Metal export restrictions

14 Aug 2023

11 August 2023
Engineering News
by Riaan de Lange

For many years, I have spent Friday afternoons ‘eagerly’ scrutinizing the Government Gazette. I contend that most of the gazettes are published simply for landfill and recycling purposes, as they hardly qualify as favorite reading material. However, I can assure you that, in all my years of scrutinizing the gazettes, there has never been a dull moment.

Take the editions of July 25 and July 26 as cases in point. When picking up the two gazettes, I thought for a moment that I was partaking in one of those ‘spot the difference’ games where one has to find a set number of differences between two similar images. Both gazettes were seven pages long, both were from the Department of Trade, Industry and Competition (DTIC) and both shared the same title: ‘Request for Comments from Interested Parties on the Proposal to Further Restrict the Export of Copper Semi-Finished Products, Temporarily Prohibit the Export of Used or Second-Hand Rails, and Subject Rails to Export Control’.

The only difference, other than the dates, that I could find was the different gazette numbers – R.3703 and R.3706 – which means the closing dates for comment are also different, being August 15 and August 16. Two product categories are dealt with – copper semi-finished products and rails – with the 11-page ‘Implementation Actions on Measures to restrict and Regulate Trade in Ferrous and Non-Ferrous Metals Waste, Scrap and Semi-Finished Ferrous and Non-Ferrous Metal Products to Limit Damage to Infrastructure and the Economy’, which was published in the Government Gazette of November 30, 2022, providing background information.

The policy was formulated by the DTIC after having taken account of research by independent experts, including those from Trade and Industrial Policy Strategies and Genesis Analytics, as well as comments from State-owned enterprises (SOEs) and the public. The policy identified the export of copper semi-finished products as a major avenue for the export of copper waste and scrap and therefore a major avenue that is open for the monetisation of stolen copper.

In the latest proposed amendment of the policy relating to copper semi-finished products, the Minister proposed that, to address this persistent problem, the sources of copper which could be used to produce copper semi-finished products for export be limited. Until December 15, the International Trade Administration Commission of South Africa (ITAC) will only issue export permits for semi-finished copper products (unrefined copper, copper anodes for electrolytic refining, refined copper and copper alloys, unwrought copper, master alloys of copper, and copper powders and flakes) after it has determined that the products are manufactured from raw copper ore, copper waste and scrap generated in the ordinary course of business as a by-product of a manufacturing process, or used infrastructure disposed of by SOEs.

This limitation will enable ITAC to more easily verify the source of the copper used to produce copper semi-finished products. Export permits issued prior to the date of publication of the trade policy directive will continue to be valid. With respect to rails, it is alluded it has come to ITAC’s attention that that exporters were exporting ferrous scrap rails (that may consist of stolen infrastructure), including ‘rails’. The exportation of ‘rails’ is not currently subject to ITAC’s export control measures, which creates a loophole for the exportation of ferrous rail scrap without any control or regulation.

As a consequence, the Minister proposes to prohibit the export of used or second-hand ‘rails’ until December 15; to bring ‘rails’ under ITAC’s export permit control; and to direct ITAC not to issue export permits for used and second-hand ‘rails’ until December 15, although it may issue export permits for new ‘rails’. After December 15, ITAC may issue export permits for new, used and second-hand ‘rails’. Comments must be submitted by the deadline to the director-general of the DTIC by e-mail on or hand-delivered to 77 Meintjies Street, Block A, First Floor, Sunnyside, Pretoria, 0002