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Trade Winds weekly 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 weekly 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 bi weekly 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.”

Trade Winds bi weekly update volume 2

Over the last few days, Zimbabwe has seen the return of more than 65 citizens who were working on cruise ships and in the UK and an additional 3,500 from South Africa and Botswana whom have all been placed in quarantine, more residents are expected to return over the coming days.

Immigration is extending visas for all foreigners who were caught up in the lockdown. ZIMRA is also extending Temporary Importation Permits (TIPs) for all foreign registered vehicles that passed through the borders just days before lockdown

Earlier this week President Emmerson Mnangagwa announced an additional 2 weeks Hard Lockdown, as a result of Zimbabwe recording their 4th COVID-19 death.

In light of the extension there has been some relief to the mining sector, which has now been allowed to start operating. Lack of testing and safety gear has led some unions to raise concerns fearing health and the wellbeing of mine workers.

A target of 40,000 tests for the next couple of weeks has been set, there are however concerns over the availability of testing kits.

South Africa’s government has reversed plans to close the country’s ports for all but essential cargo after concerns were raised over the potential damaging effects this could have on trade and industry – as the country continues its battle against the COVID-19 scourge.

As a three-week lockdown had been placed in South Africa as of midnight March 26, many restrictions were imposed, namely the movement on all but essential goods and people. The following day, reports emerged that Transnet had advised that all terminals for mineral and mining commodities would be closed as a result, as time went on, Transnet released a statement suggesting bulk terminals and staff would operate “as per demand from mining customers”.

With this being said, Transnet has just recently mentioned that its various port utilities were only half as busy during the coronavirus lockdown, as various logistics subsectors experienced a drop in demand for their services.

Despite being classified as an essential service, Transnet Port Terminals saw a significant dip in its activity, as the economy wound down in April.

The ports division of Transnet said the container sector continued with its operations in the last three weeks of the national lockdown, although at a reduced capacity, in order to observe social distancing in the working environment.

This could soon change, as last night the President of South Africa, Cyril Ramaphosa, announced the “Risk Adjustment Strategy” where levels will be introduced starting with Level 4 which means that some activity will be allowed to resume subject to extreme precautions, these are as follows:

  • Food Retail Stores selling full range of products
  • Agricultural sector
  • Open Casts Mining at 100% – Other Mining at 50%
  • Financial and Professional Services
  • Business Services for Export Markets
  • Postal, Telecom, IT and Fibre Services
  • Waste Recycling

It is important to note that these levels can be changed at any time and some areas within South Africa could be operating at the different levels. For a full breakdown please click

“We are only as strong as we are united, as weak as we are divided”

Trade Winds bi weekly update volume 1

In Moçambique, the Port of Beira has set up various disinfectant posts to cope with an increase in cargo brought in by sea freight diverted away from South African ports which have been operationally closed due to the coronavirus pandemic (Covid-19).

According to Jan de Vries, CEO of Beira concession holder Cornelder de Moçambique, the port’s container volumes are in excess of projected figures released earlier this year, this is mainly due to the increased volumes of food and fertilizer being moved to Zimbabwe and Zambia.

Meanwhile in South Africa, to ensure reduced congestion once lockdown has ended, Government has lifted regulations requiring goods to be sanitised on arrival, Minister of Cooperative Governance and Traditional Affairs Nkosazana Dlamini Zuma has been quoted saying; “If goods have been at sea for many days, there is no need for them to be sanitised because the virus will have died by the time they reach the port”.

South Africa and the European Commission have agreed to calm the current required regulations that expects the submission of original certificates of origin to prove the originating status of goods at the time of clearance – copies or electronic versions will be accepted.

SARS released the following statements:

“While Article 26 to Protocol I of the SADC-EU Economic Partnership Agreement (EPA) requires the submission of an original proof of origin within ten months, SARS will honour or accept copies or electronic versions of certificates of origin while awaiting the submission of the original versions within twelve months of their being issued in the EU,”

“Traders are encouraged to register for the generous Approved Exporter Scheme, within the meaning of Article 25 to Protocol I of the SADC-EU EPA, which allows an origin declaration to be presented in the importing country no longer than two years after the importation of the products to which it relates.”

Over in Zambia excitement is growing as the Kazungula bridge is nearing completion, the bridge was expected to be functional in 2018 but due to labour unrest and payment issues this delayed the construction of the bridge.

This “game-changing” bridge close to 1km long,  will shorten travel times quite substantially compared to the current out-dated ferry service being used.

No official dates have been given for when the bridge will be opened but construction is expected to be completed in June this year.