Practical difficulties will outweigh logistical rules, instructions - SA producers

Minor metals and ores and alloys producers that rely on shipping routes out of South Africa are warning that practical barriers to producing and transporting material outweigh any technical green light to export, amid conflicting instructions from the country’s authorities.

A notice from South African Maritime Safety Authority (SAMSA) caused widespread confusion on Tuesday by saying mineral exports were allowed from the country, despite a three-week government-imposed lockdown from March 26 effectively making this impossible.
President Cyril Ramaphosa announced a nationwide lockdown on March 23, which was followed up with a confirmation from South African state transportation provider Transnet the next day that ports would be closed to mineral exports from 10pm local time on March 26.
Transnet National Ports Authority, a division of Transnet, has since indicated it is trying to revoke that notice, according to a well-placed market source.
The SAMSA notice is largely irrelevant, however, since companies have already complied with the lockdown, which has halted logistics across the country, sources across a range of markets said. 
Cobalt
Cobalt producers operating in the Democratic Republic of Congo (DRC) will typically ship material out of the port of Durban for delivery to their customers in Asia.
April shipments from Durban are considered highly unlikely due to the lockdown, with uncertainty continuing into May. The spot market for seaborne cobalt hydroxide has dried up considerably, with sellers unwilling to offer for April and uncertain of the situation beyond that.
The practical restrictions, particularly the bottlenecks growing as a result of the lockdown, have reduced a number of port personnel, while the likelihood of being removed from a scheduled shipment in favour of essential goods, such as food or medical supplies, means cobalt intermediates suppliers are considering alternative shipping routes, such as out of Tanzania and Mozambique.
“It’s difficult to get confirmation of future shipment dates or even if a ship has sailed at all. The delays are up to three or four weeks already and this is just the start of it,” a source at a cobalt consumer said.
Chrome and manganese
Chrome and manganese producers will be unable to export material, even if they are technically allowed to, because they have neither the staff nor the transportation to move material to port, sources said.
All chrome and manganese producers approached by Fastmarkets confirmed that they were continuing to comply with the lockdown instructions, including placing mines on care and maintenance, while most have also declared force majeure on shipments.
“We are on full lockdown,” a senior source at one major mining company told Fastmarkets, adding that the notices have not changed producers’ approach to lockdown or their ability to export material.
Road and rail transportation is not available to producers and their workers have no transport, other chrome and manganese market sources confirmed.
“The SAMSA notice doesn’t mean anything as you can’t get permission to run trucks so you can’t get anything to the port,” a chrome mining source told Fastmarkets.
A second chrome market source agreed, adding that mine workers rely on bus transport to get to and from their sites.
“The notice doesn’t change anything. How will producers get material to the ports? How will miners get to work in lockdown? Who is going to drive the buses?” a chrome market source told Fastmarkets.
Two other manganese market sources confirmed their companies face the same constraints.
“Rail transport is not running for manganese shipments and there is no mining so there is zero chance of getting manganese out,” a manganese market source said.

Janie Davies

jdavies@fastmarkets.com

Charlotte Radford

charlotte.radford@fastmarkets.com

Published

Janie Davies

Charlotte Radford

April 02, 2020

11:58 GMT

London