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Trade Winds bimonthly update volume 35

Another increase looming! Two of the major mills within South Africa have notified that there is a potential increase in the range or R1500.00/Ton for the month of June.

The country waits in anticipation for notice from the biggest mill within the country, ArcelorMittal, if there will be another increase on the back of the previous staggering R2500.00/Ton

To add to the industry’s wounds, the Rubber and PVC sector experienced a 17% immediate effect increase, the first of its kind. The increase has caused a serious impact on current projects and contracts.

South Africa mining output soars, The March reading was the first positive one since February last year, after the February 2021 number was revised into negative territory.

The 21.3% leap was partly attributable to base effects. In March last year, mining output declined 14.9% year on year as mines cut production and sent workers home ahead of the start of the hard lockdown later that month.

This was the biggest bounce since March 2015, when a rise of 21.8% was recorded, the biggest record was noted in October 2013 at 23.2%.

The latest number is clearly a positive sign for the sector and the overall economy.

The April number will almost certainly be a new record, in part because of base effects after mining output declined 51.7% in that month last year. Stay tuned for that number, it’s bound to be a whopper.

Border updates, on the 2nd of May the Zimbabwe Revenue Authority announced that there will be upgrades taking place at the Beitbridge border post which is going to cause significant delays for up to six weeks.

The upside for cargo going north is that the long awaited Kazangula bridge has finally been opened, as of 10 May 2021 the bridge is now fully operational.

Kazungula was meant to be completed by 2018, but the government in Lusaka’s consistent failure to meet financial commitments, as agreed with Daewoo, regularly delayed work on the bridge.

Speaking at Monday’s opening of the Kazungula multimodal bridge across Zambia’s Zambezi River border with Botswana, Zambia’s President Edgar Lungu recommitted his country to building another bridge that will possibly change the face of bulk-haul logistics in the sub-Saharan region.

Temporarily called the Kasomena-Mwenda toll road bridge and border post, the project entails an upgrade of the N5 from the copper-mining nerve centre of Lubumbashi north-east to the Luapula River between the Democratic Republic of the Congo and Zambia.

The crossing will most likely be immediately south of Kasenga from where it will proceed in an easterly direction before heading north-west to Zambia’s Nakonde border post with Tanzania.

Copper price hits new high, shortages of copper and declining inventories could drive prices to levels beyond current record highs unless scrap supplies increase.

Scrap accounts for about a third of the roughly 30 million tonnes of annual global copper supplies, as copper prices rise, the flow of scrap accelerates as the market attempts to cover the gap between demand and supply.

Copper for delivery in July was up 0.9% earlier this week, with futures trading at $4.7620 per pound ($10,476 a tonne) on the Comex market.

Bank of America expects a deficit of 186,000 tonnes this year and a shortfall of 369,000 tonnes in 2022, followed by surpluses in the two years after.

China’s massive purchases of refined copper have been the primary driver of the post-pandemic price rebound, but the Chinese push may be fading.

In 2020, China imported 4.4 million tonnes, up 1.2 million tonnes from 2019.

Barrick on track to achieve 2021 production targets, the company reported preliminary Q1 sales of 1.09 million ounces of gold and 113 million pounds of copper, as well as preliminary Q1 production of 1.10 million ounces of gold and 93 million pounds of copper, in line with their plan.

The average market price for gold in Q1 was $1,794 per ounce, while the average market price for copper in Q1 was $3.86 per pound.

Preliminary Q1 2021 copper production was 22% lower than Q4 2020 as expected. Copper sales were 5% higher than the previous quarter as Lumwana sold a portion of its stockpiled concentrate.

Barrick expects copper production in the second half of 2021 to be stronger than the first half, mainly driven by higher grades from Lumwana.

Caledonia closes off first quarter, Caledonia Mining recorded gross revenues of $25.7-million for the quarter, with higher revenues year-on-year thanks to a higher gold price, offset by lower sales as a result of lower production.

Caledonia reported net cash from operating activities of $2-million for the quarter. Cash from operations was adversely affected by increased working capital, in particular higher amounts due for gold sales.

The responsibility for making payments for gold deliveries from the Blanket gold mine, in Zimbabwe, has moved from the Reserve Bank of Zimbabwe to its gold refining subsidiary Fidelity Printers and Refiners.

The company believes this move will streamline and improve receiving payments for the gold it produces and says this new system is operating well.

Caledonia paid dividends in the quarter of $0.11 a piece which is a 46.7% increase year-on-year and the quarterly dividend increased by 9% to $0.12 a piece in April.

Zambia denies shutting KCM, reports emerged that KCM’s mining operations had been stopped at Konkola Deep underground pit and other KCM plants because of a lack of funds to develop new mining areas.

It is noted that at no point has operations been halted or even stopped and that production has been continuous throughout.

Zambia handed control of KCM to a provisional liquidator in May 2019, triggering an ongoing legal dispute with Vedanta.

Konkola Copper Mines is currently operating and there are no plans to put it on care and maintenance.

Zambia’s economy is heavily reliant on mining, making the sector highly politicised especially as the country heads into a general election in three months’ time.

With copper prices at a ten-year high Africa’s second-largest copper producer which defaulted on part of its sovereign debt in November stands to gain from ramping up production at key mines.

DRC President visits KCC in recognition of investment, DRC President Felix Tshisekedi visited Glencore’s Kamoto Copper Company (KCC) in Kolwezi, yesterday, in recognition of the miner’s near $8-billion investment in the country.

KCC is a joint venture between Glencore and DRC commodity trading and mining company Gécamines, which conforms to the Responsible Minerals Assurance Process standard for cobalt as defined by the Responsible Minerals Initiative.

KCC represents a key part of Glencore’s investment in the DRC, with its modern infrastructure and a significant copper cobalt orebody, which the company states makes the operation a key component to achieving the global energy and mobility transitions.

Following its successful ramp-up in 2020, KCC is on track to achieve nameplate capacity of 300 000 t/y of copper and 30 000 t/y of cobalt production.

Portugal to send more troops to Moz, Portugal will send 60 more soldiers to Mozambique as part of a new cooperation agreement aimed at helping the southern African country to fight insurgency.

Sixty members of the Portuguese special forces are already training soldiers in Mozambique, following the deadly attack in March in the village of Palma, Cabo Delgado, in the northern part of the country.

The agreement, which is in place until 2026, allows Portugal to train Mozambican soldiers on fighting insurgency, sharing intelligence and helping the country using drones to track insurgents’ movement.

The US has also helped Mozambique with training of defence personnel to fight terrorism with the European Union preparing to send soldiers to Mozambique to help fighting insurgency.

 

Upcoming Public Holidays:
17th May 2021 – National Day of the Revolution and the FARDC (DRC)
25th May 2021 – Africa Day (Zambia and Zimbabwe)

 

 

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