Copper ban to cost scrap dealers E1.5m annually
MANZINI - Scrap dealers stand to lose about E1.5 million per year due to the temporary ban on the export of copper and copper alloy scrap.
Last Thursday, government, through the Minister of Commerce, Industry and Trade, Manqoba Khumalo, announced that scrap yards were prohibited from buying or receiving copper and copper alloys of any kind until further notice.
The temporary ban is a stop-gap measure by government to contain cases of copper cables and copper-based infrastructure theft, vandalism and malicious damage to millions worth of public utilities’ infrastructure.
Implemented
The ban, according to Minister Khumalo, was implemented with immediate effect, and would continue until proper guidelines and regulations on the dealings of copper and scrap metal had been put in place.
The minister said the ministry would work with agencies at all ports of entry to ensure that trucks did not leave the country loaded with copper alloy scraps. He further mentioned that the ministry would also engage national security forces to ensure compliance with this temporary ban by all concerned parties.
The ban of exporting copper and alloy scrap follows that of South Africa (SA), which imposed a similar prohibition last year, in a bid to thwart rampant infrastructure theft.
Highlighting
The SA Government stated that the theft of metal to be sold as scrap had been plaguing the country, with Stateowned logistics operator Transnet highlighting that in November 2021 alone, more than 200km of steel rails had been stolen across the country.
It is widely known that copper is used in electronic appliances, transportation equipment, communication equipment, industrial equipment, organic chemistry, medicine, as well as alloys.
The ban comes at a time when the kingdom and the SADC region was in a crisis of copper theft, with syndicates targeting the mining, transportation and telecommunications industries. Consequently, this has led to interruptions in electricity, as well as communication lines, with copper prices soaring.
The temporary ban on copper and copper alloys is a huge blow on scrapyards, as they stand to lose millions of Emalangeni annually, according to some scrap dealers. This trickles down to employment, where a majority of emaSwati who were unemployed and relied on collecting copper material to be sold to local scrapyards, will be without means to make an income.
The scrap companies expressed utter shock on government’s move to ban copper, and that it was sudden and would affect their businesses which were legally registered in the country.
According to an owner of one of the largest scrapyards in Manzini, his company generated about E1.8 million per year through the export of copper.
“My company supplies one of the biggest corporations in the country and services its machine. So now the ban ultimately means there will be no copper received in the company from scrap material at all, and the business stands to lose E1.8 million on an annual basis,” the owner revealed.
He further mentioned that the company would have to reduce salaries and the number of its employees. The businessman said even employees who were indirectly employed, such as those who collected scrap material, would be without odd jobs. He mentioned that it was a pity that this happened at a time when the cost of living was high and the economy was unstable.
Moneni Scrap Metals Director Mhlaba Mkhabela was of the view that the announcement by government was at short notice, and without consultations.
“It is a pity that this will affect us who are operating legally as Swazi citizens. This is a huge shock,” he lamented.
Decision
Mkhabela elaborated that they had an association for scrap dealers, which, he alleged, was also not consulted before the decision. He said they learnt about the news on social media and local media platforms.
“This will surely affect business as we employ people who have dependants,” he lamented. Mkhabela further queried on how long the ban would last.
Eswatini Scrap Recyclers Association Secretary General Ian Nxumalo, was of the view that the one who was behind imposing the ban had copied from SA without understanding the basis for the neighbouring country’s decision.
Copper
“In SA, they have big machines to manufacture copper material. So in essence, they produce raw copper material, while in Eswatini, we do not,” Nxumalo explained.
He went on to say there was an insinuation that there was only one company in the kingdom that owned copper, yet this was not the case.
Contrary to popular belief, the secretary general said scrap dealers ran companies that supplied copper materials to big companies.
Nxumalo elaborated that copper was diverse, in that it came from radios, computers, as well as cars.
“Government made an irrational decision really. It is unfortunate that legit companies, which are registered, will be affected,” he said.
The secretary general mentioned that it was a pity that since time immemorial, there was not even one scrap dealer who was arrested and had their licence revoked for being found in the illegal trade of copper material. Nxumalo said this was a clear indication that scrap dealers were not involved in crime. He said culprits should be apprehended.
On another note, he stressed that those who were employed directly or indirectly would be affected by the ban.
He further decried that it was unfortunate that they were not contacted for consultations before the decision.
Dealers
On the value that stands to be lost on an annual basis by scrap dealers, Nxumalo said he could not confirm a specific figure.
Meanwhile, this publication reported that of late, guardrails were targeted by thieves, who reportedly stole them for a quick buck at local scrapyards.
A guardrail is a strong barricade at the side of the road that helps protect drivers from serious injury. They protect cars from hitting large roadside objects like trees and signs, or from hazards such as beside highways.
The thieves were said to have been in the business of stealing guardrails at Mfabantfu area in the Manzini Region, where about E100 000 worth of guardrails had been allegedly stolen and transported to a local scrapyard. Among the syndicate were security guards employed at CM Concrete and some local young people who had dropped out of school.
Suspects
The publication reported that the cables were removed from the guardrails and then sold as scrap metal. Also, seven suspects had been caught in connection with the theft of 103 guardrails at CM Concrete in Matsapha.
Some of these rails were reportedly used in the refurbishing of the road at Mfabantfu.
Meanwhile, Eswatini is not alone among countries that have banned copper. In 2013, Congo banned exports of copper and cobalt concentrates to encourage miners to process and redefine the red metal within its borders, as per an order from its mines ministry.
The order, according to Reuters, provided companies 90 days to clear stocks before the ban was enforced. It was signed by the Mines Minister Martin Kabwelulu.