Commodities slide puts a hold on new projects

With the value of the rand and commodity prices dropping in response to the global economic crisis, most new projects in Africa have been put on hold,” says Liz Gaynor, a project manager at Röhlig-Grindrod. “Except where Angola or the DRC have already committed, very little infrastructure development will take place. It is the start of the rainy season but even so it is the commodity slide that is the big problem. “While the rise in the fuel price has had an effect, this is not really a factor as it is relatively small when you look at the bigger picture and costs involved. If you spoke to me three months ago I would have told you a completely different story but now not even gold is moving,” Gaynor told FTW. While the demand for copper and other commodities is still there, it is on the supply side where things have dried up. “They [Angola and the DRC] don’t want to lose money, and if they hold it up long enough, the price should rise again. One of the problems is that the price has been kept too high artificially for too long – in future the prices will be more realistic. China has for instance started importing pitch coke from Zimbabwe as it is less expensive. “Fortunately we have a small staff and we are currently finishing up all the projects we have been busy with. We don’t want to panic and the entire industry is hoping that projects will start picking up again at the start of 2009,” says Gaynor.