Electricity + Control April 2018

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ELECTRICAL PROTECTION + SAFETY

Copper Scrap Export

Many of the large South African copper manufacturers rely on good quality recycled copper for their production processes. Large volumes of copper and copper alloys are exported from South Africa at high prices due to an insatiable demand from particularly Asian countries. This is having a devastating effect on the local copper industry and the drive to obtain copper is fuelling the theft of copper cable fromTransnet, Eskom and the telecommunications companies caus- ing billions of Rand of consequential damages. This massive exodus of scrap copper is starving local industry leading to lower production volumes and unemployment. The CDAA is in constant engagement with government to stem this outflow in an attempt to retain ma- terial for its members and grow the South African copper industry. The export scrap guidelines, gazetted by government in Septem- ber 2013, have been revised on a number of occasions due to the ingenious ways certain scrap metal merchants were by-passing the

ered opinion that the inspections of containers is now the most im- portant focus point if we have any chance of reducing illegal exports. It has also been submitted that only one port should be used for the export of copper scrap as this will facilitate inspections. Regardless of the stringent guidelines which may be implemented in August 2018 when the 5 year period for the current scrap guidelines expire, we will only police the legitimate export of scrap which is a small percentage of actual scrap leaving our shores. The copper price has recovered well over the last few months which leads to a greater export drive, both legitimate and illegal. Until measures are introduced to reduce the export of scrap, loot- ing of copper cable and other copper objects will continue. CDAA is asking for a levy on the export of copper scrap, im- proved container inspections, one port of export for copper scrap, no cash for scrap and the elimination of vat on scrap. The latest innovation is for some scrap merchants to melt the scrap into ingots, billets or blocks as these do not require an export permit as is the case with scrap. It also allows more copper to be loaded into the containers yielding higher returns per load. Regret- tably even these melted blocks of copper are not always exported under the correct tariff codes. The lack of follow up on the payment of the exported scrap presents the exporter with an ideal opportunity to have the money paid into off-shore bank accounts, forever lost to the South African economy. It is also well documented that certain Asian countries are experiencing high growth percentages and will continue to do so until at least 2020 which means the requirement for copper scrap will not abate. Enquiries: Evert Swanepoel.Tel. +27 (0) 11 824 3916 or email Evert.swanepoel@copperalliance.org.za

rules and were again to be revised in July 2016. To date nothing has been published but CDAA engaged with the Department of Economic Development in January this year to explain the problems and present solutions. Initial signs are very promising. It is the CDAA`s opinion that copper scrap is now being exported illegally under false tariff codes by unscrupulous scrap merchants which clearly reflects the de- cline in scrap export permit applications. Meetings will also be arranged with the Department of Customs and Excise to discuss the necessary improvement of container inspections. It is our consid-