimbabwean drivers who are allowed three days to transit through their country compared to counterparts from neighbouring states who aren’t.
The dawn-to-dusk and transit time issues are relatively new, a third obstacle at Beitbridge has been in the mix for years, a weighbridge for northbound traffic that’s situated on the other side of the N1 where trucks going north have to cross over into the oncoming lane for this inspection, geographical and space constraints are the reason behind this procedure which makes matters worse, at the Vehicle Inspection Department on the Zim side, all northbound trucks have to be weighed again, causing traffic to back up over the bridge and blocking the movement of traffic going into the truck park immediately south of the Limpopo River crossing.
In addition, construction work north of the border is constraining facilities, impacting on the manoeuvrability of truck traffic.
The Kazungula One-stop Border Post bridge across the Zambezi River is not yet operating at the desired speed expected of a modern multimodal transit.
More than three months after the opening of the bridge, the streamlining system that is in place is still reporting processing times in excess of 30 hours, given existing cross-border challenges, such as unaligned Covid-testing measures delaying truckers at various transits, transporters were hoping that teething issues at Kazungula would soon be sorted out and that hopes of a true one stop border post could be in place.
Keep expectations low on cargo delivery, latest maritime consultancy findings are showing that carriers are no less reliable, but they’re also no better.
The Global Liner Performance report, which includes figures up to and including July, reveals that reliability has been hovering around 35%-40% for most of the year.
In July it dropped by -3.8 percentage points month-on-month, on a year-on-year level it was down a massive -39.7 percentage points. The average delay for late vessel arrivals continued to deteriorate. The level of delays this year has been the highest across each month compared to previous years.
Maersk Line was the most reliable carrier in July (47.3%) followed by Hamburg Süd, the only other carrier with a figure higher than 40% whilst Evergreen was the least reliable, coming in at 16.2%.
None of the carriers recorded a month-on-month improvement.
Fuel hike again, despite expectations of a price drop, the price of unleaded and lead-replacement petrol increased by 4 cents per litre this past Wednesday.
However, diesel prices will go down by 15 cents per litre for 0.05% sulphur and 14 cents per litre for 0.005% sulphur.
There is also the implementation of a slate levy, with an increase of 8 cents per litre implemented in the price structures of petrol and diesel. The slate levy is a mechanism implemented to finance under-recovery by the South African petroleum industry.
Whilst there is a slight relief in a diesel decrease, the effects will be null and void coming of the back of the huge increase last month, freight has been directly affected as running costs have increased as well as the petrol price increases directly affecting Rubber and PVC prices.
Zimbabwe to use IMF aid to boost currency, Zimbabwe will use more than half of the $961 million allocated by IMF in the form of special drawing rights to support its struggling currency.
The government abandoned a 1:1 ratio between a precursor of the reintroduced Zimbabwe dollar and the U.S. dollar in February 2019. The currency now trades at 85.82 to the U.S. dollar and even lower on the black market.
The IMF injected a record $650 billion of reserve assets to build confidence and stability in the global economy in the wake of the devastation caused by the pandemic. The reserves are allocated to all fund members, with an estimated 70% going to the Group of 20 largest economies and just 3% to low-income nations.
Zimbabwe won’t use any of its reserves to pay towards the $8 billion in external debt it owes, even though its arrears have effectively blocked it from borrowing more money from multilateral lenders.
Hippo Valley Estates, is planning a US$40 million cane development project and has already cleared half of the 4-000 hectares designated land secured for the project. It is a partnership between Government and local banks and the hope is to boost the current sugar output of 400 000 tonnes per year significantly.
Zambia plans to reboot economy, after years of mismanagement and defaulting on international debt loans, Zambia is looking at turning its finances and fortunes around following the inauguration of a new president Hakainde Hichilema on August 24.
One of the first major steps by the newly elected president, was the appointment of fellow economist Situmbeka Musokotwane as the new cabinet’s minister of finance.
Sworn in on Friday last week, Musokotwane, in much the same vein as President Hichilema, got right down to business by announcing that copper production would be a primary objective of the new government as it strives to double the production of the raw metal by 2026 and if successful, will see Zambia’s copper output increase to two million metric tonnes in five years’ time.
The precious metal accounts for roughly 70% of Zambia’s revenue from export earnings however under former president Edgar Lungu, a wedge was driven between the previous government’s relations with the mining industry, causing exports to dwindle while government debt ballooned due to unchecked infrastructural expansion projects. It was reported on BBC news 1st September that President Hichilema is horrified at the empty treasury he has inherited and was quoted as saying the hole is much bigger than expected but remains determined to change things around and create a corrupt free and freshly energized country.
The immediate changes by Hichilema resulted in the kwacha and government bonds surging to record highs as the international business community had a more positive outlook on Zambia.
The best way to dig Zambia out of its debt hole was to fill it with copper, said Musokotwane.
Mozambique’s Cabo Delgado returns to normal, over a thousand people in Mozambique’s Cabo Delgado region who had been displaced by insurgency, have successfully returned to their homes. Local refugees have been moved from the Quitunda camp and are now back in Palma to rebuild their lives.
The insurgents operated from the north in a town called Mfundi which had a gas plant, Rwandan forces moved to Palma and went on to Quitunga until they captured the stronghold, Mocimbia de Praia, which was the main city where operations were being planned by IS.
Once the Rwandan forces had secured the central and northern axis of the insurgent operations, they began reclaiming the villages in the joint operation with Mozambican troops.
Focus now is on moving people out of the displacement camps back into their homes.
A Defence Force spokesperson says it’s still too early to tell when they will be able to pull out of Mozambique because while there have been small victories, the instability persists in other parts of the region.
Spring is in the air! We would like to wish all our customers a happy spring day for earlier this week!
“It is spring again. The Earth is like a child that knows poems”
Zambia elects a new president, President Elect Mr Hichilema defeated main rival President Edgar Lungu, by almost a million votes.
This was President Elect Mr Hichilema’s sixth attempt at winning the presidency and his official inauguration is on Tuesday 24th August at National Heroes Stadium.
H.H. has already refused the expensive Lexus presidential vehicle and continues to drive around in his Nissan Infinite living his message to the people of Zambia, that all Zambians matter and the presidency is not about self-glorification; it is to serve and make Zambians proud again! Already he has met with the Director Generals of the Financial Intelligence Centre, Anti-Corruption Commission and Drug Enforcement Commission to ensure Zambia moves in the right direction free of political interference, corruption and with proper accountability.
Our congratulations go out to all people of Zambia for demonstrating the power of true democracy and we look forward to witnessing a very positive term in office for HH that will bring upliftment, prosperity and pride to all Zambians.
Zambian Copper producers standing by to start expansion projects worth $2 billion once industry has reached an agreement with HH on royalties which has been on hold since 2019 when tax changes were implemented. Specifically mining royalty taxes were increased to 5.5-10% from 4-6% and was not deductible from Corporate Income Tax.
NUMSA picketing “premature” The National Union of Metalworkers of South Africa has served notice that it intends to start picketing following failed wage negotiations with the Steel and Engineering Industries Federation of Southern Africa (SEIFSA).
The federation says it views this notice as “premature” in that picketing may only be embarked on in support of a protected strike or in opposition to a lock-out.
To date, SEIFSA reports, neither party or parties have served strike and/or lock-out action on the other and negotiations aimed at breaking the deadlock are ongoing.
The federation advisedthat it is has various meetings with all the trade unions this week and next week, under the supervision of the Bargaining Council.
SEIFSA first made a wage offer at the Bargaining Council late last month, during which other unions indicated a willingness to accept the offer. The federation suggested that workers receive a 4.4% increase this year, a consumer price inflation plus 0.5% increase in 2022 and a 1% increase in 2023.
SEIFSA says centralised collective bargaining is more necessary than ever before to ensure the survival and recovery of the industry.
NUMSA believes the special phase-in dispensation, which introduces a new entry rate ranging between R20 and R29 an hour, will allow employers who have not been paying the minimum rate of R49 an hour to continue doing so for 15 years.
We wait to see the outcome of these talks and can only hope that all parties come to an agreement as the industry and the country itself cannot afford such a catastrophic event.
Border updates, The Democratic Republic of Congo has doubled back on proposed legislation designed to prevent foreign-registered transporters from carrying DRC minerals out of the country.
A declaration signed on July 29 by the minister of transport and ways of communication announced plans to restrict the carriage of export minerals solely to vehicles registered in the DRC which was due to come into force on the day.
However, in an about-turn, DRC President Félix Tshisekedi has asked the minister to revisit the legislation in light of its anti-competitive nature.
While investigations are under way, the legislation is not going ahead and will most likely be overturned, currently foreign transporters can still pick up loads.
These include the provisions of the COMESA treaty, which calls for the promotion of competition, the elimination of measures that stand in the way of the free movement of people and goods and the reduction of non-physical barriers, particularly legal and regulatory ones.
Transnet recovery on track, Transnet Port Terminals’ recovery plan is making good progress after the cyberattack last month that paralysed its Navis cargo processing system, bringing the utility’s ports and railways network to a complete standstill.
Customer interfaces had largely returned to normal.
Looking into the recovery status from port to port, the Durban Container Terminals, Pier 1 and Pier 2, where the import volume pressure was most evident, had done well despite much time being lost due to weather delays this past week.
The terminals are still being impacted by delays in evacuation of imports. The terminals are feeling this congestion on the landside which is now creating delays on the waterside. Currently, as at August 16, Pier 1 had two vessels at anchorage awaiting a berth. Pier 2 had six vessels, with an average berthing delay of four days.
Cape Town port appears that recovery has been decidedly better. Transnet Port Terminal said that Cape Town Container Terminal had minimal delays, and a balanced yard.
The ports of Ngqura and Port Gqeberha are also recovering well.
Copper Price Bounces Back, the price of copper bounced back last week as worries about supplies from top producer Chile gathered pace.
BHP and the workers union at its Escondida copper mine said last week that they would extend government-mediated contract talks by a day in a last-ditch effort to stave off a strike. The world’s biggest copper mine accounts for about 4.5% of global copper supplies estimated at roughly 24 million tonnes this year.
Copper for delivery in September rose 1.9% from last weeks’ settlement price, touching $9,618 per tonne.
Meanwhile, concerns about Chinese demand and a firmer dollar tempered optimism for higher prices.
China’s January-to-July copper import volumes dropped by more than a tenth compared with the first seven months of 2020.
The biggest copper buyer in the world bought 3.219 million tonnes of copper from January to July, down 10.6% compared with the same period in 2020.
US legislation to regulate carriers shot down, The World Shipping Council has come out strongly against proposed US legislation designed to tighten regulation of carriers in order to address supply chain congestion resulting from record US consumer and business import demand, coupled with disruptions resulting from the Covid-19 pandemic.
A framework has been shared which the WSC believes is flawed, particularly the suggestion that ocean carriers are solely responsible for the current supply chain congestion.
The congestion is widespread, with every link in the supply chain being affected, from marine terminals to truckers, rail cars and warehouses are all under tremendous strain.
The WSC points out that what is “crystal clear” is that regulating only ocean carriers, or any other single class of supply chain provider is doomed to fail.
The bill would require ocean carriers, under the threat of penalty, to guarantee the performance of other parties over whom they have no control, for instance by putting the burden on ocean carriers to ensure chassis, trucks and rail cars are available from third party providers.
The WSC has accused the government of tilting the market in favour of shippers in commercial disputes.
The organisation further warns that the legislation, if enacted, would incentivise trade partners to enact similar protective legislative and regulatory frameworks in their countries.
Steel prices in USA have risen 215% since March 2020 which in turn has destroyed many American jobs and negatively impacting many industries. The increase to the import duty to 25% in 2018 implemented by Trump has been kept in place by the current Biden government and continues to cause no end of grief to industry at large.
USA Air Cargo screening continues to be a challenge for some packaging and products that is deemed unairworthy unless it can pass through security screening. The thought is that further down the line manufacturers can be accredited in some way and certify in other ways yet to be identified.
China’s port shutdown sparks worldwide fear, The Port of Los Angeles, which saw its volumes dip because of a June Covid outbreak at the Yantian port in China, is bracing for another potential decline because of the latest shutdown at the Ningbo-Zhoushan port in China, many companies chartering ships are already adding covid contract clauses as insurance, so they won’t have to pay for stranded ships.
The shutdown at Ningbo-Zhoushan is raising fears that ports around the world will soon face the same kind of outbreaks and Covid restrictions that slowed the flows of everything from perishable food to electronics last year as the pandemic took hold. Infections are threatening to spread at docks just as the world’s shipping system is already struggling to handle unprecedented demand with economies reopening and manufacturing picking up.
The port is actively negotiating with shipping companies, directing them to other terminals, and releasing information on a real-time data platform, it said. To minimize the impact, it’s also adjusting the operating time of other terminals to make sure clients can clear their shipment.
Rwanda to continue aiding Mozambique in fight against terrorism, earlier this week, the government of Rwanda indicated that it would continue to collaborate with the government of Mozambique as well as other partners in the next phases of stabilisation and development after Rwandan and Mozambican troops recently repulsed insurgents from key areas of the Cabo Delgado Province.
Joint forces captured Mocimboa da Praia earlier this month, a key Mozambican port city that had been the headquarters of the Islamic State-linked terrorist group in Cabo Delgado Province since 2015.
This strategic port city for Mozambique had been an important logistics point for the insurgents in addition to being the terrorists’ stronghold in the province.
After the insurgents’ main stronghold was captured, more than 90% of the province is now free where operations to wipe out the terrorists are now focused on smaller pocket areas.
“Smooth seas have never made skilled sailors”
No increase for July! as the steel sector waited in anticipation, no news is good news as no price increase notices were released for the month of July from the various mills within South Africa, however international steel prices still remain volatile.
This will be only the second time this year that steel prices should remain unchanged barring any other factors such as labour increases or production costs.
South Africa in the midst of the third wave, the COVID-19 pandemic has begun running riot in South Africa with cases sky rocketing. Gauteng is now currently the epicentre of the virus.
Last week President Cyril Ramaphosa placed South Africa under alert Level 3 lockdown but with the cases increasing daily there are talks being held this week that the country could move into a higher level and Gauteng itself being placed into a further lockdown beyond that of the national lockdown.
Border updates, Beitbridge border post faced a water shortage earlier this week causing some delays as the work force at the border was reduced to 50%.
However, the issue was resolved and its all systems go at the border post.
According to personnel at the border, the closure was scheduled to last for 12 hours, from dusk till dawn, starting at 6pm on Monday evening and ending at 6am the following morning but the closure lasted for 24 hours.
There were reports last week that Kasumbalesa experienced delays.
The decision by the government in Kinshasa to test cross-border truck drivers in the Democratic Republic of the Congo itself, rather than risk fraudulent PCR test results for Covid-19, resulting in a queue south of its Copperbelt border crossing in the region of nine kilometres towards Chililabombwe.
Late last week Friday DRC officials called off the decision after irate drivers started refusing to cross into DRC at its busy Kasumbalesa border.
Authorities in Kinshasa initially appeared resistant to persuasion, saying that they had recorded a significant case load of fraudulent PCR tests and that they did not have the means to verify results.
However, the Zambian government’s appeal on behalf of transporters resulted in the DRC finally deciding to accept PCR results from other countries and to roll out rapid testing free of charge in the event of drivers arriving at its border without test results.
Sea carriers looking to add additional vessels, two major shipping lines, one focusing entirely on intra-Asian cargo, have collectively ordered four new vessels to be commissioned in 2023/24, supporting the view that ocean freight is on a juggernaut growth path with no slowing in sight.
The news comes amid growing criticism among agents that carriers, the majority of whom are seeing profits well above 50% while freight rates have spiked by as much as 350%, are not investing in enough newbuilds to address the imbalance between cargo demand and service supply.
In certain instances, criticism from the freight forwarding fraternity has been downright antagonistic, with some agents accusing lines of manipulating vessel calling shortfalls to increase rates on the back of capacity problems.
However, the newbuild order book expansion by Evergreen and intra-Asian carrier SITC serves to suggest the opposite, that lines are indeed beginning to look at rebalancing service vs demand.
Zimbabwe loses a third of its gold to Smugglers, Zimbabwe last year lost around a third of its average gold production to the black market.
The smuggling of gold, Zimbabwe’s top foreign currency earner, is estimated to cost the country $1.5 billion in lost revenue per year, according to the international Crisis Group.
Most of the precious metal is siphoned off by informal small-scale miners who sell their findings to illicit gold traders rather than government-appointed officials.
Fidelity Printers and Refiners on Tuesday announced the country had lost around 11 tons of gold to “leakages” in 2020.
The losses were mainly due to payment delays caused by foreign currency shortages that encouraged miners to sell to smugglers instead, FPR’s head of gold operations, Mehluleli Dube, told a parliamentary mining committee.
Gold miners are usually paid in US dollars, a much more stable and desirable currency than the ever-depreciating Zimbabwean dollar. They were legally obliged to sell 40% of their earnings to the central bank at the official exchange rate but that obligation has been reduced to 20% in an attempt to lure miners to bring gold to Fidelity Printers.
Zimbabwe’s official gold production dropped from a record 33.2 tons in 2018 to 19 tons last year mainly due to fewer deliveries from scall-scale miners. It is noted that small scale miners only sold 9.35 tons of gold to formal buyers last year, compared to 17.48 tons in 2019.
Copper prices climb again, the price of copper regained ground on Monday after hitting a two-month low on Friday. Copper for July delivery was up 0.6% from Friday’s settlement price, reaching $9,196 per tonne midday on Monday in the New York Comex market.
China’s copper exports rose for a third consecutive month in May to reach their highest level since March of last year, customs data showed on Friday, as rising international prices encouraged traders to ship metal abroad.
However, last month’s surge in copper prices on the London Metal Exchange to an all-time high not only made imports less favorable for China, but also spurred shipments in the other direction.
Exports of raw copper and copper products amounted to 79,044 tonnes last month, up 3.4 percent from April and 67.7 percent year-on-year.
SADC leaders to send troops to Moz, Southern African leaders on Wednesday approved the deployment of the Southern African Development Community (SADC) Standby Force to Mozambique.
It is a move that demonstrated regional progress in addressing the crisis.
The deployment was approved at an extraordinary summit, held in Maputo, and attended by all 16 member states, including President Cyril Ramaphosa.
South Africa has repeatedly expressed the need for greater intervention in the region, even as Mozambique seemed resistant.
The deployment followed two extraordinary summits held earlier this year could bring some finality to the back-and-forth deliberations on how to respond to the growing regional crisis.
The SADC Standby Force acts as the region’s peacekeeping force and falls under the SADC’s Organ of Politics Defence and Security.
It is constituted when necessary, and the crisis it is responding to will determine the size of the force.
Upcoming Public Holidays:
30th June 2021 – Independence Day (DRC)
5th July 2021 – Heroes Day (Zambia)
6th July 2021 – Unity Day (Zambia)
“By crawling a child learns to stand”
As expected, a big hit to the steel sector, following on from our previous publication, it was expected that there would be a steel increase for the month of June and unfortunately the news broke last week Friday as ArcelorMittal announced another increase with prices increasing across the board in the region of 8%-10% on base product.
This, once again, is another blow to the sector and downstream players with contracts and projects continuously being re-looked at as well as critical stock levels affecting delivery times.
Following extracted from an article published by CNN 19/05/2021
China and the United States are in a race for scarce commodities to rebuild their economies after the pandemic. That’s pushing prices through the roof — and is now threatening to throw Beijing’s recovery plans off course.
The cost of everything needed for China’s post-pandemic infrastructure boom, from steel and coal to glass and cement, is soaring. The price of rebar, a type of steel used to reinforce concrete, recently hit 6,200 yuan ($965) per metric ton in Shanghai, up 40% this year, and a new record high. Iron ore, which is used to make steel, has topped 1,240 yuan per metric ton ($194) on the Dalian Futures Exchange, a 25% increase since the start of the year.
Thermal coal, glass and aluminum are hitting all-time highs in China. The price of plasterboard is rising too. The situation with steel has become so acute that China’s leaders are warning of damage to the economy. And a popular idiom for defenseless — “without an inch of steel in hand” — is now being used much more literally on social media to describe desperate buyers.
China was the only major economy to dodge a recession last year when the pandemic hit, but it launched a $500 billion infrastructure-led plan to support its recovery from the slowest rate of growth in decades.
Construction is also part of the economic recovery in the United States and may accelerate soon. President Joe Biden proposed in March a roughly $2 trillion infrastructure plan aimed at helping the nation recover from the coronavirus pandemic, and reshaping the US economy to counter China’s rise.
“Small businesses are facing even tighter cash flows, because they have less negotiation power when prices increase in their upstream sector,” wrote Luo Zhiheng, chief macro analyst for Guangzhou-based Yuekai Securities. “They either have to accept higher production costs, or cut their production and sit on the sidelines.”
Recovery efforts hit a snag
The spike in steel and iron ore prices comes down to a combination of factors. Along with construction, electric vehicle production is also fueling the rise, according to analysts at Fitch Ratings. Cars need high-strength steel that can reduce weight and improve performance, and production of electric, hybrid and fuel cell cars have been skyrocketing.
China’s efforts to reduce carbon emissions has also caused steel supply to tighten, the analysts wrote in a report this week. China produced more than half of the world’s output of steel last year, and Beijing has been pressuring the industry to reduce output in pursuit of its goal to become carbon neutral by 2060.
A bruising trade battle between China and Australia may also be inflating prices. Beijing has put up barriers to entry on several Australian exports over the last year, including coal. While one of Canberra’s most important exports, iron ore, has been spared, Beijing has been looking for ways to reduce its reliance on the country.
There are already some signs that the price hikes are hitting China’s construction sites and factories, according to Wang Jiechao, chief construction sector analyst for Pacific Securities. He wrote in a Monday report that many construction companies, foundries and small household appliance manufacturers have stopped taking orders because of production losses.
“The rapid increase in commodity prices has seriously eroded the profitability of downstream manufacturing companies,” Wang added.
A recent survey of 460 construction companies nationwide revealed that many firms are feeling the pinch. Some 56% of respondents to the survey — conducted by 100njz.com, a Chinese construction industry data provider — said that the price hikes have affected their work schedules to varying degrees. Among them, 30% said they have suspended construction to control costs, while the rest have slowed projects down.
Meanwhile, 44% of the respondents to that survey said that although they are still moving ahead with construction as planned, they have had to reduce their steel purchases, which could lead them to consider suspending work in the future.
It’s also bad news for employment, according to Luo of Yuekai Securities, who noted that small businesses are struggling with the price hikes and also account for 80% of the country’s urban jobs.
Luo pointed out that April’s unemployment rate for young people aged 16 to 24 remained high at nearly 14% and their working hours decreased, “possibly because small businesses were running below capacity under the pressure of rising costs.”
Prices are rising everywhere you look
China is still exporting a lot steel, but the government is starting to discourage that in a bid to shore up supply at home. Authorities announced in April that starting this month, they would end export tax rebates for most of the steel products. Customs officials have also cut import tariffs for some steel.
Local governments, meanwhile, have opted for harsh measures in a bid to keep prices down. Late last week, regulators in Shanghai and the steelmaking hub Tangshan summoned major steel mills and ordered them to fix their prices “at reasonable levels.” Mills could face “severe punishments” if they collude to drive up steel prices, according to government statements.
Major futures exchanges in Shanghai, Dalian, and Zhengzhou have also tightened trading rules for steel or coal contracts, and have raised trading fees to cool down the market. Three top coal index compilers even stopped publishing daily updates. The move was to “stabilize market prices,” the state-backed China Coal Transportation and Distribution Association, one of the index compilers, said last week.
Still, prices for the metals remain elevated. And some analysts have pointed out that it will be tough for China to reign in commodity prices without compromising elsewhere.
Certain areas within South Africa are again plunging into total darkness without any prior notice from Eskom as the embattled state power supplier continues to struggle to keep the lights on across the nation which in turn affects all industries within the country, adding further costs to production as producers look to other means of power supply.
South Africa’s manufacturing surges, by 3.4% month-on-month according to data received for March.
The above-average output lifted the volume index to 99.6, a level last seen in January 2020. Last year the index had dropped to 54 by April, the lowest level it had been on record.
In comparison, by March this year, the level of production was up by 4.6% year-on-year.
It is noted that the annual recovery was driven by the manufacturing of food and beverages, as well as motor vehicles and parts.
Border updates, and the recently opened One Stop Border Post at the Kazungula Bridge between Zambia and Botswana has already resulted in a significant reduction in the time it takes hauliers to use the once-treacherous Zambezi River crossing.
Delays, especially during last year’s coronavirus outbreak which caused mass disruptions on either side of the river, were further exacerbated by heavy rains earlier this year, with at least, on average one if not two of the three pontoons frequently being out of order, the rush to make up for lost time often resulted in trucks slipping off the ageing ferries.
However, this seems to be a thing of the past now as transit times have gone from an average 40 hours in April to 22 hours since the bridge opened on May 10, operations are going smoothly with minimal teething issues.
Transporters can now rejoice as one of the region’s most notorious border crossings has been wholly transformed.
No further delays or updates have been reported at Beitbridge or Kasumbalesa.
Protests claim a life, and the South African Police Service has confirmed that a driver burned to death in his cab last night on the outskirts of Harrismith after protesters threw stones at his truck on the N5 highway.
Protests over service delivery flared up earlier in the week along the N5 and N3 highways, major pass throughs between Durban and Johannesburg.
Whilst the police have been monitoring the stretch of road during the week, unfortunately the loss of life occurred.
Record copper price not all good for Zambian miners, and copper mining companies in Zambia are at odds with the record prices of copper, which have brought them significantly higher royalty bills than previously under the country’s current tax regime.
Zambia uses a sliding scale to determine its mining royalty rate for copper, linked to the international copper price. The scale is adjusted in that royalties are paid at higher levels as the commodity price climbs and is reduced as prices fall.
Starting at the minimum threshold of 5.5% when the copper price is less than $4,500/mt, rising to 10% when the copper price is $9,000/mt or higher. Which in turn means that copper mining companies are currently paying the maximum threshold for mining royalties.
Since 2019, when the new Zambian mining tax regime came into effect, mineral royalty payments have not been treated as a deductible expense when calculating corporate income tax. Income is taxed at the rate of 30% a year for base and industrial minerals miners. The effect of this is that mining companies are paying “double tax” as the companies are taxed on income that has already been paid over as a royalty.
Zambia is highly dependent on mining as its major productive industry, with the sector contributing 10% to the country’s GDP in 2019. Zambia’s mining sector accounted for 28% of the government’s revenues and 77% of export earnings, with copper accounting for over 90% of the sector’s exports.
In 2020, large scale copper mining companies recorded an increase in total copper production of 9.7% year on year.
Kamoa-Kakula starts production ahead of schedule, the joint venture between Ivanhoe Mines and Zijin Mining has achieved production several months ahead of schedule.
Whilst the company has described this feat as a “historic achievement” President of DRC, Felix Tshisekedi has said that the country is open for business and investment.
Although this exploration journey started well over two decades ago, it is also noteworthy that the Kakula deposit itself was discovered just over five years ago, which is remarkable progress by the mining industry.
In April, the Kakula mine mined 357,000 tonnes of ore grading 5.70% copper including 121,000 tonnes grading 8.40% copper from the mine’s high-grade centre.
Kakula is anticipated to be the highest-grade major copper mine in the world with an initial mining rate of 3.8-million tonnes a year, with an expected climb to 7.6-million tonnes a year in the third quarter of 2022.
Phase 1 is expected to produce 200,000 tonnes a year of copper and phases 1 and 2 combined are forecast to produce 400,000 tonnes a year. The current copper price also allows Ivanhoe and Zijin to mull over the acceleration of the Kamoa-Kakula Phase 3 concentrator.
France, the latest nation to aid Mozambique, after meeting with the French president, President Filipe Nyusi of Mozambique has advised that France has shown “complete willingness” to provide whatever is necessary for Mozambique’s fight against terrorism in the northern province of Cabo Delgado.
France has shown support but has left sovereignty in the hands of Mozambicans.
This appears to mean that any French assistance in the fight against Islamist terrorism will take into account the lines of intervention laid down by the Mozambican government.
The two countries must advance quickly to sign the agreements which will define the type of support granted by France.
As reported in the previous publication, the Portuguese government has also stressed its readiness to assist Mozambique in the fight against terrorism.
Some Portuguese troops are already in Mozambique providing the Mozambican defence and security forces with technical assistance and training.
The aim that the Mozambican government is to build up the capacity of the country’s own military than to rather have foreign intervention.
“Rain beats the leopard’s skin but it does not wash out the spots”