Border updates, Cross-border transporters and the NGO striving to protect the sub-Saharan interests of long-distance drivers, Transit Assistance Bureau (Transist), are taking a strong stance against an announcement yesterday forcing South African drivers to abide by an SADC Covid-19 protocol.
According to the protocol, decided upon by SADC at the end of July, drivers will have to present laboratory certificates proving they have been tested for the coronavirus.
The certificates, which may not be older than 72 hours and are valid for 14 days, have sparked a fair amount of opposition from private sector logistics concerns, with many transporters complaining of not being consulted by either the SADC or any country officials representing health and transport officials.
When the protocol’s 1 September date arrived, Zambia was the only SADC partner to implement the determination, causing hauliers to ridicule the coronavirus-curbing measure as yet another case of the SADC talking about border harmonisation while practising the opposite.
Botswana indicated earlier that they would still be testing all drivers on entry to their territory, whether they could provide a negative lab certificate or not.
In a shock announcement yesterday, which takes effect as of today, the tax authority said truck drivers would be required to present Covid-19 negative results upon departure from RSA and on arrival.
The statement by a SARS added that all positive truck drivers were to be handled as per the Department of Health Guidelines.
“All other health control measures are also applicable to truck drivers.”
More to come…
Positive news coming from Zimbabwe, there is some positivity in the mining and construction sector within Zimbabwe, this is noted after recent developments came to light.
Zimbabwe is one of the major lithium producers that may draw great benefits from the firm global prices and high demands for the precious mineral due to expected supply deficit projected to start in two years.
Zimbabwe holds extensive deposits of the in-demand mineral which is widely used in the automotive and glass industries, currently Zimbabwe has a single active lithium mine in the country with a number of projects in the pipeline.
The Government classified the commodity as on of the strategic minerals towards achieving its vision of transforming mining into a US$12 billion industry by 2023.
Prospect Resources Plc, an Australian listed company, are the developers of the new Lithium project and expect the mine to enter production by second half 2021.
Following from this, RioZim has signed an agreement for phase two of the Sengwa Coal Plant in Ghokwe North. This plan entails the expansion of the plant capacity to 2800MW increased in 700MW phases.
Lafarge Cement Zimbabwe (Lafarge) is set to complete the installation of a US$2.2 million Dry Mortar Mix (DMX) plant during second half of this year as the cement-maker targets increasing its production capacity.
The project is part of Lafarge Holcim Group’s US$ 25 million recapitalization program.
Zambia mining royalties throws spanner in the works, copper miners in Zambia have halted $2 billion of planned investments because a royalty tax introduced last year makes the projects unviable, according to an industry lobby group.
A plan by First Quantum Minerals Ltd. and Lubambe to invest significant amounts in expansion and new mining operations has come to a grinding halt until this matter is resolved.
Zambia’s uneasy relationship with mining investors has deteriorated over the past 12 months, with the government clashing with Glencore Plc over the company’s plan to mothball Mopani Copper Mines’ operations. KCM’s future also remains unclear.
Threat of terrorism in the region, a growing concern! over the past few months, namely in Mozambique, there has been an influx of insurgents mainly in Cabo Delgado, the result of this has led to more than 50,000 people fleeing their homes from the once most promising district in the country which holds mass amounts of natural gasses and gemstones.
The threat has become such a reality now that neighbouring countries have been mulling the idea of sending aid to help deal with the terrorist organisation, known as Ahlu Sunnah Wa-Jamaa or otherwise locally known as al-Shabaab.
However, its not just the threat of al-Shabaab that has seen the Cabo Delgado province underperforming for decades, locals have said the government has forcibly removed communities from state-owned land after ruby, mining and gas exploration was handed to private companies.
In recent weeks the militants took Mocímboa de Praia, an important border post for travel to and from Tanzania. Government has since battled to regain control the port, SADC has considered sending aid, ranging from intelligence gathering to military support. There is currently an operation led by Mozambican forces accompanied by mercenary groups, however there are accusations being made that this is only intensifying tension within the region.
“When a needle falls into a deep well, many people will look into the well, but few will be ready to go down after it”
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”
Steel Prices on the rise, steel prices in South Africa continue to increase, after back to back increases in July and August, the industry is bracing itself for a further whopping increase of around 10% in September. The continued load shedding is also a massive contributor to the demise of the South African steel industry. Continuous load shedding is creating constant interruptions in the manufacturing process and bringing the steel industry to its knees.
The steel industry continues to fight off cheap imports, the lack of local scrap metal and no backing from the government is not helping either.
Dark days ahead, As of 13th August Eskom once again implemented stage 2 load shedding in South Africa, however research institutes are warning that this could be the worst year yet.
Researchers at the Council for Scientific and Industrial Research have said that 2020 is shaping up to be worse than 2019 in terms of load shedding, unless key decisions are made to stem the country’s ongoing energy crisis.
This is despite initial hopes that the early phase of the country’s Covid-19 lockdown might grant the beleaguered state-owned power utility a reprieve – and despite Eskom CEO Andre de Ruyter expressing a hope, in January, that load shedding might be limited to just three days over the winter period.
Wright, a power and energy specialist, said SA had experienced its worst year of load shedding on record in 2019, with 1352 GW/h of cuts over 530 hours.
He said load shedding for 2020 was projected to reach 1383 GW hours. The lion’s share of the rolling blackouts will likely to be implemented at stage 2.
“In terms of intensity, 2020 is now the most intensive load shedding year,” Wright said.
Wright notes the 2019 Integrated Resource Plan indicated a shortage of energy supply until planned new-build capacity comes online.
By 2022, the energy shortfall is expected to reach 4500 GW/h, at a cost of R60 billion to R120 billion to the economy.
Wright warned that load shedding is expected to continue for two or three more years, depending on whether key decisions were made to address the country’s ongoing energy troubles.
Level 2 arrives, there was some rejoice and positivity in South Africa over the weekend as President Cyril Ramaphosa announced Level 2 of the Risk Strategy Assessment would come into effect as of Midnight Monday 17 August. The tobacco and alcohol industry is now allowed to operate which will slowly boost the economy to some point, however it may be a little too late for the alcohol industry.
Addressing an economic fallout webinar prior to the second booze ban, SAB entrepreneurship manager Barbara Copelovici said the two-month-long ban “had a massive impact on our supply chain.
“We tried to get a lot of smaller suppliers to work with us but unfortunately it created some sort of dependency.”
The ban, she stressed, had totally scrapped if not halved the income of SAB’s rural value chain distribution network.
“The destructive snowball effect on the entire ecosystem,” Copelovici spoke of back then, is now anticipated to be far worse once SAB has taken stock of the negative externalities of the Covid-19 lockdown.
Hard facts of what could’ve been prevented had the second ban not been foisted on the liquor trade by an inflexible government acting on public health service advice that increasingly seems ill advised, were recently revealed when it emerged that the first six weeks of the lockdown alone had resulted in a tax loss of R15.4 billion.
A further R13 billion was recently mentioned as being lost to the fiscus, 118,000 jobs are also at stake.
Truck shortages, there is currently a shortage of trucks in and around Southern Africa, the cause of this is possibly being linked to the impact of slow clearance at the various border posts within the Southern and Central African districts. Last week there were little to no trucks available for going north, however this week it seems to be the opposite as all the South Bound trucks are stuck whilst northbound is flowing.
Curfew prevents clearing, as long as Zimbabwe’s Covid-19 dawn-to-dusk curfew is in place the Beitbridge border it seems will remain a headache for hauliers, especially for transporters and truck drivers going north.
The 6pm-6am infection-containment strategy instituted by Zimbabwe has had a major impact on human resource efficiencies at the border and has left industry bodies like the Fesarta hard pressed to find solutions for the notoriously congested crossing.
Weeks have passed and the border is still a choke point for cargo moving from South Africa to is northly neighbouring countries resulting in massive queues south of the border which have been recorded up to 60kms at a stage.
This past long weekend again proved the importance of having personnel who fulfil certain functions working 24/7 when delays occurred due to the lack of a stamping officer on the Zimbabwean side.
Its been said that in Africa, the “stamp” rules.
Also, last week there was an announcement now that all personnel entering offices at the Beitbridge border post will have to present a valid negative COVID test, this included clearing agents, runners and officials has put a lot of stress on clearing agents and an increase in operating costs.
On a positive note, it seems that the corrupt officials have disappeared from the area and drivers are no longer being extorted for bribes in order to proceed to the border ahead of their fellow truckers.
This is welcoming news as last week things almost flared up over night when honest truckers decided to block the pathways of queue-jumpers.
Following up from last weeks’ update, Kasumbalesa in DRC and the Trans-Kalahari Corridor in Botswana seem to be running as smooth as possible as well Chirundu in Zambia.
Cape Town Port back to business, Mpumi Dweba-Kwetana who is the manager for the Port of Cape Town, has informed the freight industry that operations at the port have returned to normal following an extended period of backlogs created by personnel disruption caused by Covid-19.
A statement released by Transnet National Ports Authority (TNPA) yesterday said the port had reduced vessel waiting time at anchorage and berthing delays, clearing the serious backlog of queued vessels and terminal congestion that had been experienced due to the lockdown, Covid-19, and operational challenges.
However, recovery at the Multi-purpose Terminal is lagging behind the Cape Town Container Terminal where vessel delays are a day at the most. The MPT is expected to announce its recovery plan at the stakeholder sessions in due course.
Ups and downs of the mines, Botswana’s diamond sales have been greatly affected by the COVID-19 pandemic that has seen sales volumes drop by two thirds, this, according to a publication, was caused by low demand which was also exacerbated by travel restrictions which grounded many operations.
Stats show a worrying trend as Botswana’s borders remain closed since March 2020 as a COVID-19 containment measures. It is reported that exports of diamonds from Debswana, a joint venture between Botswana and De Beers stood at US$293 million in the second quarter of 2020 from US$916 million in the previous quarter.
No exports were recorded in the month of May with only US$20 million recorded in June.
Further south, South African gold miners, Harmony Gold Mining Company managed to achieve up to 75% of planned production during the last quarter of its financial year to June 30.
However, year-on-year, total gold production was 15% lower at 1.2-million ounces, mainly as a result of the impact of the Covid-19 national lockdown and phased recovery in South Africa.
Year-on-year, the average underground recovered grade of Harmony’s South African assets was 2.5% lower at 5.45 g/t, compared with 5.59 g/t in the 2019 financial year. This was mainly a result of the impact of ongoing remedial actions to address geological challenges and seismicity at Kusasalethu.
Harmony notes that gold prices have rallied to an all-time high following the global economic fallout from Covid-19 and ongoing geopolitical uncertainty supporting its safe haven status with investors.
The average gold price received for the year under review was 25% higher, at R735 569/kg, compared with R586 653/kg in the prior financial year.
The Gold Miners estimate that the operating free cash flow margin for the year under review may double, from 7% in the 2019 financial year, to about 13% to 15%.
“Do What You Can With All You Have, Wherever You Are”
Border Mayhem, despite efforts being made at Beitbridge border post to reduce heavy congestion, things are just not going their way especially since the curfew that was recently placed in Zimbabwe only allows the once 24hour operation to operate on a 12-hour shift. It has been almost two weeks now since the curfew was placed and cargo continues to build up both north and south of the border.
“One of the issues we’re experiencing at the moment is the runners that can’t cross the border,”
“Before the six-to-six night curfew was implemented, runners from Zim would cross the border and collect all the necessary monies for road tolls required to carry on north. These include things like coupons to get through Chirundu.
Unfortunately, because of the curfew, the runners can’t come through anymore and money can only be collected once drivers are on the Zim-side.
Another issue that adds to this is that the Zimbabwe Revenue Authority’s Documents Processing Centre is closed during the curfew.
However, there is some relief as authorities south of the border have been checking trucks in the queue and directing the drivers with incomplete documentation to move their cargo into the various trucking yards thus allowing drivers with correct documentation to proceed to the border.
It is also noted that trucks are being cleared faster on the Zim side as the officials are easing their expectations on how many trucks should be checked for smuggled goods.
Earlier in the week there were reported positive COVID cases and the border had to be closed for fumigation on Monday.
Following on from Beitbridge, a truck part at Zeerust on the Platinum Highway going onto the Trans-Kalahari Corridor in Botswana has been closed, originally it was said that this was due to a positive COVID case but upon further investigation the result of the closure came from municipal protest action being responsible for the issues that had an impact on the border.
Also, earlier this week, Kasumbalesa had closed its gates. This stems from political unrest in the DRC. Information received indicated that there was ongoing resistance to the political leadership of that province.
It is also noted that that solo journeys were discouraged because of the risk of armed assailants. In one case, assailants sporting assault rifles threatened a driver with his life and immobilised his truck by removing its batteries, which were thrown into roadside bushes.
Cape Town Port Gets the Nod, the middle of month deadline to clear the backlog seems to be well on course and the Western Cape Exporters’ Club (WCEC) had released information indicating that delays at the Cape Town Container Terminal (CTCT) are down to a day.
Based on a daily lockdown report issued by Transnet Port Terminals, the club said there were two vessels berthed at the CTCT – the MSC Shannon and the Santa Isabel with six teams of port staffers working the vessels.
It is recorded so far that 11,900 containers had been worked at the port last week although this number could have been higher if it wasn’t for a mechanical breakdown. Currently there is maintenance being done on the cranes.
The port has been battered over the past few weeks by heavy winds and massive swells but the waters are calm and the skies are clear which is great news.
More positive news coming from further north off the coast line, Durban Container Terminal took delivery of another 13 electric straddle carriers over the weekend.
According to a Transnet statement, the DCT Pier 2 now has a fleet of 15 new electric straddle carriers which are due to be commissioned and handed over to operations this month.
“The eighth-generation equipment arrived fully assembled with improved drive technology, starting reliability, maintainability, safety, usability, ergonomics as well as an ability for a computer application to read data from the control system via Ethernet – providing comprehensive detail on statistics, real-time performance data and operational reports,” according to Transnet.
Although there is a lot of positives in the industry so far there is however a dark cloud as the industry braces itself for massive additional charges after Transnet National Ports Authority (TNPA) asked for a whopping 19.74% tariff hike for the 2021/22 financial year.
This comes as the Ports Regulator of South Africa on Tuesday confirmed it had received the annual TNPA tariff application and that it had started a process of public consultation.
In its application for a nearly 20% tariff hike, TNPA stated that the South African economy had been challenged with slow economic growth, underinvestment, and increasing levels of unemployment for some time.
“The recent downgrades of South Africa’s sovereign credit rating to sub-investment grade by rating agencies has added to the woes of government burdened with rising debt levels, collapsing state-owned enterprises, and weak business confidence levels.
The Authority argued that it was viewed as a catalyst for economic growth and therefore more than ever needed to deliver on its mandate. To do so it required the 19.74% tariff hike.
Celebrating a milestone, August 24th calls for celebrations in Namibia as The Port of Walvis Bay will celebrate the opening of their new container terminal which was commissioned last year.
The NCT has recorded throughput of 115 146 s (TEU) in eight months of operation, and anticipates an upward growth trajectory despite the effects of Covid-19.
Another milestone for the port was its record-breaking 46 berth moves per hour on the Maersk Lunz earlier this year.
Gold Price Reaches New High, Gold advanced to a fresh record high on Wednesday – pushing towards the $2,050/oz mark after breaking through $2,000/oz on Tuesday on the back of a weakening dollar, falling US Treasury yields and expectations of more stimulus measures for the pandemic-ravaged global economy.
Bullion is up nearly 35% so far this year and is one of the best-performing assets in 2020. The precious metal is benefiting from heightened uncertainty around the long-term effects of the global health crisis, as more investors turn to safe-haven assets and an alternative store of value in a low-yield environment.
DRC suspends tax exemption, Democratic Republic of Congo is suspending the value-added tax (VAT) exemption on imports by mining companies in an effort to bolster state revenue, the budget minister said.
Jean-Baudouin Mayo told the finance minister to implement the government’s decision to suspend the exemption after cabinet agreed the move last week, according to a letter dated July 31.
Congo, Africa’s top copper producer, had exempted mining companies from paying VAT on imports since 2016 to help them during a commodity price downturn.
According to Louis Watum, president of Congo’s chamber of mines, mining firms had not been consulted before the government agreed to reimpose the tax, a move he said would hit cashflow.
“We want to make the government understand that if they begin to row back entirely on legal agreements, it will not help the business climate in our country,” he said.
Congo’s economy, which has been damaged by the coronavirus crisis that hammered the demand of copper and other forms commodities, is forecast to contract by 2.4% this year.
The International Monetary Fund has approved more than $731 million of disbursements in the past year to help the economy.
Congo’s foreign exchange reserves were just $836 million at the end of July, which is only enough to cover just over three weeks of imports, according to the central bank.
ArcelorMittal SA falls deeper, last week Africa’s steel giants released a statement advising that the company fell deeper into a half-year loss as demand for steel dropped due to COVID and output declined after operations were shut during lockdown.
ArcelorMittal SA said some parts of its business would remain idle until demand recovered which includes placing its melting operations at its Vereeniging works on care and maintenance from the third quarter. The company expects steel demand to be between 70% – 75% pre-lockdown levels for the foreseeable future.
Coming from a demanding 2019, the first half of 2020 proved to be a difficult time with the impact on business due to COVID. The steel producer which has long battled against cheap imports, rising costs and an embattled local economy, said last month it had begun talks to cut unspecified number of jobs as it tries to cut costs.
Job cuts are a sensitive topic in South Africa where unemployment currently stands at a record high of around 30%.
Now with the latest rumours of plate shortages looming due to lack of billets, the projected company losses will most likely take a bigger hit.
“We May Encounter Many Defeats But We Must Not Be Defeated”
Tensions flare at Beitbridge, following weeks of up and down madness at the Beitbridge Border Post drivers have finally said enough is enough! Over the past week, the queue going north at Beitbridge has grown, with reports emerging of corrupt police officials soliciting R500-R1000 bribes but the drivers are now pushing back.
From early morning on Tuesday this week, video footage emerged of truckers blocking the path of another truck being escorted by police to the front of the queue, the drivers confronted the official insisting the truck return to the back of the queue. This is not an isolated incident.
The queue is currently sitting around the 16km mark in advance of the potential shutdown.
Maersk resumes operations at CT Northbound, Strategies to reduce the backlog at the Port of Cape Town are bearing fruit, with Maersk announcing that it will resume calls at the port on the northbound rotation of the South Africa Europe Container Service (Saecs).
Due to prolonged delays at the port caused by Covid-19 staff shortages, Maersk announced in June that it had decided to bypass Cape Town on the Saecs rotation between Durban and the Port of Algericas (WAF1).
However, in a customer advisory notice released yesterday, Maersk said: “Waiting time in Cape Town terminal has decreased significantly which has allowed us to review our Saecs product.”
“We are pleased to inform you that we will revert back to Cape Town with our Saecs northbound call and resume WAF1 in Port Elizabeth to cover the Eastern Cape market to Europe.”
The shipping line will however continue to bypass the Cape Town southbound and there will be no change to import routings to Port Elizabeth and Durban.
Slump in production, Anglo America’s platinum production slumped by 25% in the first half of 2020 due to the lockdowns imposed in both South Africa and Zimbabwe.
It was also stated that total refined production including tolling declined by 46% to 1,246,900 ounces as the temporary closure of ACP and load-shedding in the first quarter impacted production.
Whilst things look a little bleak on the platinum side, Gold’s record run to almost $2,000 an ounce has burnished cash flows and driven a surge in shares of bullion producers. The rally provides a renewed test of discipline for Barrick Gold Corp. and peers after a similar climb a decade ago prompted a spate of inflated deals and overly optimistic investments that wasted billions.
For gold-mining companies, this is great news, with costs contained even after pandemic-related closures, virtually all are churning out impressive cash. In the first three months, Toronto-based Barrick alone generated $438 million in free cash flow based on a realized price of not far off $1,600, compared to $146 million a year earlier.
Valuations look better too, especially for the sector’s largest players.
Power constraints choking sectors, South Africa continues to face electricity woes and there does not seem to be any light at the end of this tunnel.
Earlier in the year newly elected CEO of Eskom, André de Ruyter, positively said that there would only be three days of load shedding this winter however after three weeks of constant load shedding various sectors within the country are feeling the effects, especially the steel sector, this coupled with the impact of COVID and the never ending steel price increases which have now become a back to back pattern, the industry faces serious challenges with high prices, high demand but low output as the lockdown and electricity issues puts strain on production.
So far this year we have seen steel increase on average by 15-20% with rumours of further increases monthly throughout the remainder of 2020.
“Don’t Let Yesterday Take Up Too Much of Today”
Chirundu 24/7, One of, if not, the most problematic borders on the important North-South Corridor into the copper belt area of Zambia and the DRC last night, told the Federation of East and Southern African Road Transport Associations (Fesarta) that it was open on a 24/7 basis. This comes after previous investigations earlier in the year showed that the border could and should operate at 24 hours seven days a week.
However, the investigations earlier in the year were not actually meant for the border to operate at this level but rather to identify challenges preventing the Zambezi crossing between Zimbabwe and Zambia from returning to previously established OSBP (One Stop Border Post) systems and services.
Mike Fitzmaurice, CEO of FESARTA said the following: “We looked at what it would take to make things work and spoke to officers and customs officials. We found that there’s enough will to make it work and received commitment from all parties concerned to solve Chirundu’s congestion issues.”
The 24/7 decision is effective immediately – and while 24/7 operations were still at a tentative stage, the remainder of the year would be used to fine-tune legal-technical aspects of the OSBP.
Fitzmaurice said it was reassuring that the recommendations made to Zimra and the ZRA following January’s fact-finding mission had been taken to heart, and that it was hoped Chirundu would in time be restored to the OSBP it used to be about 10 years ago.
Congestion strikes Beitbridge again, earlier in the week queues stretching around 8kms formed again south of Beitbridge as ZIMRA has ramped up their game on preventing groceries bought in South Africa being smuggled north across the border. The queue had reduced a bit as earlier in the week it was reported to be around 12Kms however frustrations are still mounting, according to reports ZIMRA officials are searching each and every truck.
There has also been reports of police taking this opportunity to exploit drivers of a reported R500 to jump the queue.
In addition to Zimra’s decision to tighten up on truck checking, staff working for the revenue authority also decided to embark on a go-slow for reasons unexplained.
Another growing concern is the safety of the drivers and in fact other road users, the drivers don’t get to sleep for around 2 days as the queue slowly crawls and once they have been released the drivers are extremely tired and exhausted from not having a good nights rest, thus putting potential dangers to themselves and other road users.
Federation of East and Southern African Road Transport Associations (Fesarta) has been in contact with ZIMRA officials in a bid to clear the congestion.
“There are better ways to deal with smuggling. Checking each and every truck causes massive delays and forces drivers to sit in their trucks for days waiting to get through the border. By the time they finally get through they’re unfit to drive.” Fitzmaurice said.
This is just adding further pressure to all parties involved, drivers are missing deadlines, hauliers are being charged demurrage and projects on the receiving end are being delayed.
JUST IN! following yesterday’s announcement of the 6pm-6am curfew, the slow chug of traffic through Zimra’s facility has been slowed even more, especially because the Documents Processing Centre (DPC) is only working 12 hours a day.
“In other words you have a 24-hour border with the DPC only running for half that,” said Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta).
Earlier Fitzmaurice said Zimra was currently only managing about 30 trucks and hour, yet around 1000 trucks head to that border every day.
At the going rate it means only some 360 trucks are processed and cleared daily, while more and more trucks join the growing queue.
Zimra has just advised that the situation at the DPC centres was being addressed with government. But in view of the curfew introduced yesterday as an emergency restriction to curb the spread of the virus they had no choice but to comply.
They are appealing the ruling to allow DPC to continue working 24 hours but can give no time frame to the resolution of the situation.
Freight industry on its knees, As the industry continues to battle the full extent of Covid-19, the South African Association of Freight Forwarders (Saaff) has provided stats that reveal the extent of the damage.
Saaff estimates that local importers are facing around R1.4 billion in storage and demurrage costs accumulated during level-5 lockdown and more than 20 000 containers piling up in storage facilities whilst continued border congestions add to this burden.
“Road freight in this country is on its knees,” says Marcus Ellappan, director of road freight for Bidvest International Logistics (BIL). “There’s a regional imbalance of freight due to the decline in the economy, which means hauliers are battling to generate revenue, let alone operate profitably, especially on return loads. The protests by truck drivers against the hiring of foreign nationals are impacting utilisation of assets, which also impacts negatively on profitability. Some hauliers are now downsizing fleets as trucks stand idle, and with that jobs are being lost.”
COVID compliance is another nail in the coffin for the freight industry whilst the increase of PPE hijackings adds more pressure.
Light at the end of the tunnel, DRC announced that the state of emergency has been lifted, people in the Democratic Republic of Congo are slowly resuming normal activities in the wake of Covid-19 health emergency.
President Tshisekedi has ordered a three-stage reopening of business activities, schools, and borders.
In a televised address late on Tuesday, President Felix Tshisekedi announced an end to the Covid-19 health emergency enforced since 24 March.
This involved closing DRC’s borders with nine neighbouring countries, as well as shutting down schools, bars and restaurants.
Tshisekedi said that, from Wednesday 22 July, all shops, banks, restaurants, cafes, firms and bars would be allowed to reopen. Public transport can resume, and large gatherings will be permitted.
Back on Track, The Port of Cape Town is making headway in addressing its congestion challenges and is well on track clawing back lost ground.
Following staff shortages, lockdown congestions and backlogs, rough seas and stormy weather the port is back on track.
Information shared earlier revealed that at the Cape Town Container Terminal (CTCT) five vessels were in roadstead and that there were six vessels waiting to be worked. That figure is at least half of what it once was, when up to 12 vessels could be seen at anchorage, waiting for much-delayed berthing slots.
There are still gangs serving the terminal and the target of 2500 moves per day was smashed yesterday when at least 3200 moves were recorded. This is great news for the port.
The Multi-Purpose Terminal (MPT) too is doing well, with two mobile cranes and six straddle carriers in full operation.
At the time of this morning’s stakeholder session, three vessels had been worked and delays are said to be only two days.
“A champion is defined not by their wins but by how they can recover when they fall.”
Transport strike, following last weeks’ violent strikes and protests, things have calmed down this week, the All Truck Drivers’ Foundation (ATDF) has said it is suspending protest activities against foreign nationals working in South Africa’s road freight industry, there are rumours on the ground that a potential transport strike is still on the cards, however there is no confirmation from any reliable sources at this stage, following on this there has been bad weather on the N1 between Hanover and Richmond has been badly affected by a thick blanket of snow covering the upper Karoo.
Trucks who were forced to break suddenly jack knifed, there were reports of a few collisions too due to the ice on the roads.
Some industry representatives believe the weather has forced the ATDF’s hand in the matter, bringing welcome respite to transporters from the violent unrest seen on the country’s roads last week.
Cold Weather halts Cape Town Port’s streak, Efforts to claw back lost throughput at the Port of Cape Town following Covid-related essential staff shortages and subsequent cargo processing delays have been set back by the stormy weather that made landfall this past Monday.
The projected backlog clearance by end July is no longer feasible as bad weather continues to pummel the port. The latest projection is now early August.
The Multi-Purpose Terminal has been affected by swells and bad weather which only allowed one vessel to be worked so far. There has been swells recorded as high as 13 meters since the beginning of the week. There were 10 vessels awaiting berthing slots, nine had to lift anchors and retreat to safer waters.
The port itself was affected by seven-metre swells coming in, affecting quay-side vessels and necessitating immediate intervention from port personnel.
Five vessels had been unable to enter the port – and by noon Tuesday berthing was still on hold.
Transnet National Ports Authority (TNPA) said it would continue to test the swells and would allow vessels to enter the port once it was safe to do so.
Level 3.5?, this past Sunday, President Cyril Ramaphosa added new regulations to the already on going Level 3 of South Africa’s lockdown. Again, Alcohol has been prohibited which has been a major talking point, this not only affects the country’s already struggling economy but has also put a direct stop to South Africa’s wine exports. With the selling and distribution of alcohol being prohibited the transport has been banned too thus not allowing any of South Africa’s famous wines being shared around the world. Tobacco is still a no go; however, the export of tobacco has been allowed, this itself is a positive and hopefully can give the economy an extra life line.
ZMDC begins coal exploration, The Zimbabwe Mining Development Corporation has started coal and methane gas exploration in Lupane, Matabeleland North Province. Some years ago, the government allocated the parastatal two Special Grants to explore coal and methane gas.
“ZMDC found investors for the Special Grants and have since signed a joint venture agreement and now the investor is doing exploration.” Mines and Mining Development Deputy Minister Polite Kambamura said.
The project is a massive investment that would significantly transform Zimbabwe’s economy in sync with Vision 2030 where the government aims to achieve an upper-middle-income economy status.
The development of the Lupane coal-bed methane gas project has the potential to boost the country’s energy generation capacity. Zimbabwe requires an additional 9000MW of electricity to achieve an upper-middle-income by 2030 and currently, the country’s demand for power is around 2000MW.
“The bad news is time flies. The good news is you’re the pilot.”
ZSE suspends operations, The Zimbabwe Stock Exchange advised that all operations have been suspended until further notice.
“Whilst we await the guidance from our regulators on the operational modalities going forward, we notify our stakeholders that trading has been suspended until further notice.” – statement issued by the Secretary for Information.
Brokers have been scrambling to find reasons to inform investors as to why their money has disappeared.
On a positive note, experts have advised that Zimbabwe can significantly narrow its debt if the country manages its vast natural resources in a sustainable manner although the COVID-19 pandemic has worsened Zimbabwe’s debt deficit.
Studies have shown that Zimbabwe holds 13million tonnes of Gold, 2.8 Billion tonnes of Platinum and 16.5million carats of Diamonds just to name a few precious resources.
Dr Moyo said, “with this natural wealth, the country could harness it for development without overly relying on erratic external flows”.
Kopfontein delays continue, Freight flow at the Skilpadshek border is still taking a knock from COVID related issues, the border which is a vital access point connecting South Africa to Botswana and Namibia is facing continued delays as the Botswana health authorities continue with their inflexible coronavirus testing measures for all truck drivers entering the country which requires the drivers to wait up to 72hours for their results.
Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta) said that it doesn’t look like the situation is going to change anytime soon.
“Restrictive testing is a real problem at the border, using Kopfontein for alternative access into Botswana because it’s not as busy as Skilpadshek is also still inconvenient because a lot of trucks have to head back south towards the TAC once they have passed through the border.” Fitzmaurice said.
Further South, ATDF (The All Truck Driver’s Foundation) has denied that its organisation disrupted transport on South African roads and intimidated truck drivers, footage has emerged of two cars sporting ATDF banners, parked on the yellow chevron section of the Key Ridge compulsory truck stop between Marianhill Toll Plaza and Pietermaritzburg.
Sifiso Nyathi the national secretary of ATDF said they were just asking for donations from drivers to boost the struggling organisation’s coffers.
The Federation of East and Southern African Transport Associations (Fesarta) said: “There is a car with an ATDF banner stopping and checking trucks looking for foreign drivers, please be alert”
Nyathi rubbished these reports by saying “We weren’t stopping the truck. There is no stop street on the highway. We were only asking for money.”
It’s not the first time that the ATDF has been accused of intimidating truck drivers, especially on the N3 where scenes of violent arson attacks over the past few years, apparently in opposition to foreign nationals working in South Africa’s road transport sector, have sparked wide-scale xenophobic unrest, claiming lives, destroying property and making headlines the world over.
Assistance for Cape Town Port, twenty specialised employees from Durban Container Terminal have volunteered to assist with delays at Cape Town Port, the teams consists of driver articulated vehicles, rubber tyre gantry cranes and ship-to-shore crane drivers boasting over 100 years of collective work experience.
“Both the container and multi-purpose terminals at the Port of Cape Town have been operating at reduced capacity since the introduction of the lockdown regulations.
“However, with the easing of the lockdown, port activities have increased. The container terminal is currently operating at 60% and the multi-purpose terminal at 75% capacity.
“The portside, which is responsible for marine operations, is only operating at 60% human resource capacity, but is able to offer full marine services. Transnet added.
The team will assist in improving cargo movement and extra staff availability.
Acting chief operations officer at Transnet Port Terminals, Velile Dube, said: “Despite all the challenges, we have been able to reduce the number of vessels waiting at anchorage from 11 to five vessels today.
“We have managed to increase the number of gangs from four to five and are now receiving additional staff to help with shifts.”
Cape Town Port seems to be the only port battling with cargo movement, as the City continues to feel the effects of COVID mainly due to it being the epicentre of South Africa’s outbreak.
Settling the debt, one of Zambia’s major copper mines has committed to pay K8 million out of the K58 million it owes the Kitwe City Council.
On Wednesday afternoon, bailiffs paid the Mine a visit in trying to recover debt owed to the local authority, Copperbelt security rushed to the mine in a-bid to intercept the bailiffs but later all 3 parties entered a closed-door meeting.
Journalists were later addressed and were advised that an agreement had been reached on how the debt will be settled.
“The status is that the amount is K58 million. We have negotiated to pay in instalments and today (Wednesday), the mine will pay K8 million and the rest will be paid in instalments. That is the position,” Nundwe said.
“We must be willing to let go of the life we planned so as to have the life that is waiting for us”
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.”