Push for benefication will affect future of bulk exports

Open for discussion
at the ANC national
congress NGC
2015 is a range of
issues which have the potential
of affecting the future of bulk
exports through South African
ports.
Included in the discussion
document ahead of the
Congress, which is held every
10 years, is the statement “it
is crucial for South Africa to
improve the competitiveness
of the domestic environment
– including moderating
administered price increases,
reducing the anomalous
port and freight subsidies for
commodity exporters, and
better managing the level and
volatility of the rand in order to
grow the pool of industrialists
exporting to their traditional
markets.”
It is argued in some
quarters that Transnet is
cross-subsidising bulk exports
through its container tariffs.
If bulk exporters were to pay
the true cost of exports then
the utility would be able to
reduce its container rates, so
making manufacturing more
competitive.
This statement will resonate
with exporters of manufactured
goods, such as motor vehicles,
who have been complaining
for some time about what the
sector claims are among the
highest port fees for container
handling in the world.
If it results in action
there will be far-reaching
implications for organisations
such as Transnet Freight Rail,
which will have to change its
focus from the transportation
of bulk materials to that
of semi-processed and
manufactured goods.
Freight forwarding agents,
as well as operators of bulk
terminals within the ports,
will also be affected. The more
nimble will adapt and make the
most of the new opportunities.
Raising the cost of the
colonial practice of exporting
unbeneficiated raw materials
supports the ruling party’s
stated aim to revitalise the
economy.
The discussion document
states: “An incisive and frank
analysis of causes of the
constant de-industrialisation
and lack lustre progress on
beneficiation and localisation
drive is essential.
“These are some
of the strategic
opportunities to
turn around the
economic strain
and create the muchneeded
jobs as well
as opportunities to
realise Broad-Based
Black Economic
Empowerment.
“Manufacturing
should leverage our
comparative advantage in
primary mineral extraction
by focusing on up- and downstream
beneficiation and
diversification into faster
growing markets, particularly
Sub-Saharan Africa (SSA).
“This will improve our trade
balance more sustainably than
by simply increasing exports of
a depleting pool of unprocessed
minerals,” states the discussion
document.
If the government responds
it will be following the example
of SADC neighbours Zambia,
Botswana and Zimbabwe.
Zambia has prohibited the
export of unprocessed copper
concentrate, which has
resulted in the creation of a
local smelting industry which
now processes copper for the
neighbouring Democratic
Republic of Congo.
Zimbabwe has been
attempting to force platinum
producers to process ore
locally, but companies have
been slow to invest for a
number of reasons.
Commodity exporters, and
those involved in the logistics
chain, will be watching
with interest to see if there
is more will to implement
resolutions from the 54th
ANC National Congress than
those of the 53rd.