Transnet CEO Portia Derby said on Friday that the ban on the export of scrap metal initiated by the government to curb the theft of copper cables and other grid infrastructure inadvertently had created cartels - an unintended consequence.
In response to questions from the Parliamentary Committee on Public Enterprises and Communications, Derby said subsequent to the just elapsed six-month ban, which is under review to permanent status, Transnet being given a list of takers to invite for the sale of scrap through action had found it created a structure that was “like a cartel”.
This as authorised buyers, including foundries and mini-mills seemed to have a conversation amongst themselves.
In a Gazette last Month, the International Trade Administration Commission (Itac) invited comment on the proposal to prohibit the export of certain ferrous and non-ferrous waste for a further period of nine months.
However, the Metal Recyclers Association (MRA) has said it was unclear how banning the exports of all scrap metal would stop the theft of copper cables.
According to the MRA, the market for scrap was titled as most scrap generated came from big industries such as mining, manufacturing and construction and there were certain exotic metals - such as tungsten, titanium and nickel variants - that did not have any consumption market in South Africa.
“In effect, there had been almost no exports of scrap copper since 2013, nor did the two-month export ban in mid-2020 have any meaningful effect on the theft of copper cables,” it has said.
Derby said the economy would need copper for some time to come. For example, the electric motor vehicle industry needed more copper cabling than conventional vehicles, while the energy transition also required copper for solar systems which would sustain demand of the illegal market.
She said though the ban had perhaps dampened theft a little, there had still been a spike from late May to early June when more than 13km were stolen, in one incident more than 5.5km at a go whereas past trends had been an odd kilometre taken.
Transnet Port Terminal CEO Jabu Mdaki said of the 3800 cases of cable theft reported in the last year, 1400 had been along the container corridors, which were more vulnerable as they stretched to isolated areas.
“Out of six corridors one corridor has 40% of the cases and therefore the concept of recovering 20 cents in a rand is to partially cover for the volumes there which are reducing quite significantly,” he said.
He said over the past year, Transnet had felt more than R3.7 billion worth of loss in stoppages due to cable theft and that R300 million of that was money spent in fixing the line and security services.
Mdaki said the insurance of cables against theft would not remedy the loss caused by productivity stoppages which cost the economy in lost production.
Public Enterprises Minister Pravin Gordhan said the problem was bigger than Transnet and the government. The fight would for now be fought through both legislation and boots on the ground, he said.
The United National Transport Union (Untu) has weighed in against the ban, saying it had not seen any significant impact in curbing the theft of rail infrastructure material vandalism and theft.
“In fact, looking at the recent incident where the Transnet Freight rail services has been halted as a result of the theft and vandalism of the infrastructure, actually proves that this scrap metal ban is not having any real impact on curbing the theft, vandalism, and sabotage to our rail infrastructure. The legal trading of scrap metal also seems to have been affected negatively and some people as we know actually make a living out of the selling of legal scrap metal,” it said.
Untu said Transnet had admitted that its national corridor railway line connecting Gauteng and the Durban port practically came to a standstill due to the theft of power cables, had operated at 25% at some point earlier this month.
Meanwhile, Transnet Port Terminals on Friday said it had been alerted of alleged corrupt activities taking place in coal truck queues on public roads leading to the Richards Bay Terminals. The allegation details how employees working in the port precinct were accepting bribes for nominated trucks to skip queues.
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