Steel Increase for April,
Steel prices have once again risen on all flat products for the month of April.
Prices are increasing by R1000/Ton and based on the current global market trends, prices are likely to continue to increase.
Once again, we urge you to plan your requirements accordingly as price at date of dispatch ruling will apply.
Interest rate hike,
The South African Reserve Bank has surprised the market by increasing interest rates by 50 basis points on 30 March, contrary to market expectations. This hike brings the repurchase rate to 7.75% and the prime lending rate to 11.25%, the highest level in 13 years since the global financial crisis in June 2009.
The SARB Governor, Lesetja Kganyago, has stated that further rate hikes are likely, as the repurchase rate aligns better with the current risk outlook for inflation, which is expected to continue to rise.
Kganyago emphasized that monetary policy decisions will depend on data and the balance of risks to the outlook, given the ongoing economic and financial volatility. It is expected that inflation will return to the mid-point of the target range by the last quarter of 2024.
There has been a positive around the South African economy as the Rand has strengthened considerably this week which is welcomed good news.
South African Government green lights new laws to open electricity market,
On Thursday 30 March, the South African cabinet approved a bill on electricity regulation that aims to facilitate private generation projects and power trading, thereby reducing the nation’s reliance on state-owned utility Eskom, which has provided over 90% of electricity for the country’s industries for a century.
The Electricity Regulation Amendment Bill includes the establishment of an entity to purchase power, as a preliminary step towards creating a competitive market. Minister in the Presidency Khumbudzo Ntshavheni announced that the Draft Electricity Amendment Bill has been authorized for submission to parliament and will be prioritized.
Eskom has been running at a loss, despite its monopoly, and is proceeding with a plan to split the company into separate units for generation, transmission, and distribution. The bill is intended to strengthen the role of the National Energy Regulator of South Africa and enable measures to establish a transmission system operator that includes a “provision of an electricity trading platform on a multi-market basis and provide access to the transmission network on a non-discriminatory basis,” according to Ntshavheni’s statement.
President Ramaphosa calls for action at Transnet,
During a meeting with the Transnet board and executive management team at the Union Buildings on March 28th, President Cyril Ramaphosa called for urgent action to address the crisis in South Africa’s logistics system. However, there are concerns that this may result in more talking than action.
According to a statement, the government has established a clear policy direction for the freight transport sector in the White Paper on National Rail Policy and legislation such as the National Ports Act and the Economic Regulation of Transport Bill, currently before Parliament. In his State of the Nation Address last month, Ramaphosa announced that the government would develop a roadmap for Transnet to address the crisis and implement reforms.
The roadmap includes ensuring sufficient rolling stock, upgrading rail and port infrastructure, addressing security challenges, and implementing reforms to enable private sector investment. Ramaphosa stated that work is underway between various departments, coordinated by operation Vulindlela, to finalize the roadmap as soon as possible.
He emphasized the need to remain focused on structural reforms to improve the efficiency and competitiveness of the transport sector in the long term, including enabling third-party access to the freight rail network by private rail operators. He also mentioned progress towards establishing a separate infrastructure manager within Transnet Freight Rail by October this year.
Ramaphosa highlighted the importance of strong collaboration with the private sector, and other social partners to improve logistics performance. He referred to the willingness of members of the Minerals Council and others to invest in rolling stock and equipment, contribute skills and resources, and pursue opportunities for collaboration.
The President stressed the need for collaborative efforts to formulate workable solutions as part of a collective national effort to fix the country’s transport system.
Association of Mines awaiting Zambian Gov to fulfil its promises,
The Association of Mine Suppliers and Contractors are still waiting on government to fulfil its promises on the way forward by unlocking Mopani and Konkola Copper Mines to restore smooth business transactions.
Mopani and KCM have been facing financial difficulties for different reasons. Mopani was acquired by the Zambian government through ZCCM investment holdings from Glencore, while KCM has been undergoing liquidation under the previous regime.
The Association has confirmed that Mopani Copper Mines is gradually paying off its debt to some of its members, whereas KCM has not yet started the process. The President of the Association, Costa Mwaba, stated that Mopani is already making payments to its members after the recent announcement that the state had injected funds into the mine. He further added that this news was a relief to businesses.
Mr. Mwaba mentioned that the Association is eagerly waiting to hear from KCM this week regarding its plan to pay off its debt owed to members.
Zambia Kwacha Plunges,
The kwacha is on track for its biggest quarterly slide since early 2020, falling 18% against the dollar already this year. Restructuring the $12.8 billion debt has dragged on and created uncertainty in the markets. The kwacha is currently trading above 20 to the dollar.
Zimbabwean Lithium Plant Completed,
Premier African Minerals announced on Wednesday 27 March that the construction of a lithium processing plant at its Zulu mine in Zimbabwe has been completed and expects production of spodumene concentrate to begin by the end of this week subject to receiving final formal approvals from certain Zimbabwean authorities.
Spodumene is an important lithium ore used in the production of batteries for electric vehicles.
As part of a $35 million offtake agreement signed with China’s CanMax Technologies last year, Premier built the plant with the capacity to produce nearly 50,000 tons of spodumene concentrate annually.
Zimbabwe has some of the world’s largest hard-rock lithium deposits and has attracted around $700 million in investment from several Chinese firms, including CanMax, which purchased a 13.38% stake in Premier last year, as well as Zhejiang Huayou Cobalt, Sinomine Resource Group, and Chengxin Lithium Group. On March 22, Huayou announced that it had started trial production from its Arcadia lithium project, which is located 40Kms outside Zimbabwe’s capital, Harare.
The $300 million Arcadia plant has the capacity to process 4.5 million tonnes of lithium ore, producing 50,000 tonnes of lithium carbonate equivalent lithium concentrate.
Australian Man’s Lucky Strike!!
An amateur gold digger armed with an inexpensive metal detector has hit the jackpot in Geelong Australia after finding a 4.6kg gold nugget worth about $160,000 (A$240,000) that he has since christened “Lucky Strike.”
The location where the nugget was found is the same that in 1869 yielded Australia’s largest, named by the prospector “Welcome Stranger” weighing 154 pounds and measuring 24” across.
Upcoming Public Holidays:
7th April 2023 – Good Friday (South Africa/Zambia/Zimbabwe)
10th April 2023 – Easter Monday/Family Day (South Africa/Zambia/Zimbabwe)
“The road to success and the road to failure are almost exactly the same”