Level 1 restrictions eased, on Wednesday night 11th November 2020, South Africa’s president, Cyril Ramaphosa announced the easing of South Africa’s level 1 lockdown, opening the borders up to international travellers as well as allowing alcohol to be sold within the pre-covid trading hours, this is yet another step in slowly opening up the economy and to allow more growth, although opposition parties and leaders have bemoaned the extension of the state of the disaster it seems the people of South Africa as a whole are feeling more positive.
Border updates, the Beitbridge saga continued since the last report, however as of yesterday it is noted that congestion has eased significantly, with compliments pouring in from the transport industry about the SA Revenue Service’s decision to discontinue issuing CN2 gate passes at Beitbridge, an intervention that now appears to have completely decongested northbound transits. There is however a slight delay on the Zimbabwean side as authorities were overwhelmed with trucks crossing from the SA side but they are dealing with each truck in good time.
This is a breath of fresh air since the 21st of October when the congestion began, reports of crime and violence emerged as well as a driver losing their life.
We hope the new system implemented can keep traffic at a free flow for some time to come.
A joint effort between DRC and Zambian officials have effectively decongested the Copperbelt crossing of Kasumbalesa, that in the past has been known as a notoriously problematic border.
Prior to the Covid-19 lockdown, Kasumbalesa’s fragile workability could result in cargo disruption at any given time. The impact was immediately felt when COVID-19 hit, leading to a northbound cargo queue stretching some 90 kilometres south-east through Chingola towards Kitwe.
Knowing that vast action was needed to clear the border and boost imports and exports into the region which is known for its copper mines, DRC and Zambian authorities got together to combat a troublesome border which resulted in the decongestion in under a week. This just proves once again that when people come together nothing is impossible.
Zimbabwe under pressure to end gold sales, Gold mining investors are pressuring Zimbabwe to change a law forcing producers to sell their output to the central bank, who then part pays them in local currency that is useless outside the country.
Whilst mining investment is key to rebooting Zimbabwe’s collapsing economy, the nation suffers from a shortage of dollars. As the rally in bullion generates more interest in the industry, the government is weighing its options on whether to grant investors gold-trading licenses.
Zimbabwe currently forces gold miners to sell their bullion to Fidelity Printers and Refiners Ltd. It pays them 70% in dollars and the remainder in local currency.
Bravura enters the frame; Nigerian owned Bravura Holdings has $1 billion available for the development of a platinum mine in Zimbabwe.
The 3,000-hectare concession where it plans to dig the mine is in Selous, 80 Kms south of Zimbabwe’s capital Harare which is close to existing platinum mines.
Bravura is one of a number of companies that have secured platinum concessions in Zimbabwe as the government seeks to kick start its stagnant economy. Still, established platinum miners haven’t announced plans to expand their operations.
While Zimbabwe has the world’s third-largest platinum group metal reserves, investors have been deterred by frequent changes to mining laws and currency policies.
Rare diamonds have been discovered in Matabeleland South and Masvingo provinces, the findings come after Alrosa, a Russian mining firm had done extensive exploration at the Malipati Diamond Project and say these findings have the potential to change the face of Zimbabwe’s gem industry.
In collaboration with state-owned diamond miners ZCDC, Alrosa has come to this discovery on finding this “Type II” diamond. Type ll diamonds have no nitrogen in their composition and come with a much higher price tag to them.
Rushinga District in Mashonaland Central province there is a potential new Chinese investor looking at the exploration of iron deposits.
The investor, who already has steel smelters in China’s city of Handani are under pressure to curb pollution, has already partnered local investors with plans underway to develop mines and build smelters, this is, however, subject to an in-depth exploration to confirm commercial quantities and quality of the resource. There is evidence of the existence of iron deposits in mountain ranges of Mavhuradonha, which stretches into Mozambique.
The project has been in the pipeline for the past 18 months, but was delayed due to global pandemic, supply chains disruptions and travel restrictions.
The investor had plans to commence production in 2023.
A special tasks force within the Ministry of Mines and Mining Development, has been formed to oversee the implementation of the project.
Zimbabwe Iron and Steel Company is Zimbabwe’s only integrated steel firm, however operations stopped in 2008 due to lack of capital and poor management. The company had capacity to produce up to one million tonnes annually, the company was among Zimbabwe’s major foreign currency earners.
Kakula tunnels successfully connected, Kakula mine in Kolwezi, DRC which is being developed in the eastern part of the Kakula deposit has reached a major milestone as the Northern and Southern tunnels have now been successfully connected.
Kakula is the first of many underground copper mines to be developed in the 400sq km region, the average grade of copper is said to exceed 8%.
The Kakula Mine is expected to have a mine life of approximately 21 years, whilst Kakula West which is Kamoa-Kakula’s third underground mine to be developed has a projected mine life of approximately 16 years.
The underground development on the south decline was performed by the mining crew of JMMC who are the DRC subsidiary of leading Chinese mining contractor JCHX, the northern decline was performed by Kamoa Copper’s mining crews.
Further developments are planned to commence mid next year where a set of connection drives is expected to hole by June 2021 which will open up an additional high-grade and medium-grade mining block and phase 1 copper concentrate production from the Kakula Mine is scheduled to begin in July 2021.
Earlier in the month Nanjing Hanrui Cobalt Co Ltd, advised that they expect to start their cobalt production line in the DRC Later this month, moving into December.
The 5,000-tonnes-per-year production line in Kolwezi, DRC, was expected to be running earlier this year but due to the COVID-19 pandemic all operations were placed on hold.
The firm was still discussing sales contracts with foreign traders and domestic users.
Terrorising of Mozambique continues! More than 50 people were killed in a terrorist attack last Friday in northern Mozambique where insurgents attacked a village.
Up to 2,000 people have been killed and about 430,000 have been left homeless in the conflict in the mainly-Muslim province. The militants are linked to the Islamic State (IS) group, giving it a foothold in southern Africa.
The group exploits poverty-stricken areas and the unemployed and grows their numbers by recruiting the youth in their fight to establish Islamic rule in the area. Many locals complain that they have benefited little from the province’s ruby and gas industries.
Zimbabwe president Emmerson Mnangagwa has recent said that he will be sending troops over to help with the insurgents.
“If you climb up a tree, you must climb down the same tree”
Level 1, last night, President Cyril Ramaphosa announced that as of Monday 21 September South Africa would enter Level 1 of the lockdown, further unlocking the country’s economy and society whilst we await the final decision on the construction and mining sectors possibly returning to 100%; international travel has been allowed to and from countries that are not high risk areas and only a few land borders remain open at this stage although strict criteria will need to be followed.
Border updates, not much has changed at Beitbridge with operating times at 50% of the usual, curfew is still in place however there is speculation that by end of the week big changes will be implemented. Last week news broke that Beitbridge was to go ahead with the COVID-19 testing on every person entering the country as of Monday this week however, there doesn’t seem to be any system in place currently and drivers are not being tested.
Reports are emerging that the Chirundu border post has now implemented the testing of every driver that is entering the country despite no official confirmation of this. Massive delays for trucks going north into Zambia and DRC are however being experienced.
Botswana throws more fuel to the fire, call has gone out for greater regional adherence to guidelines and regulations after it emerged earlier this week that Botswana would still be doing its own testing for the coronavirus, despite the Southern African Development Community (SADC) making it compulsory for truck drivers to cross borders with “Covid-19 certificates” in hand.
Although only laboratories can issue the relevant documents declaring whether or not bearers have tested positive or negative for the virus – a curbing measure that came into effect on Monday morning – a freight representative said Botswana would not take the certificates as legit and would still do its own testing.
For the first time in weeks Kasumbalesa has been running smooth with no problems reported.
Zimbabwe cancels mining concession in national parks, Zimbabwe’s government has announced that mining on areas held by national parks is banned with immediate effect.
In a statement issued last week Tuesday evening after a cabinet meeting, an announcement by Minister of Information Monica Mutsvangwa said “Mining on areas held by National Parks is banned with immediate effect, steps are being undertaken to immediately cancel all mining titles held in National Parks.”
This comes after a public outcry and the threat of a court battle after President Emmerson Mnangagwa’s government granted exploratory rights for coal to two Chinese companies in one of the country’s most iconic reserves, Hwange National Park.
The decision has been welcomed by various conservation groups and The Zimbabwe Environmental Law Association.
FQM to expand, Canadian company First Quantum Minerals (FQM) has announced its plans to expand operations at the Kansanshi mine in Zambia.
The Kansanshi Mine is one of the largest copper mines in the world, with two open pits.
The mine began operations in 2005 and has undergone several expansions since then. In a technical report, the Canadian firm said that it plans to expand the sulphide ore processing facility at the Kansanshi mine by 25 million tonnes per annum (Mtpa).
This is expected to boost the mine’s annual throughput to 52Mtpa.
First Quantum expects to spend approximately $650m for the expansion in about two years, starting in the H2-2023.
“Whether You Think You Can Or Think You can’t, You’re Right”
Steel industry facing the gallows, after the recent steel price increases in South Africa the storm continues to batter the already struggling sector, as of 25 August Arcelormittal South Africa declared FORCE MAJEURE at its Newcastle furnace when a blast occurred on the 20th of August, this has resulted in a halt in production and now the steel giants are battling to meet demands, on the back of this their Vanderbijlpark mill is not producing at 100% due to COVID restrictions and there is now concern that the country could soon run out of steel whilst the smaller mills try to accommodate this problem there is an impending steel increase coming first of next month in the region of R1000/Ton.
To add insult to injury on the 13th of August Eskom announced that stage 2 load shedding would come into effect for a short period of time however since then the country has been on an almost constant load shedding schedule and as of this week stage 4 has been introduced which is wrecking further havoc across all industries within the country.
Border updates, operating times at Beitbridge on the Zimbabwean side are still at a 50% capacity and anyone entering any offices at the border are to produce a valid negative COVID-19 test whilst at Groblersbrug and other borders around Botswana, anyone entering into the country is to undergo a COVID test, testing stations have now been setup at the borders with a 24-48 hour turnaround time.
The Trans-Kalahari Corridor Secretariat (TKCS) has announced that it will hold a “Virtual Stakeholder Engagement” this coming Friday in a bid to address the “devastating consequences on the national and regional economies of the Covid-19 pandemic”.
According to the TKCS, the competitive advantage of the region has been seriously compromised, with exports and imports having been seriously affected.
The Secretariat supports its view by quoting from the World Bank’s biannual Pulse Report which states that as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020.
Going north, last week, notice came out that anyone crossing into Zambia from the Chirundu border is to produce a valid COVID test from the country they are entering from, this was supposed to go live on the 2nd of September, however after much confusion and debate it seems to have been called off for now.
Also last week the notoriously problematic border crossing of Kasumbalesa between Zambia’s Copperbelt Province and the province of Haut-Katanga in the south-western Democratic Republic of the Congo was shut down again.
This was reported by Transit Assistance Bureau “Transist”.
A message sent to Transist said: “Demonstrations at Kasumbalesa so no movement of trucks.”
It’s not clear what has sparked the demonstrations but the area has been politically volatile for some time, with violent flare-ups experienced all the way north-east of Kasumbalesa into copper mining areas around Lubumbashi and Kolwezi.
Earlier last month Kasumbalesa was turned into a flashpoint after members of the Union for Democracy and Social Progress (UDSP) went on the rampage following the alleged killing of a colleague.
It is not known whether the UDSP is also responsible for last weeks’ closure.
Airfreight slowly taking off, the easing of the lockdown has gradually seen an increase in the airfreight sector, initially it was seen that the air cargo sector had not returned to levels pre-dating the Covid-19 pandemic, despite the relaxation of lockdown regulations across the globe.
And yet yields dropped by a global average of no more than 2.4% from the last week of June through the first weeks of July (from Asia Pacific and Middle East South Asia by 4% and 3% respectively, World Air Cargo Data (ACD) has found.
However, in its most recent market data assessment the airfreight aggregator also found that weekly volumes were lower by mid-July than two weeks before.
The gradual route to recovery to pre-Covid market conditions continued for the global air cargo industry in August for a fourth-consecutive month, according to fresh volume and yield data from industry analysts CLIVE Data Services and TAC
Zimplats doing well, Platinum giants Zimplats have recorded a net profit of US$261.8 million for the financial year ended June 30 2020, which is an increase of 81% compared to the same period previous year.
The profitability was on the back of an increase in mineral prices, particularly rhodium, palladium, gold and nickel that saw revenues going up from US$631 million to US$868.9 million.
“The groups operations were not affected by the COVID-19 pandemic as all the mines and processing plants continued operating throughout the year with no confirmed cases within the workforce” the company said.
The miner opted not to declare dividend for the period to preserve cash and maintain liquidity in light of the economic uncertainties posed by the COVID-19 pandemic.
Following on from Zimplats’ current success, another major talking point is the revival at Rio Zim, Zimbabwe’s second largest diamond miner, after having to halt their sales in March and the diamond industry coming to a stop over the past 6 months due to COVID-19, the mine has seen a turnaround, after deciding to cut the price of diamonds last week an immediate bounce back can be seen and the demand for the precious gems has come back with a vengeance.
It seems that Zimbabwe as a whole possesses great resilience and bullish like behaviour when things get tough and hopefully this is the beginning of the revitalisation of the great country once known as the “bread-basket” of Africa.
Implats posts record earnings, revenue was 44% higher at R69.9-billion on higher dollar metal prices and a weaker rand, partially offset by lower PGM sales volumes. The higher revenue resulted in the group generating a gross profit of R23.3-billion for the year, a 240% increase on the R6.8-billion of its 2019 financial year.
Future uncertain, the future of Mopani mine in Zambia remains uncertain as majority stake holder, Glencore, who owns 78% of the mine has put the sale of Mopani Copper Mine on the table, after placing the mine into care and maintenance in April earlier this year.
Stay tuned …
“We Generate Fears While We Sit. We Overcome Them By Action”
Too rich for relief, South Africa is facing a public financing crisis, according to the supplementary budget Finance Minister Tito Mboweni presented on Wednesday.
Debt will continue to rise with an expected peak in 2024 with a drop below 80% of gross domestic product by 2028, which is, best case scenario as long as the government sticks to their plan of stabilizing the economy which is predicted to shrink by 7.2%, the worst the country has seen in 90 years.
“Debt is our weakness, even as South Africa responds to the current health and economic crisis, a fiscal reckoning looms. The public finances are dangerously overstretched.” the minister said in his budget speech.
Zambian inflation slows as Zimbabwe’s soars, Zambian inflation slowed for the first time in 15 months in June as
the kwacha pared some earlier losses.
“Consumer prices increased 15.9% from a year earlier, compared to 16.6% in May, costs rose 0.2% in the month.” Mulenga Musepa, the interim statistician general at the Zambia Statistics Agency told reporters Thursday in Lusaka.
Zimbabwe announced on Wednesday that petrol had increased from 28.96 Zimbabwe Dollars per litre to 71.62 Zim Dollars per litre, this is more than a 150% increase. Zimbabwe began weekly foreign currency auctions on Tuesday in a bid to increase efficiency in the allocation of scarce U.S. dollars in the economy.
This adds to the ever-increasing inflation rates, over priced food and scarce medical supplies, the country is enduring its worst financial crisis in over 10 years.
Border delays continue, Transporters headed towards the Trans-Kalahari Corridor (TKC) are being forced to use the Kopfontein-Tlokweng border, this is the result of excessive delays from Covid-19 testing and testing measures being introduced at the Skilpadshek border crossing west of Zeerust. This is affecting Namibia’s main access route to South Africa.
Kasumbalesa’s clearing problems have eased as there was free flowing traffic, considering the Lockdown over the weekend, this is good news.
Elsewhere in the Sub-Saharan region, faster processing of truck traffic has returned to Chirundu, the problematic border crossing between Zimbabwe and Zambia and has resulted in higher volumes of cargo going North which can only be a good thing.
It’s not us, said ATDF chairperson Mr Ngwenya, Mr Ngwenya has said “It’s not us” after questions were raised as to who was behind the July 7 transport threat which is urging hauliers to replace foreign national drivers with local people.
This comes as a surprise considering that the ATDF last week issued a letter on official stationery, bearing the name of Ngwenya and three other officials, giving local trucking companies seven days to “get rid of foreign national drivers”.
“As South African truck drivers we are no longer going to tolerate this nonsense of non-compliance by South African trucking companies. “We demand that all foreigners driving South African trucks be removed and replaced by the South African citizens.” – statement from the letter issued by the ATDF.
Gavin Kelly, chief executive officer of the Road freight Association (RFA), said “groups like the ATDF had a legitimate concern that not all South African transport companies followed the rules and regulations of employment.
Yet they have no right to force operators, including those whose foreign national staff hold permits issued by the Department of Labour, to dismiss people based on nationality or face the consequences”.
“Knowing Is Not Enough; We Must Apply. Wishing Is Not Enough; We Must Do.”
Collapse of mining, COVID-19’s impact on the mining industry locally and abroad has been devastating, Zambia has recorded a drop of 30% in mining revenue between February and April 2020 whilst South Africa suffered a plunge of 50% in mining revenue due to the Hard-Lockdown during April.
One of Zimbabwe’s top gold mines has halted operations blaming the country’s foreign currency policies, which requires the mine to surrender 30% of its forex earnings at a rate of 25 to 1 USD while suppliers are selling at 80 to 1 USD. The mine believes that they are achieving less than 80% of their gold sales compared to the international market.
“The impact of this situation on the Company’s operations has been that the Company is no longer able to meet its operational expenditure requirements considering that the company is required to pay for electricity and fuel in USD along with almost all of its consumables and spares also being denominated in USD,”
“The company has therefore been forced to stop production of bullion due to its inability to buy essential consumables and spares and is actively considering placing all its gold mines under care and maintenance until a viable solution is found.” the mine has said.
Steel Giants Fined, ArcelorMittal Limited South Africa (AMSA) which is Africa’s largest steel producer has been fined R3.6million for exceeding the minimum hydrogen sulphide emission standards. AMSA’s steelworks which is located in the Vaal Triangle, an Airshed Priority Area that was declared a priority area in terms of the National Environmental Management, whom has concerns about the elevated pollution in these areas.
According to departments minister Barbara Creecy, the money received from the fine would be used to install air quality monitoring instruments.
AMSA is currently producing over 5million tonnes of steel per year, supplying South Africa with over 61% of its steel as well as exports to Southern Africa and further north.
Lubumbashi Lockdown, this is due to a spate of coronavirus infections, however the lockdown is not expected to have any effects on Kasumbalesa itself, transporters should expect delays although word is that this lockdown is only affecting private transport.
“To see what is right and not do it, is a lack of courage.”