Trade Winds bimonthly update volume 30
South African steel industry on its knees, with the latest closure from ArcelorMittal, the South African steel industry has taken another knock, this puts further pressure on an already struggling sector where material availability is so scarce, raw material prices are constantly climbing and labour costs are rising, thankfully there was no steel increase at the beginning of the month however production costs have risen adding higher costs to finished products.
The sector is still very optimistic that by mid-year, steel levels will be rising and not just in South Africa but across the world.
Border updates, reports that a broken scanner was responsible for the backlog at the Chirundu Border Post between Zimbabwe and Zambia have been disproved, however the actual reason is that the backlog was because of truck congestion at the Port of Beira in Mozambique due to the new in-transit cargo sealing system creating major teething issues at the port, with transporters claiming earlier this week that up to 2000 trucks were stuck at the port.
Enhanced efforts at the port to clear congestion had resulted in spurts of trucks coming through on the Beira Corridor into Zimbabwe and queueing at Chirundu.
Collaborative efforts to clear Chirundu, however, are already paying off, with waiting time at the crossing being reduced from 48 to 24 hours.
The queue was estimated to be around six kilometres at one stage, it was down to about one kilometre yesterday.
Cross-border carriers within the SADC region received good news over last weekend when notice came from Zambia announcing that its recent decision to ban the transportation of heavy-load cargo at its Livingstone border with Zimbabwe had been temporarily withdrawn.
Had the announcement not been made, heavy-haul trucks travelling north or south would have been prevented from crossing the Vic Falls bridge as of the 1st of March.
Concerns were that it would force shipments heading towards the Copperbelt and the DRC to either make use of the Chirundu border which is further east or that north-south cargo would have to go via Botswana which truckers would then have to make use of the notorious Kazungula ferry crossing which has made the news over the past few months due to broken-down pontoons, subsequent back-ups at the border where in theory roughly 150 trucks should be ferried daily but only about 50 make it across.
With all this being said it is still questioned as to why the newly built Kazangula bridge is not operational.
Potential investors for Zisco, two Chinese steel companies as well as state-owned Tiscoare in premilitary talks about the revival of Zimbabwe Iron and Steel Company.
Zisco (Zimbabwe Iron and Steel Company) was once Africa’s largest steel works, Zisco stopped all operations in 2008 due to lack of funding and mismanagement.
Zisco is currently owned by the Chinese government.
It is also noted that there are another four companies looking at investing in Zisco.
Blanket mine a true survivor, more than a century later, Blanket is still going strong with +1 Moz having been produced over its life from both fresh ore and tailings.
Over the past several years Blanket mine has steadily upped production from around 42 000 oz in 2015 to approximately 54 000 oz in 2019 and have now set their sights on producing around 80 000 ozpa from 2022 onwards.
In order to secure Blanket’s long-term future and to allow the mine to reach the 80 000 ozpa target, Caledonia is currently busy with its Central Shaft project, which is effectively creating a new mine below the current workings. Work on the four-compartment shaft, which extends from surface to 1 200 m underground, started in 2015 and the shaft sinking phase was completed in July 2019.
Work on equipping the shaft started in early January 2020 with the installation of pipes from surface to shaft bottom. The equipping has continued to progress steadily since then but due to travel restrictions caused by COVID-19, the project’s completion originally scheduled for late 2020 could be delayed further.
Remarkably, given that shaft sinking is a highly specialised discipline, Caledonia has carried out much of the work on the Central Shaft project in house moreover, it has funded the shaft itself which has so far cost over US$60 million by relying entirely from internal cash flows.
Caledonia has also raised the required funds to invest in the construction of a solar power plant to supply electricity to the Blanket Mine.
Zambia achieves record copper production, Zambia produced 882,061 tonnes of copper in 2020, up 10.8% from 796,430 tonnes produced in 2019.
Africa’s second largest copper producer aims to produce more than 900,000 tonnes of copper in 2021, and has a long-term goal of exceeding one-million tonnes in annual production.
A worldwide shift to electric cars, which use much more copper than cars using traditional combustion engines, is expected to boost production of the metal.
However, Zambia’s cobalt production fell 21.8% in 2020, to 287 tonnes from the 367 tonnes produced in the previous year. The drop has been blamed on the reduced cobalt mineralisation and operational challenges at Konkola Copper Mine.
Gold production also fell to 3,579 kg in 2020 from 3,913 kg in 2019 as ore grades at the Kansanshi mine declined.
Nickel production more than doubled to 5,712 tonnes in 2020 from 2,500 tonnes in 2019, thanks to the restructuring and streamlining of nickel operations which helped drive production up.
Kamoa-Kakula sets production record, Ivanhoe mines achieved a production record in February at the Kamoa-Kakula Copper Project in the DRC.
The 339,000 tonnes mined and stockpiled in February had an average ore grading of 5.5%, this included 47,300 tonnes grading 4.62% copper from the Kansoko Mine, establishing a new monthly production record at Kansoko.
The overall tonnage also included 107,000 tonnes grading 9.01% copper from the high-grade centre of the Kakula Mine.
Kamoa-Kakula is on track to have more than three million tonnes of high-grade and medium-grade ore stockpiled on surface, holding more than 125,000 tonnes of contained copper, prior to the planned start of processing in July 2021.
Ivanhoe believe the potential for sustained higher copper prices further improves the outstanding economics of the project.
ISS Terrorists strike again, Islamist terrorists have murdered four people in the Quionga administrative post, in Palma district, in the northern Mozambican province of Cabo Delgado.
The attack occurred on Friday night 19 February. In addition to the murders, the raiders looted foodstuffs and burnt down houses, including the residence of the head of the administrative post.
Sources say the same group tried to return the following night but they were driven back because by that time the Mozambican defence and security forces had sent units to Quionga.
“Those who accomplish great things pay attention to the little ones”