zimbabwe

Trade Winds bimonthly update volume 9

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.”

Trade Winds bimonthly update volume 8

Huge costs, the result of level 5 lockdown has given importers a massive headache as the costs of storage and demurrage of containers sits at a staggering R1.4-billion. CEO of South African Association of Freight Forwarders (SAAF) David Logan is concerned at the amounts being invoiced by shipping lines to importers for storage especially that its for cargo that could not move during the early stages of lockdown.

“Saaff represents 294 South African companies in the international freight forwarding and customs broking arena, managing approximately 70% of the containerised and breakbulk freight moving in and out of South Africa’s sea ports, airports and land borders,” he says.

“The level of charges levied by ocean carriers has been a source of concern for many years, but in normal times there was some justification for this, as it was generally speaking relatively easy to clear and deliver containers within the free time allowed. Under these circumstances it was reasonable for the carriers to expect that their containers should be returned and put back into service without delay,” Logan said.

On the back of this, the delays at Cape Town port is now jeopardising South Africa’s exports, mainly to the United States. The situation which has lasted for two weeks now is due to Transnet being incapable of handling these delays, several freight liners have been caught on film queueing at anchorage waiting to enter the port. Last week it was reported that employees were asked to stay at home because of Cape Town being the epicentre of South Africa’s COVID outbreak, it seems that Transnet is hiding behind the COVID pandemic and not informing Importer, Exporters and transporters of what is going on.   

Bottlenecking at Beitbridge, since the delays from last week, it was decided to convert a container into a manual testing station that sits on the bridge over the Limpopo River however this has resulted in further delays at a bottleneck effect.

Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta) said the following:

“The completion of forms, the fact that it takes around 15 minutes to test each driver – it all adds to delays.”

Last week he questioned why drivers weren’t encouraged to fill in the forms online.

Adding to this, there are other factors contributing to the delays now coming from ZIMRA’s Documented Processing Centres (DPC), all commercial bill of entries are being processed electronically and these are being processed at Harare, Masvingo and Bulawayo DPCs however Bulawayo’s DPC was recently closed as there was a confirmed COVID cases. Once these bills of entries are processed the trucks are then given the go-ahead to the port of entry/exit where authorities there only check for conformity.

Under normal circumstances, 600 haulage trucks use Beitbridge Border Post with 300 going either side but the average has increased to nearly 1 000 daily. The increase comes after other routes in Botswana and Mozambique have been closed off.

Power struggle, Copperbelt Energy Corporation (CEC) has accused the Zambian Government of trying to expropriate its assets. This comes after a feud involving CEC supplying Konkola Copper Mines with power, the government placed KCM under liquidation a year ago, and which has a $144 million unpaid electricity bill to state owned ZESCO. The state last week declared Copperbelt Energy Corp.’s electricity lines as a “common carrier,” which by law other companies are allowed to use them by paying a fee.

The energy regulator set a fee for using the infrastructure that’s about 30% of what CEC normally charges, the company said.

The decision has negatively impacted CEC and they are now on the brink of defaulting on all loans borrowed.

Tackling undervaluation, Zambian mining authorities have speculation that major mining companies within the country are submitting below par samples of the minerals they are mining in order to pay a less mining tax.

“The loss of revenue could amount to hundreds of thousands, or even millions of dollars per export, depending on the discrepancy in mineral grade between the sample and the consignment being exported,” Barnaby Mulenga, permanent secretary at the ministry of mines, said in a statement.

From 1 July mines ministry officials will start collecting samples from the various mines.

“Life is 10% what happens to you and 90% how you react to it.”



Trade Winds bimonthly update volume 7

Political interference, news just in, caution has been sent out to transporters and drivers as unrest broke out at near a market just south of the Kasumbalesa border, there are claims of a faction war as a political member was dismissed from parliament, currently there are no cases of injuries or damage to vehicles but transporters are urged to not proceed to the Kasumbalesa border.

Continued delays, the Zimbabwean Revenue Authority (ZIMRA) has decided to check every truck entering the country, only a certain amount of trucks are allowed to be released every hour by SARS which is again leading to continued delays and creating longer queues going north at the Beitbridge border post, transporters as well as importers and exporters await an update from Shipping and Forwarding Agents’ Association of Zimbabwe, there is a concern too about the amount of weight the bridge can handle as the trucks sit stationary.

Drivers are calling on help from SADC as their working conditions worsen, a driver who used his phone to record the congestion in Botswana just south of the Kazangula border post said the following “We are about 100 trucks, there’s a single toilet, no water, no food, this is so inhuman. We are appealing to the SADC to do something about it.”

Since then the Botswana Presidential Covid-19 task team has seen the footage and has re-assured the public and relevant stakeholders that they are continuously looking at ways to streamline processes and overcome any challenges.

According to Freight News, “the Presidential Task Team on Covid-19 has directed that, with immediate effect, all truck drivers entering Botswana will now be required to produce evidence of negative Covid-19 results that are not more than 72 hours old, if your test results come in after 48 hours you then have one day to transit into Botswana.”

“So, if you’re stuck in a queue with all the drivers waiting for their results, your valid test will no longer be considered in Botswana and you would need to be tested again.” Said one transporter.

Level 3, President Cyril Ramaphosa announced last Sunday that the whole of South Africa will be going into Level 3 from the 1st of June allowing for the majority of the economy to open up however on Tuesday, Health Minister Dr Zweli Mkhize advised that some coronavirus hotspot areas could remain at level 4, this is to be determined on the amount of cases reported in these areas and will be re-evaluated every two weeks.

Doors closed… For now, AngloGold Ashanti has temporarily shut its doors on mining operations following 164 miners testing positive, the world’s deepest gold mine just recently resumed operations at 50% capacity but due the positive tests results, has been forced to halt operations at the Mponeng Mine.

Sibanye-Stillwater may not resume at 100% just yet says CEO Neal Froneman.

“We are not even sure that we will ramp up to 100%, and we will have to assess that in the next phase of the ramp-up,” he said, adding that the implementation of safety measures would be challenging at deep operations.

“What I have assured is that we are not putting commercial issues ahead of the wellbeing of our employees.”

There are more cases expected at the various South African mines which is going to put pressure on operations and the country’s economy however positivity is on the rise as the country gears up for Level 3.

“When nothing is sure, everything is possible.”



Trade Winds bimonthly update volume 6

Chaos ensues at the Beitbridge border post as the closure of Botswana’s border post mounts huge pressure on the ZIMRA clearing system which is also understaffed for such volumes.

Developing reports are showing that there is a double lane queue that is roughly 12 Kilometres long, drivers are crossing over to Zimbabwe without having received their Zim Notification and are being fined which itself is adding pressure to the whole ordeal.    

Truck drivers headed towards Botswana face stringent COVID-19 measures, the usual three days allowed to enter the country has been slashed down to just one day.

 According to Freight News, “the Presidential Task Team on Covid-19 has directed that, with immediate effect, all truck drivers entering Botswana will now be required to produce evidence of negative Covid-19 results that are not more than 72 hours old, if your test results come in after 48 hours you then have one day to transit into Botswana.”

“So, if you’re stuck in a queue with all the drivers waiting for their results, your valid test will no longer be considered in Botswana and you would need to be tested again.” Said one transporter.

Growing queues at the Beitbridge border post

Nakonde re-opened, President of Zambia, Edgar Lungu announced on Friday that the Nakonde border be re-opened to the movement of cargo only, President Edgar Lungu shut the border on Sunday after the town of Nakonde recorded 76 cases of COVID-19.

“Trucks from both sides have been moving, starting with those destined for Tanzania,” Malozo Sichone, the minister of Zambia’s Muchinga province, said.

Health Minister Chitalu Chilufya advised that the lockdown imposed on Nakonde town was lifted on Friday, however restrictions on movement would be in force from Saturday to allow for mass screening, the general public are still barred from crossing the border.

More woes for SA Miners, Mining Giants Harmony Gold have had to slow down production at their Kalgold Mine whilst mining has come to a standstill as two sub-contractors tested positive for COVID-19, this comes just days after positive results yielded at Marula Joint Venture, a platinum mine, and at Dwarsrivier, a chrome mine, which are both situated in the country’s Limpopo province.

CEO of Harmony, Peter Steenkamp said “Every effort is made at our mines to mitigate the impact of the COVID-19 virus,”

“Harmony will continue its routine screening and testing at the mine in line with its COVID-19 Standard Operating Procedure,” the company said.

Implats (Impala Platinum) has also temporarily suspended production after announcing that 19 employees had tested positive at their Marula plant on the weekend.

National Union of Mineworkers (NUM) has called on the Limpopo provincial government to shut mines in the province.

Namibian Ports Open, Namibia has vowed to keep its ports open to allow the movement of goods to its landlocked neighbours, this was announced after President Hage Geingob met with leaders from South Africa, Zimbabwe, Angola, Lesotho, Eswatini and Mozambique.

“Covid-19 is a global pandemic and requires coordinated regional, pan-African and global action, during this difficult period, Namibia recognises how interdependent and how interconnected we are as neighbours,” Geingob said.

“Don’t wait for your ship to come in, swim out to it.”

Trade Winds bimonthly update volume 5

The “Dar Corridor” which connects Zambia to the Port of Dar es Salaam in Tanzania has come to a grinding halt after Zambia authorised the closure of the Nakonde border indefinitely to curb the spread of COVID-19 infections.

The decision was made after a surge in infections which blamed has been placed on truck drivers coming from Tanzania who themselves have seen a rise in infections.

Chitalu Chilufya, Zambia’s health minister advised that the border would remain shut until further notice, during this time health workers will be retrained with regards to the screening process in hopes of speeding up testing.

Fears are mounting that this will negatively impact and already struggling economy, however President Edgar Lungu announced last week Friday that certain measures will ease, he had this to say “We have experienced reduced revenue and if the status quo remains the same, our economy will plunge into the worst crisis, I have therefore seen it inevitable to reopen cinemas, restaurants and gymnasiums,”

 There is still much confusion with regards to Zambia’s lockdown as there is conflicting reports whether the country is or isn’t in a lock down.

Producing at a loss, South African Miners are becoming more and more concerned as the effects of COVID-19 are negatively impacting deep level mining in the country, last month government allowed deep level mines to operate at half capacity, this is however is not sufficient according to mining giant’s CEO of Sibanye Neil Froneman, he said “Labour intensive mines cannot continuously operate at these levels, so they will either have to restructure or shut down, you can’t keep on producing at a loss”

“We are causing more harm by constraining the economy than we are impacting positively on Covid-19,” said Froneman. “We have gone too far now; we now need to get the economy to start up.”

South Africa produces 75% of the world’s platinum and about 40% of palladium.

Sibanye which is the world’s number one platinum miner and Harmony Gold Mining Co. have ended guidance, whilst the likes of Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd. have slashed their output forecasts.

Chirundu delays have seemingly come to an end, just last week Zimbabwean officials were instructed to move down south and inspect vehicles sitting at truck stops in order to combat potential smuggling, by the weekend this resulted in a 27km queue and drivers further down were being robbed of their possessions at gun point, Zambian officials acted swiftly and came to assist in the control zones on the Zimbabwean side and by the beginning of this week the queue had been reduced to a 7kms, processing of drivers is now moving smoothly and its business as usual.

“Life isn’t about waiting for the storm to pass; it’s about learning how to dance in the rain”.

Trade Winds bimonthly update volume 4

Zimbabwe had announced on Sunday, plans to open a new stock exchange by using the attraction of Victoria Falls and turning the resort into an international financial centre which will be known as Victoria Falls Stock Exchange (VFEX).

Foreign investors have seemingly lost interest in the country’s capital markets, so the aim of opening VFEX is to lure investors back thus building global capital and targeting most specifically, the mining sector. VFEX will trade in foreign currency only.

The modus operandi is to mirror the likes of other offshore centres in Africa, such-as Mauritius, who is a standout offshore financial centre. Internationally, these types of centres are found in the UK, Singapore, Hong Kong and the EU (Luxembourg & Netherlands).

Frustrations mount as delays are being experienced at the Chirundu border. Zimbabwean officials have been instructed to move down south and inspect vehicles sitting at truck stops in order to combat potential smuggling thus resulting in slower processing at the “control zones”, in turn a queue has formed reaching a distance of 10km.

Just north, Zambia is still fully trading despite having 139 confirmed cases and 4 confirmed deaths due to the Coronavirus with no indication that the country will enter a lockdown anytime soon.

South Africa entered its first week of “Level 4” lockdown, as businesses slowly resume operations under very strict government regulations. Only a specified list of industries has reopened and most at a third of their work force. This coupled with the additional regulations surrounding work areas, PPE, health screening and social distancing has companies and individuals alike struggling to find their footing in the new business world. We must call on one another, not only as South Africans but as Africans to remain positive, hopeful but most importantly safe during this trying time.

            “Unity, to be real, must stand the severest strain without breaking.”

Trade Winds bimonthly update volume 3

Zimbabwe owned Rio Energy Ltd, with the help of Chinese owned China Gezhouba Group Corp will be in, collaboration, building a new 2,100 megawatt thermal power plant in northern Zimbabwe with a staggering price tag of $3 Billion.

“CGGC will develop the project and assist with the fund raising,” Caleb Dengu, chairman of Rio Energy Ltd said last week.

Construction of the Sengwa power plant will be done in four phases, counting of around 700 megawatts in each phase, adding a total capacity of 2,800 megawatts to the grid.

“We have coal reserves to support a 10,000 megawatt plant at Sengwa,” Dengu said.

This will hopefully over time tackle the energy challenges Zimbabwe face as they import and generate a combined 1,300 megawatts short of its 2,200 megawatt demand.

Business as usual for borders within Zimbabwe, Beitbridge and Chirundu are open for Business, commodities are flowing in and out however they are being stopped for inspection to ensure that they conform to what ZIMRA deems “essential”.

South African’s eagerly await the latest confirmed announcements with regards to the new “Risk Adjustment Strategy” as the various sectors are expected to slowly open up from next week, there is still some grey areas as to which metros will be operating at Level 4 and which will be remaining at Level 5 also known as “Hard Lockdown”.

Mining Giants Gold Fields have projected a 32,000 ounce loss of production at its South Deep mine in South Africa due to a nationwide lockdown.

The miner, which has operations in South America, Australia and West Africa advised that gold production for the quarter ended March 31 was 537,000 ounces, down from 542,000 ounces a year earlier.

“The impact of the pandemic has been relatively muted on our operations, with production only slightly affected. However, the situation is fluid and there is the possibility of further lockdowns and restrictions in the countries in which we have a presence which may lead to production disruptions in future,” Gold Fields said.

Unfortunately, some mines are feeling the effects of the pandemic and lock down as South African gold miner Village Main Reef has started its retrenchments process of workers at its West Gold Plant, Tau Lekoa and Kopanang mines.

The National Union of Mineworkers (NUM) has said that as many as 6 309 workers could be without jobs, although NUM had not been properly informed of the potential job losses, they have called on the mines ministry to intervene.

Leaving off on a positive note, South Africa’s 26 years of Democracy was celebrated this past Monday and the world joined in by displaying the colours of the country’s flags on some of their landmarks.

Image: Facebook/Burj Khalifa

Images of the late former president Nelson Mandela were also put up in the famous Times Square in New York.

Image: Facebook/Times Square

           

“It is during our darkest moments that we must focus to see the light.”