Cement-makers may end coal import from South Africa

KARACHI: Local cement exporters are considering ending procurement of coal from South Africa and exploring options to import it from a Muslim country.  In view of an ongoing investigation initiated by the International Trade Administration Commission (ITAC) on alleged dumping of Portland Cement from Pakistan on the application received from four leading South African cement makers, the local industry is considering shifting production process from South African coal to Indonesian coal.

To the surprise of Pakistani exporters, work on this application has been initiated without first verifying the basic facts and without even giving an opportunity to Pakistani exporters of being heard, sources in the cement industry said.  They added that immense political influence has been applied on the ITAC by the South African cement manufacturers and because of this, ITAC intends to wrap up the case by end January 2015 through imposition of a preliminary anti-dumping duty on import of Pakistani cement in South Africa.

Pakistan’s Ministry of Commerce has also raised this matter with South African counterpart in the meeting of Joint Trade Commission (JTC) of the two countries in South Africa held in the third week of this month, but so far no consensus has been reached between the two countries on this issue. Industry sources said that some five to six local exporters of cement are one of the biggest buyers of South African coal and Pakistan is the third largest buyer of coal from South Africa after China and India.

Currently local cement makers collectively import three million tonnes of coal worth 0 million per annum from South Africa and export around 1.3 million tonnes of cement worth 0 million per annum to this country.  The current balance of trade is already in favour of South Africa, and it would become highly favourable if anti-dumping duty is imposed on cement exports.  In case, import of coal from Indonesia starts, it would be a big blow to South African trade, sources said.  An unofficial message of this change has already been conveyed to the South African coal importers through their local agents.

South African coal players fully understand the growth potential of Pakistani market in view of the current energy policy of the company.  With the recent fall in coal and oil prices in international markets and in case Pakistan changes its coal suppliers, it may further erode prices of South African coal in the world market which may prove a severe blow to the current good trade relations between the two countries.