South African authorities have reversed plans to close the country’s ports for all but essential cargo after concerns were raised over the potential damage to trade flows, as the mining industry continues to grapple with the effects of Covid-19.
A three-week lockdown has been in place in South Africa since midnight of March 26, imposing restrictions on all but essential movement of both goods and people. The same day, Reuters reported that national port operator Transnet had circulated a note explaining that all terminals for mineral and mining commodities would be closed as a result.
The following day the situation seemed to have shifted, however, with a public statement by Transnet suggesting bulk terminals and staff would operate “as per demand from mining customers”.
Transport minister Fikile Mbalula told reporters that evening that concerns had been raised about the extent of the government’s restrictions on ports and promised that all types of cargo would still be allowed passage.
It was not until April 2 that the situation was clarified by law. Changes to South Africa’s Disaster Management Act confirmed that lockdown rules would not apply to “transportation of cargo from ports of entry to their intended destination, on condition that necessary precautions have been taken to sanitise and disinfect such cargo”.
“All borders of the republic are closed during the period of lockdown, except for ports of entry designated by the responsible cabinet member for the transportation of fuel, cargo and goods during the period of lockdown,” the amended bill adds.
Transnet confirmed to GTR the following day it would “adjust a number of operations” now that transportation and handling of cargo is no longer prohibited. A spokesperson says the goods not listed as essential by the government are nevertheless “critical to the health of the national economy and its revitalisation post the crisis”.
“In this exercise, the company will carry out its mandate within the regulations set out by government, in order to minimise the spread of the Covid-19 virus, and national imperative to ‘flatten the curve’,” they add.
Transnet says it is now prioritising the complex logistics system for containers around the port of Durban – Sub-Saharan Africa’s largest port – as well as the export system from the Northern Cape to the port of Saldanha and the export of coal and other freight through the port of Richards Bay.
Despite that relief for the industry, there are already signs the outbreak of coronavirus – and countries’ subsequent efforts to halt its spread – has impacted trade through South Africa’s ports.
Data provided to GTR by Windward Maritime Analytics, a technology firm that tracks ship movement and port calls around the globe, shows that the number of cargo vessels visiting Durban port in the last two weeks is much lower than for the same period last year.
A total of 56 ships – including bulk carriers, container vessels, general cargo and vehicle carriers – visited the port between March 24 and April 6 this year. For the equivalent fortnight a year ago, that figure stood at 91, showing a drop of nearly 40%.
In terms of deadweight tonnage, which indicates the total weight a ship can carry, the two-week figure for 2019 was 4.1 million, compared to 2.9 million this year.
Impact on metals and mining
The period of time between lockdown and ports reopening also appears to have been one of confusion for African metals exporters.
Trucks transporting copper from Zambia and DR Congo were diverted when en route to the port of Durban as soon as the restrictions were brought in, according to logistics officials cited by Reuters. Dar es Salaam in Tanzania quickly emerged as the most popular alternative, though ports in Mozambique and Namibia also experienced an uptick in activity.
However, copper producers say that has a knock-on effect, as other ports cannot necessarily match the capacity of those in South Africa. “We are talking about delay in terms of months but not weeks here,” one source told Fastmarkets.
South Africa’s mines are also feeling the effects of lockdown. Samson Gwede Mantashe, South Africa’s minister of mineral resources, says activity “will be scaled down significantly, particularly deep-level mining” while restrictions remain in place.
“Essential services supporting the sector – including security and related infrastructure, maintenance, water pumping and ventilation, must continue,” he says in a statement issued late last week.
Mantashe says supplies to state-owned energy provider Eskom must continue, but the production of gold, chrome, manganese, iron ore and other sectors “will operate at scaled down levels, to allow smelters which cannot be switched on and off abruptly, to remain operational”.
Applications to continue operating at a reduced level have already been received by several mining operators, he says.
“While we understand the negative impact that the virus will have on the mining and energy sectors, we must appreciate that this is not the time to put profits at the expense of the health and safety of the people. Zero harm remains a priority, even more so during this time,” minister Mantashe adds.
April 8, 2020