South African mines to ramp up as lockdown eases

  • Market: Coal, Metals
  • 04/24/20

All of South Africa's open cast mines can resume full production once the country's Covid-19 lockdown period ends on 30 April, while all other mines will operate at 50pc of capacity.

Currently, only those mines supplying coal to state-owned utility Eskom are operating at full capacity because electricity provision is classified as an essential service under the country's regulations aimed at limiting the spread of the Covid-19 pandemic.

Most other mines are operating at a 50pc capacity, unless they have obtained special permission from mining and energy minister Gwede Mantashe to operate at a higher production level.

President Cyril Ramaphosa yesterday outlined a phased, risk-adjusted plan for South Africa to restart its economy, which will see a limited number of sectors resume operations next week.

This comes after Ramaphosa announced a wide-ranging R500bn stimulus package on 21 April, along with an extensive range of tax relief measures. Amongst these was a three-month deferral for the filing and first payment of carbon tax liabilities to 31 October 2020.

"Our economic strategy going forward will require a new social compact among all role players — business, labour, community and government — to restructure the economy and achieve inclusive growth," Ramaphosa said when he announced the package.

Finance minister Tito Mboweni will shortly table a revised budget bill to parliament to deal with all the measures that were announced.

"To manage the health risks of this extremely contagious disease, international experience suggests that a phased approach to the normalisation of economic activity is required, Mboweni said.

Very little is known about how comorbidity factors affect infection and mortality rates, and with existing health problems, cramped living conditions and poverty within the South African, caution is warranted, he said.

South Africa has eight million people infected with AIDS and 300,000 tuberculosis sufferers, which increases its population's vulnerability to Covid-19.

But the longer that growth remains weak, the greater the risk that there will be permanent destruction of economic capacity, which in turn will have serious implications for the income streams of households and companies, Mboweni warned.

Next week, only those sectors with a low rate of Covid-19 transmission and high economic or social value will be allowed to resume. All businesses including mines will have to maintain strict health and safety protocols, including disease surveillance, infection prevention and stringent social distancing measures where possible.

Staff will be screened daily for Covid-19 symptoms, including a temperature assessment. All employees will have to wear cloth masks. Employers have to make sanitisers available or hand washing facilities with soap. Workers older than 60 and those with comorbidities will be allowed to work from home or remain on leave with full pay.

Going forward, economic restrictions will be adapted according to infection levels and the health system's readiness, and may need to be relaxed and tightened in different periods, Ramaphosa said.

An alert system has be created with clearly defined levels of restriction, with five being the highest and one being the lowest. The government will impose these as necessary and, where risks begin to emerge, targeted lockdowns may need to be re-imposed

On 1 May, the country will transition from alert level five to alert level four. Under level four, all essential services plus a limited number of sectors will be allowed to resume.

Borders will remain closed for all goods transportation apart from essential items and no international passenger travel will be allowed except for South African nationals returning or foreign nationals being repatriated.

Only when the country's level of alert is scaled down to two, defined by a moderate spread of the virus combined with high readiness of the health system, can all mines resume operating at 100pc of their capacity.

Once the lowest alert level of one is reached, when virus spread becomes low and the health system is in high readiness, can all sectors resume 100pc of operation and interprovincial movement will be allowed again. And only at this level will a 7pm-5am curfew that will apply across the country be lifted. But international travel remains restricted.

The South African Chamber of Commerce and Industry (SACCI) commended the government's "well thought-out" plan to gradually reopen particular economic sectors, while continuing to mitigate against the pandemic.

To date South Africa has confirmed just under 4,000 Covid-19 cases and 75 deaths. The spread of the virus in the country is expected to peak in September.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
02/26/24

Industria automotriz impulsaría nearshoring en México

Industria automotriz impulsaría nearshoring en México

Houston, 26 February (Argus) — Los fabricantes de automóviles ayudarán a determinar el alcance de las inversiones del nearshoring en México a medida que el impacto de este fenómeno sea más claro a lo largo de 2024 . México ha visto casi $60 mil millones en planes de inversión relacionados con el nearshoring en tan solo 10 proyectos anunciados en los últimos 12 meses. Si bien el alcance del desarrollo del nearshoring en México dependerá en gran medida de políticas generales este año, la atención ya se centra en los grandes proyectos de fabricantes de automóviles como Nissan de Japón, Kia de Corea del Sur y en los de un floreciente sector integrado por 13 fabricantes más pequeños de origen chino, como Chirey, MG, BYD, Geely, Omoda, Jetour, entre otros. La industria nacional de autopartes (INA) estima que México podría atraer hasta $44 mil millones de inversión en autopartes y proveedores automotrices a través del nearshoring en los próximos años. La reubicación o expansión de las cadenas de producción a México para estar más cerca de Estados Unidos atrae inversiones en toda la industria, dijo recientemente el presidente del INA, Francisco González. Teniendo en cuenta que el gobierno estima que México ya ha recibido $110 mil millones del nearshoring desde que comenzó el fenómeno, la asociación ha estimado que alrededor de 40pc de eso está relacionado con el sector automotriz. Nuevo León favorecido Solo el estado de Nuevo León, en la frontera norte de Texas, podría recibir $23 mil millones en los próximos años, en gran parte debido a la construcción de una gigafábrica planificada por el fabricante de vehículos eléctricos Tesla fuera de la ciudad Monterrey. Además de la inversión estimada de aproximadamente $5 mil millones de Tesla, esto atraería a una serie de fabricantes de equipos originales y otros proveedores de piezas y servicio, lo que podría llevar la inversión total hasta $15 mil millones. Sin embargo, la gigafábrica de Tesla que se construiría en Santa Catarina, en los suburbios de Monterrey, tendrá el visto bueno hasta que la planta de la misma empresa en Austin, Texas, haya completado el desarrollo de un modelo de construcción de menor costo para 2025. Pero esto no ha impedido que un gran número de fabricantes de equipos originales y otros integrantes de la cadena de suministro estén empezando a planificar la construcción de nuevas instalaciones cerca del sitio de la gigafábrica para estar listos cuando Tesla construya su planta. Entre ellos, está AGP eGlass que dijo que planea gastar $800 millones en la construcción de una planta de vidrio automotriz de alta tecnología para suministrar a fabricantes como Tesla. De los 278 proyectos automotrices registrados en 2023, un total de 54 se encuentran en Nuevo León, que lo sitúa en segundo lugar nacional, solo por debajo de Coahuila con 56 proyectos en total, y por encima de Guanajuato con 49 y Querétaro con 28. Y de las 54 inversiones registradas en Nuevo León, 23 están enfocadas en la movilidad eléctrica. Esto convierte a Nuevo León en la entidad que atrajo más proyectos de electromovilidad en 2023, por encima de Coahuila, con 19 proyectos y Guanajuato, que registró 13 proyectos de este tipo. En cuanto a la generación de empleos que se anticipa como resultado del nearshoring, el gobierno de Nuevo Leon afirma que ya ha generado más de 42,000 puestos de trabajo directamente relacionados con el sector automovilístico. By James Young Inversiones anunciadas de nearshoring para México $mn Compañía Tipo de proyecto Inversión Ubicación Anuncio Tesla** Fabricación de autos eléctricos 15,000 Nuevo León 28 Feb 23 Kia Unidad de producción 3,000 Nuevo León 15 May 23 Volkswagen Fabricación de autos eléctricos 942 Puebla 16 Feb 24 BMW Ensamblaje autos eléctricos 865 San Luis Potosí 23 Feb 23 AGP Glass Proveedor Tesla 800 Nuevo León 27 Sep 22 Volkswagen Automotriz / cadena suministro 764 Puebla 27 Oct 22 Nissan Planta de ensamblado 700 Aguascalientes 24 Dic 23 Ningbuo Tuopo Group (NTG) Ensamblaje automotriz 700 Nuevo León 28 Oct 23 ELAM-FAW Autopartes 407 Colima 30 Ene 24 Unison Shanghai Componente de autos y partes de aluminio 400 San Luis Potosí 18 Ene 24 Empresas automotrices, Análisis Económico Banorte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read More
News

Liberty Steel targets Australian hydrogen, CCS deals


02/26/24
News
02/26/24

Liberty Steel targets Australian hydrogen, CCS deals

Sydney, 26 February (Argus) — UK-owned producer Liberty Steel has signed separate agreements with the South Australia (SA) state government and domestic independent Santos to respectively explore the use of hydrogen and discuss carbon capture and storage (CCS) opportunities for its Whyalla steel plant in SA. Liberty could become the first domestic third-party customer for the Santos-operated 1.7mn t/yr Moomba CCS project in SA's onshore Cooper basin, which is on track to start injection in mid-2024. Santos has secured finance for its $150mn share of the $220mn project, it said on 26 February, following an initial deal signed with Liberty over the weekend. Santos and Liberty will now enter discussions for a potential term natural gas supply deal that could include abated gas from Moomba. This could help reducing residual emissions from the Whyalla steelworks during a transition period, before the plant fully moves to green hydrogen once that is available at scale, Liberty's owner GFG Alliance said on 25 February. Liberty's separate agreement with the SA government, also signed on 25 February, is for potential supplies from the government's planned 250MW green hydrogen facility near Whyalla in the Spencer Gulf region. The SA government last October chose a consortium comprising Canadian-owned infrastructure group Atco and German firm Linde's subsidiary BOC as preferred contractors for the plant, which is expected to come on line by the end of 2025 . "Today's agreement gives us and our stakeholders confidence to ramp up our efforts and commitment to the production of our 4bn t of high-quality magnetite, the establishment of a state-of-the-art green iron and green steel plant which will ultimately be powered by renewable energy and green hydrogen," GFG Alliance chairman Sanjeev Gupta said. Liberty plans to build an electric arc furnace (EAF) at Whyalla , which will replace the existing coke ovens and blast furnace and lift steel production capacity to more than 1.5mn t/yr from 1mn t/yr. The company has received a A$63.2mn ($41.4mn) grant from the Australian federal government to support the purchase and installation of the EAF. It also has A$50mn committed by the SA government for use towards the EAF, pending approval. GFG Alliance also plans to produce 7.5mn t/yr of iron pellet from locally-sourced magnetite from 2030 in a direct reduced iron plant, which would initially use a mix of natural gas and green hydrogen as the reducing agent before fully transitioning to the latter. Santos is also targeting to offer CCS services from Moomba to reduce emissions from other hard-to-abate industries such as aluminium and cement, as well as from fuels like LNG, it said. Santos owns 66.7pc of Moomba with the balance controlled by Australian independent Beach Energy, which anticipates 30pc of its equity greenhouse gas emissions will be offset by the storage . By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Panama urges fleet to avoid Red Sea, keep AIS on


02/23/24
News
02/23/24

Panama urges fleet to avoid Red Sea, keep AIS on

New York, 23 February (Argus) — The Panama Maritime Authority said today it "strongly recommends" all Panama-flagged vessels avoid transiting the Red Sea because of the increasing threat of Houthi attacks on commercial vessels, while warning vessels against turning off their automatic identification system (AIS). Some ship operators have chosen to disable their vessel's AIS to avoid detection by the Houthis with varying levels of success when transiting the region. That puts these vessels out of compliance with "international requirements related to position reporting," the authority said in a notice. More than 120 commercial and private vessels flagged by Panama were transiting the Suez Canal, the Red Sea, and the Gulf of Aden on Friday, according to vessel tracking data reliant on AIS. "All vessels hoisting the Panama flag before, during and after transiting the Red Sea, Gulf of Aden and Persian and their approaches must keep the AIS and long-range identification (LRIT) on except in those cases in which the captain considers that the safety of the vessel could be compromised or when a safety incident is imminent," the notice said. "The Panama Maritime Authority may sanction violations of such provisions in accordance with national legislation, if they do not formally report through LRIT and AIS to our administration at the appropriate time." The authority said the Bahamas-flagged vessel Galaxy Trader had operated without its AIS for 24 hours, traveling 250 nautical miles through the region, before being attacked by Houthis anyway. For vessels continuing to transit through the region, recommendations by the authority include traveling by night to avoid detection and installing searchlights to scan for the small vessels that likely act as spotters, the appearance of which have preceded Houthi missile attacks . But traveling by night comes with another risk. "At night, small and slow boats without a wake are difficult to detect on radar," the authority warned. "Don't stop if threatened and present a challenging target through proactive maneuvers." The Panamanian flag is flown by the plurality of flagged ships in operation at 17pc of the global fleet, represented by over 8,000 vessels, according to the state-owned Panama Ship Registry. By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Tata Steel headed towards 'major industrial dispute'


02/23/24
News
02/23/24

Tata Steel headed towards 'major industrial dispute'

London, 23 February (Argus) — Tata Steel is heading "towards a major industrial dispute" if it does not "listen" to the multi-union proposal for the decarbonisation of its Port Talbot plant in south Wales, Roy Rickhuss, general secretary of Community Trade Union, said in a note to members yesterday. The National Trade Union Steel Coordinating Committee met with Tata Steel executives, including managing director TV Narendran, in London yesterday, where the unions responded to the company's restructuring proposals — namely the closure of both its blast furnaces and total hot-end. The primary "red line" for unions is keeping blast furnace number 4 operational until 2032, Rickhuss said. However, this is not possible with the 3mn t/yr electric arc furnace (EAF) proposed by Tata, partly because of space and safety constraints when construction is under way. And the EAF will only enable the company to produce around 2.5mn t/yr of hot-rolled coil (HRC), impacting Tata's downstream operations, union sources suggest, citing information from consultancy Syndex. Syndex's plan devised for unions had suggested Tata should move to two smaller EAFs and retain blast furnace number four until 2032. The plan also recommended the construction of a direct reduced iron plant, although Syndex has told unions the business case for this is "weak" because of costly UK energy, and issues with supply. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

EV maker Vinfast sets ambitious 2024 delivery target


02/23/24
News
02/23/24

EV maker Vinfast sets ambitious 2024 delivery target

Singapore, 23 February (Argus) — Vietnam-based electric vehicle (EV) manufacturer Vinfast Auto has set a 100,000 unit delivery target for 2024 following strong car dealership growth, after missing its target last year. The firm expects a majority of the deliveries to happen during the second half of the year, with half from Vietnam and the remaining half split between other regions. Vinfast has called Indonesia the "first choice" in its growth plan for Asia, having agreed to supply 600 EVs to three Indonesian firms in a 22 February announcement. Additional fleet announcements are likely, it said without elaborating. Vietnam remains an important market for Vinfast in 2024 and 2025, its chief executive officer Le Thi Thu Thuy said earlier this month. But the firm expects greater contribution from North America when its dealership in the region picks up, as well as from India and other Asean countries when Vinfast starts exporting right-hand drive models at the beginning of 2025. The firm delivered 34,855 EV units in 2023, almost five times higher from a year earlier. But it missed its delivery target of 40,000-50,000 units. Vinfast now has a production capacity of up to 300,000 units/yr, Thuy said. Vinfast's EV sales value more than doubled on the year to almost $1.1bn in 2023, but the company has been making losses. Net loss was up by 15pc on the year to $2.4bn in 2023, with loss from operations narrowing by 4.8pc to around $1.7bn. "We remain focused on reducing production and bill of materials (BOM) costs and strategically optimising our global manufacturing capex," Vinfast's chief financial officer Anh Nguyen said. The firm is working on initiatives aimed at cutting around 40pc of BOM costs within two years of its vehicle model launches. Vinfast said that it is setting up EV plants in Indonesia and India to take advantage of the respective governments' tax incentives. The company had previously disclosed the plan in 2023, with a planned capacity of up to 50,000 units/yr and an estimated capital expenditure of $150-200mn for each plant in the first phase. Production is likely to start by 2026. The firm in January announced that it will invest $2bn in south India's Tamil Nadu state . The project broke ground on 21 February. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.