The South African Iron and Steel Institute (Saisa) yesterday said that its members fully supported the ban on the export of scrap metal from South Africa along with the other significant measures proposed by the Department of Trade, Industry and Competition to curb criminal activity.
This follows Trade and Industry Minister Ebrahim Patel earlier this month proposing a temporary six-month export prohibition on ferrous and non-ferrous waste and scrap metal, including copper cable, and a permit system for the export of specified semi-processed metal products.
Public comment on the draft policy will close on Friday, August 26.
Trade and Industry Minister Ebrahim Patel said the total cost of copper theft at the end of April stood at about R46.5bn.
Saisa held a virtual media round-table session, with representatives of its member primary steel-making companies, who said they supported the temporary ban.
The group said the six-month ban on exports of waste and scrap metal and the creation of a permit system would hopefully lead to a material reduction in the theft of metal from the country’s infrastructure.
“It will eliminate or reduce one of the avenues for monetising stolen metal, its exportation. These interventions will divert significant volumes of scrap metal to the local market, leading to lower prices, which will likely disincentivise theft and vandalism of infrastructure," it said.
The group said the ban would be beneficial to parastatals which include Transnet and Telkom, who have been plagued by thieves stealing copper in their infrastructure.
“Taxpayers and utility users will have less interrupted service delivery as a result of reduced theft and vandalism. There would be less wastage of government resources on unnecessary infrastructure replacement. Less pressure on rates and taxes, costs of services, and alternative services Eskom, Telkom and Transnet,” it said.
Scaw Metals chief executive Doron Barnes said another bid to curb criminality in the scrap metal industry was to keep records of the scrap dealers.
“You would need to record where you got the scrap from and who you sold it to. This would make it a lot more difficult to hide stolen scrap. They are going to make cash transactions in scrap illegal, eventually, and you are going to need to be a licensed dealer. And if you are caught doing anything illegal, then you will lose your licence,” he said.
“To trade in scrap should become a lot more difficult and a lot more controlled. The intention here is for legitimate scrap dealers to continue trading in an organised and legitimate fashion and to make sure the ability to monetise stolen scrap is limited,” he said.
He said there was a lot of noise about the ban.
“What happens when you have a ban on scrap? Scrap metal is exported, and with local pricing, there is a preference pricing for local buyers for it. All scrap generated in South Africa has a buyer because whatever is not purchased by local steel mills, or local users, would be exported.
“The noise is that there is not enough local demand for scrap, and what will happen is the scrap price in South Africa will reduce, and people don’t want that.
“This has become an argument between a steel mill and scrap dealers who are saying the steel mills are getting cheaper scrap. The idea is to reduce the value of the scrap – that will reduce the value of what is being stolen,” Barnes said.
Also, according to Barnes, if the scrap price becomes very low, no one will steal it.
“So you want to look at the entire economy and see what is better. Do we have a thriving scrap industry where we see whatever infrastructure can be stolen, or do we try and prevent the theft of infrastructure by reducing the value and the ability of the thieves to monetise what they steal?" he said.
BUSINESS REPORT