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Trade Winds bimonthly update volume 32

Another month another increase!  Last month the steel mills within South Africa sent out notice of price increase effective 1 April and unfortunately this is no April Fool’s joke.

With the prices going up in the region of 5% this time round and the expectancy of another increase for May, business is taking a hit in all areas as it’s becoming more and more difficult to secure consistent pricing with some prices only being valid for 1 day!

The oil base price has also increased which has affected the plastics sector and we are expecting further increases on a month to month basis if this continues.

Border updates, there has been an unfortunate event at Beitbridge border post where a driver was shot in the head.

The dangerous security situation that develops at South Africa’s land border with Zimbabwe whenever there’s congestion at Beitbridge has resulted in one fatality and a truck driver fighting for his life after he was shot in the head.

The shooting once again highlights the danger to which truck drivers are exposed when waiting in queues at Beitbridge, especially south of the border.

There is lack of solid information as to why the northbound queue through the notoriously blocked-up border is yet again an issue also contributes to the fear and uncertainty truckers have to put up with at Beitbridge.

Ever Given finally freed, news broke from Egypt this past Monday morning that Ever Given is a float. This came after dislodging efforts were ramped up over the weekend, with at least 15 tugboats working the stricken vessel while dredging was under way.

The 400 meter long juggernaut of a container ship had been grounded in the Suez Canal for six days prior to its release and in turn blocking over 300 hundred ships during this time.

This event is expected to have a major impact on the economy in the coming weeks and months.

Ivanhoe looking to advance expansions, Ivanhoe Mines are looking to advance the expansions at their Kamoa-Kakula plant in DRC which include accelerating the Phase 3 expansion at the Kamoa-Kakula copper mine beyond Phases 1 and 2.

The other is fast-tracking additional hydropower upgrades in the DRC to ensure abundant clean and renewable electricity for all subsequent expansions at Kamoa-Kakula. The management team is also evaluating a potential, state-of-the-art, direct-to-blister smelter that could bring numerous economic benefits and further reduce the project’s Scope 3 emissions.

Democratic Republic of Congo is blessed with some of the world’s greatest hydropower potential. Hydro-generated electricity which can also potentially be supplemented by solar power.

The company will now look to further increase production at the Kamoa-Kakula copper joint-venture and to accelerate the Phase 3 concentrator expansion from 7.6 million tonnes per annum to 11.4 million tonnes per annum.

Together with their partner Zijin Mining, Phase 2 has already been accelerated and they are hopeful to begin production in Q3 2022 which will bring copper production to approximately 400,000 tonnes per year and with phase 3 being brought in thereafter the annual copper production is expected to rise to 530,000 tonnes per year.

ZCDC on brink of collapse, Zimbabwe’s state-owned diamond miner is reportedly on the brink of collapse after president Mnangagwa allowed Chinese mining giant Anjin to resume operations whom the late former President Robert Mugabe forced the closure of seven mining companies, including Anjin in 2016, and went on to merge their assets into the ZCDC.

President Emmerson Mnangagwa reversed that move in a bid to restore productivity in the diamonds sector and develop the country’s ailing economy.

The Anjin Diamond Mining Company contributed about $200m to Zimbabwe’s economy before it was forced to halt operations.

ZCDC has reportedly stopped mining in four of its concessions and abandoned the exploration of three other sites as it currently faces challenges that are threatening its viability.

FQM spends big in 2020, Zambia’s largest mining company, First Quantum Mining is full steam ahead in its mission to incorporate more local people in its supply chain to strengthen Zambian-owned businesses and boost the local economy.

The mining giants procured US$1.65 billion of goods and services from companies registered in Zambia in 2020, which represents 85% of the total expenditure by its, Kansanshi Mine in Solwezi and Sentinel in Kalumbila.

More than 2,500 locally registered businesses benefited from mine contracts in 2020 alone.

It is noted that the goal of FQM’s pro-Zambian approach is to build and stimulate sustainable growth for local businesses in and around its Kansanshi Mine in Solwezi and Sentinel Mine in Kalumbila as well as the country at large.

ZCCM-IH now has complete ownership of Mopani, shareholders in Zambia’s ZCCM-IH have overwhelmingly supported its acquisition of a 90% stake in Mopani Copper Mines.

Glencore agreed the sale of its majority stake in Mopani to ZCCM-IH in a $1.5 billion deal earlier this year.

The general meeting vote on the resolution was the last steppingstone towards the completion of the transaction and ZCCM-IH now holds 100% ownership of Mopani, with the increased ownership, ZCCM-IH will now be an active participant in the global industry.

ZCCM-IH plans to boost the copper output from 34,000 tonnes to 150,000 tonnes and by accomplishing this they are looking to find a new investor for Mopani by the end of the year.

Catastrophic events as Islamic State attack near Total, dozens of people were attacked and killed in a raid by the Islamic State in Mozambique, the attack began on March 24 in the northern costal town of Palma close to Total’s Liquefield Natural Gas Project, a plant that the IS has been trying to get to.

Whilst hundreds of people were evacuated by boats to the provincial capital of Pemba, many people remain unaccounted for.

The attack came soon after Total announced the resumption of work at the plant, no work had been done this year due to lack of security in and around the area.

Total has now said that it would reduce the number of workers on site going forward but for now no work will be done.

The terror attacks have so far claimed over 2,000 lives and about 1.3 million people face security crisis. Nearly 670,000 people have been displaced.

The world is starting to take a closer look, but no real aid has taken place, Mozambique clearly needs help and it’s time that its surrounding allies intervene with help from abroad.

 

 

We would like to take this time to wish our customer’s a Happy and peaceful Easter, and to enjoy their time with their families and most importantly to stay safe.

 

 

“The laughter of a child lights up the house”

Trade Winds bimonthly update volume 31

Steel price increases return!  Earlier this week various mills sent out steel price increase notices in the region of 5% to the sector, again adding further pressure to downstream industries. Constant challenges are being faced as prices continue to rise and the supply of steel is almost non-existent. It seems that the hope of the industry normalizing mid-year has a grey cloud over its head now.

A shock fuel price hike is also in place for the new month adding higher costs to logistics which in turn has negative effects down the line.

Another industry that is facing constant challenges is the plastic sector, Force Majeures implemented by Sasol in South Africa and other producers in America and Europe has resulted in massive increases in the range of 15% month on month is having a damaging effect, affecting prices on mining hose, PVC & HDPE pipes as well as rubber products.

The fuel price hike will also affect the plastic base price.

Border updates, Officials in Zambia stay silent as the Kazangula bridge lays dormant, rumours and guesswork that’s what fills the void of government sector officials who are not forthcoming with trustworthy information about the new bridge at the Kazungula border post between Zambia and Botswana.

Cross border operators carrying freight across the region are forced to use the pontoons which can only handle around 50 – 60 trucks a day whilst the beautiful Kazangula bridge is expected to handle at least 150 trucks a day. However, in all its glory, the bridge remains closed in the backdrop.

Rumour has it amongst transporters that the only reason the bridge remains closed is because money is still owed to the contractors by the Zambian government.

China’s Tsingshan to build mine and steel plant, China’s Tsingshan Holding Group is set to start developing an iron ore mine and a carbon steel plant in Zimbabwe from May, three years after the firm first announced the investment deal.

Tsingshan signed a $1-billion outline agreement with Zimbabwe in June 2018 to build a two-million-tonne-a-year steel plant and has been carrying out exploration and seeking more mineral concessions.

The Chinese company, through its Zimbabwean subsidiary Afrochine, already produces ferrochrome, which will also be used in the production of steel.

China has over the past few years emerged as a major foreign investor in Zimbabwe, with its firms mostly involved in mining of gold, chrome and diamonds and building power stations.

Zimbabwe has previously announced that it has a drive to increase mining revenue to $12Billion by 2023, last year, minerals earned the country $2.4-billion in exports.

Chimona mining invests in Bubi, Midlands based Chimona Mining Company has spread its wings to Bubi District in Matabeleland North where it has acquired new gold mining rights and will be setting up a processing centre under a US$500 000 investment.

The venture is expected to create more job opportunities in Matabeleland North and promote the formalisation of artisanal mining activities in Bubi, which is one of the richest gold districts in the country.

ZCCM on lookout for investors, Zambia’s state mining company is on the lookout for further deals as it prepares to complete its acquisition of a majority stake in Glencore’s struggling copper business in the country.

ZCCM Investment Holdings is considering any opportunities to increase the minority shareholdings that it owns in Zambia based companies.

ZCCM became an investment company in 2000 when Lusaka privatised the country’s mining industry, selling off controlling stakes in its prized copper mines to large mining groups. That process created Mopani Copper Mines, the business ZCCM is buying from Glencore, and Konkola Copper Mines (KCM), which is owned by Vedanta Resources.

Last year, ZCCM announced a change in strategy and said it would focus on mining and energy with the ambition of operating assets rather than just being a minority shareholder.

Ivanhoe completes phase one at Kakula, Ivanhoe Mines has completed 80% of phase one work at the Kakula copper mine in the Democratic Republic of Congo with first production targeted for July.

Ivanhoe is commissioning the concentrator plant at the Kamoa-Kakula operation, and has stockpiles already totalling over 2.16 million tonnes which contains an estimated 95,000 tonnes of copper.

The second phase expansion is set to begin during the third quarter of 2022. This phase is expected to double the mill throughput to 7.6 million tonnes a year. Phases 1 and 2 combined are forecast to produce up to 400,000 tonnes of copper a year.

Other engineering and construction activities underway at Kamoa-Kakula include the completion of upgrades at the Mwadingusha hydro-electric power plant and associated 220-kilovolt infrastructure to supply the mine with clean, renewable hydropower. The Mwadingusha hydropower plant is expected to deliver approximately 78 megawatts of power to the national electrical grid ahead of the start-up of the Kakula concentrator.

US to train Moz fighters, American military personnel will be spending two months in Mozambique, training the local soldiers in an aid to fight the jihadist insurgents.

The ISS has been in the gas rich Cabo Delgado province since 2017 and over the years have been growing in numbers and becoming more brazen with their attacks.

Earlier this week, the insurgents attacked children as young as 11 years old, beheading them with their violent attack. The violent attacks to date have claimed more than 2600 lives and has displaced over 670,000 people.

Few countries such as the UK, US, Tanzania, Zimbabwe and South Africa have voiced their concern and support for Mozambique but unfortunately it seems that its all just talk as the country continues to be battered by the Islamist group.

 

“A single stick may smoke, but it will not burn”