SCRAP IN DEMAND South African scrap merchants are being offered top prices for copper scrap by overseas buyers, possibly prompting illegal exports
Illegal scrap copper exports continue to place South African manufacturers that use the metal under pressure to maintain the profitability of their operations and so retain their workforce, says Copper Development Association Africa (CDAA) executive chairperson Evert Swanepoel.
“The country is seriously affected by the illegal export of scrap copper, which is stolen to supply the insatiable demand of the Asian market, in particular,” he says.
South African companies that use recycled copper in their manufacturing processes have to pay high prices for scrap, as it is increasingly being exported illegally. It is, therefore, in short supply because local scrap merchants are offered prices by overseas buyers that local manufacturers cannot match.
Swanepoel highlights that container inspections at ports do little to curb illegal exports, as they are extremely difficult to conduct with any level of efficacy, owing to inadequate skills and insufficient manpower. “The more scrap that leaves our shores, the more South African manufacturers are put under pressure to keep their operations viable.”
Moreover, the International Trade Administration Commission of South Africa (Itac) reports a steady decrease in the tonnage of legally exported copper from 119 012 t in 2012 to 40 686 t in 2016.
Swanepoel says anything that is made of copper is at risk of being stolen, such as tubing and brass garden taps, but that the most common item for theft is electrical cabling, as there are kilometres of unguarded cable in the country. He adds that this is resulting in damage to infrastructure to the estimated value of R8-billion a year.
“The CDAA is working with government to stop the illegal export of copper, but we have not had much success to date.”
Swanepoel highlights that Itac is expected to issue new guidelines to manage the problem in the coming months and that the CDAA has received support from the South African Revenue Service in its endeavour to curb illegal exports. “Only time will tell if this will culminate in successfully retaining copper scrap for the local manufacturing industry,” he concludes.