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AUTOMOTIVE VOLVO TRUCKS GROUP TARGETS SA'S NEIGHBOURS FOR GROWTH (Engineering Weekly, 4/7/2013)

The Volvo Trucks group, which incorporates three truck brands, namely UD Trucks, Volvo Trucks and Renault Trucks,

aims to sell just over 6 000 trucks in 18 markets in Southern Africa in 2013, says Volvo Trucks Southern Africa regional

president Torbjörn Christensson. “We see most of the growth happening outside South Africa. The South African

market will either remain fairly flat, or show some small gains.” The Volvo Trucks group sold 5 612 trucks in Southern

Africa in 2012, which gave the group a 20.1% market share in South Africa’s heavy-duty market, and 18.3% in the total

South African truck market. The group should sell around 15% of its total regional sales, or around 900 units, outside

South Africa in 2013, says Christensson, up from 10% in 2012. Eventually the group hopes to increase sales outside

South Africa to 30% of total sales. Part of this growth will come from expanding the group’s footprint in Southern Africa

FAST MOVING CONSUMER GOODS SUGAR INDUSTRY CALLS FOR PROTECTION (Daily News, 4/7/2013)

The sugar sector has called for the protection of the local industry from excessive imports, which it claims are negatively

affecting crucial agricultural industries. In recent years there has been a renewed interest in sugar cane production on

communal land, with industry stakeholders expanding sugar cane production in these areas. Similarly, the state, and in

particular, the Department of Rural Development and Land Reform, is allocating an increasing percentage of its resources

to support communities residing on communal land such as the Ingonyama Trust Land in KwaZulu-Natal and state land in

Mpumalanga. As an industry, South Africa needs to develop sustainable strategies for small-scale grower projects that

are reflective of the rural development agenda. The projects need to encompass aspects dealing with food security, local

infrastructure development and institutional support programmes.

INTERMODAL

PRESSURE ON TO BUILD NEW DURBAN PORT (Mail and Guardian, 5/7/2013)

After completion, the Durban dig-out port will be the biggest in the southern hemisphere by far and will have three times the existing Durban port's capacity. With demand increasing, time is of the essence — but the project faces several potential delays and legislative hurdles are just one of them. Each year, more than 4  000 commercial vessels call at Durban, the busiest port in Southern Africa and, according to forecasts, container traffic is growing at 8% a year.

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The current yearly volume of container trade through Durban is 2.69-million 20-foot equivalent units (TEU) of cargo, which is expected to grow to between nine million and 12-million TEU by 2040. But the port is struggling to increase capacity to meet container handling and storage demand. "No matter what we do, at the existing Durban port we will get a maximum capacity of 4.8-million [TEU]," said Marc Descoins, programme director of the Durban dig-out port project, which is seen as the answer to a wider holistic plan of infrastructural investment.

IRON CHINESE DEMAND TO DRIVE AFRICAN IRON-ORE PROJECTS (Mining Weekly, 4/7/2013) An increasing dependency on iron-ore imports by China would present substantial opportunity for the intensified development of African iron-ore projects, the MSA Group geology operations manager Brendan Clarke said at the Geological Society of South Africa’s GeoForum conference on Thursday. China’s iron-ore import ratio was set to rise from 70% of total consumption to 85%, as local grades declined and the costs associated with the mining and beneficiation of lower-grade ores increased. While the Chinese government was a significant producer, Clarke believed that domestic producers offered an expensive, yet low-quality product. As a result, the country was the world’s largest importer of iron-ore, bringing in 58% of total production in 2012. The bulk of these imports were from the Pilbara region of Australia, accounting for 45% of imports. South Africa accounted for 6% of the iron-ore China sourced from outside the country in 2012. STEEL COPPER SLIPS FROM 2-WEEK HIGHS (Business Report, 4/7/2013)

Copper slipped from two-week highs on Thursday under pressure from a stronger dollar and as traders took to the

sidelines ahead of a key US jobs report. The dollar rose against the euro, with the single currency seen vulnerable before

a European Central Bank meeting where President Mario Draghi is likely to point to a weak euro zone economy and may

hint it needs more help. A strong dollar makes dollar-priced metals more costly for non-US investors. Copper prices have

rebounded around five percent from three year lows touched last week as China's buyers rushed to secure stock, sending

premiums to record levels and sparking talk of increased Chinese copper imports. But the market remains on guard after

a slew of weak macro data from China, the world's top copper consumer.

CONSTRUCTION, BUILDING MATERIALS & CEMENT Positive outlook for construction (Fin24, 4/7/2013) The construction confidence index in South Africa has fallen despite higher activity in the second quarter of this year. First National Bank and the Bureau for Economic Research jointly issued the report about the state of construction in the country. They said after rising to a four-year high of 51 index points in the firsts quarter, the construction confidence index shed six points to 45 in the second quarter. Confidence fell despite higher activity, but profitability came under some pressure. The report went on to say that even though confidence retreated somewhat in the second quarter, the rise in activity suggested that growth in the sector likely accelerated. In addition, the outlook for the construction sector has improved significantly and firms expect activity and profitability to increase notably in the third quarter.

COAL Demand for Southern African coal set to increase (Mining Weekly, 5/7/2013) Owing to expansion projects by Eskom and energy and chemicals group Sasol, the South African domestic demand for coal is expected to increase sharply over the next decade. To meet the increase in energy demand, Eskom is building two new power stations and has recommissioned another three power stations. Domestically, South Africa consumes almost 190-million tons a year of coal, which is expected to increase to 250-million tons a year in the next ten years, says Nyanjowa. “Eskom will require almost 200-million tons a year of coal by 2017, a significant increase from the 140-million tons a year the

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utility currently consumes.” Sasol, which accounts for almost 30% of the country’s trans- portation fuel requirements, is expanding the capacity of its synthetic fuels (synfuels) production plant, in Mpumalanga. The company’s expansion projects will result in the consumption of an additional 25-million tons of coal a year when the project is completed. This will expand Sasol’s synfuels manufacturing capacity, which will, in turn, reduce South Africa’s oil import bill and exposure to oil price hikes. Meanwhile, lower-quality thermal coal, traditionally used by Eskom for power generation, is being exported to India, China and the European Union (EU). This increased demand is because of South African coal having a low ash and sulphur content, explains Nyanjowa Introduction of sensor sorting technology in the coal industry imminent (Mining Weekly, 5/7/2013) Materials and minerals processing technology provider IMS Engineer-ing aims to introduce the dual-energy X-ray sorting system transmission (XSST) sensor-sorting technology to the local coal industry, following a batch test on the machines, which it hopes to complete soon. IMS Engineering business development manager Shannon McEwan says the technology was acquired from German separation technology expert Steinert Elektromagnetbau a year ago, following a formal joint venture (JV) agreement between the companies two years ago. IMS Engineering MD Paul Bracher says the JV was formed with Steinert Elektromagnetbau to undertake research in the local minerals industry to better develop applications for the technology. “We look forward to significant growth in the Southern African market, which is ideally suited to this technology,” he says. The technology can generally be used in a variety of applications, but IMS Engineering is investigating the best applicati on for the best efficiencies before it is industrialised locally. IMS Engineering assembled a test plant at its Kempton Park premises, in Ekurhuleni, to study the technology’s coal applications. Tests included the destoning of coal by separating the minerals from shale and stone. The technology also detects the pyrite or sulphur content of the coal. Limpopo coal mining operations threaten environment – hydrologist (Mining Weekly, 5/7/2013) The coal mining boom, in the Waterberg area of Limpopo, not only threatens the natural environment but also the scarce water resources and tourism industry of the province, mining consulting firm SRK Consulting’s Johannesburg- based principal hydrologist Peter Shepherd tells Mining Weekly. He believes that mines in the area need to properly plan their water management strategies, while taking into account the variable rainfall and dry spells of the region to avoid polluting the area. “South Africa needs the electricity that can be generated by the Waterberg’s coal, while the mining activities will provide much-needed jobs in the province. But we cannot afford more coal-related environmental problems, such as those experienced at the eMalahleni coalfields, where we have pollution from the coalfields entering the river systems either directly, through discharge points, or indirectly, through seepage,” says Shepherd. Further, he says that, to sustain the many mines that are likely to be developed in the coal-rich area, water will have to be piped in, either from treated sewage or from other river basins. This is because the natural run-off in the area is unable to supply the water demands of multiple mines.

Richards Bay’s coal exports are on track (Business Day Live, 4/7/2013)

STATISTICS released by the Richards Bay Coal Terminal (RBCT) for coal exports during last month reveal that total coal exports for the first half of the year are level with volumes shipped in the first half of last year. RBCT shipped 5.3-million metric tonnes of coal last month, bringing the year-to-date total to 33-million tonnes. In June last year, the terminal moved 5.5-million tonnes, which saw total exports of 32-million tonnes for the first half of last year. That points to annualised total coal exports for this year of 66-million tonnes, which would be lower than actual total exports for last year of 67.7-million tonnes.

South African junior coal miners increasing, challenges remain (Mining Weekly, 5/7/2013) South African junior miners had 7% of the local coal market, but were growing in numbers and production, mineral advisory firm XMP consulting senior coal analyst Xavier Prévost said at the Junior Coal Mining Conference held in Melrose, Johannesburg, in May. He noted that, as of 2012, South Africa had 34 junior coal miners. He further added that there were many challenges in the industry and that these companies and those that wished to enter the industry needed to under- stand coal so that their companies could be successful. One such challenge was pointed out by Emerald Green director

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Grant Wishart, who said that junior miners had to rely on external available expertise and that they would have to evaluate the reserves, as most of the quality reserves had been mined by larger coal miners, resulting in junior miners mining on fringe reserves. “Junior miners also do not have in-house expertise, whereas larger coal companies have in-house expertise and their geo-logy departments are stronger, compared with those of junior miners. It is important for junior miners to understand the fundamentals of the reserves because if the geology is wrong, it could be catastrophic,” he stated. In terms of reserve fundamentals, Wishart said South Africa did not have a mature exploration sector, compared with those of Australia and Canada. He advised junior miners to choose experts carefully and to hire geologists who had practical experience. It is also important to not overbudget or overcommit on a project or a contract, as miners may not produce their targeted tonnage. Equipment supplier expands coal sector offering (Mining Weekly, 5/7/2013) The offering of specialised equipment supplier Multotec to the coal sector is evolving in line with the latest trends emerging from end-user operations. Multotec site services GM Garth Jones says companies operating in the local and international coal sector form a major customer base for the company. In this sector, Multotec differentiates itself through its process and application knowledge, as well as its broad range of products focused on coal. “Central trends in this sector include the outsourcing of maintenance requirements through maintenance contracts, which are rapidly being regarded by customers as a value-added service to boost plant availability. The most recent development is the attempt to structure maintenance contracts on a rand-per-ton or cent-per-ton basis, enabling coal operators to predict their costs more accurately,” he notes. Jones points out another trend in the coal mining industry: “The complexity of the equipment is shifting quite rapidly into the suppliers’ arena. This is an efficient approach, since suppliers, such as Multotec, are specialists in the field and our technical support for the lifetime of the equipment frees up plant personnel to focus on core operations.”

GRAIN Maize falls as rand strengthens (Business Report, 4/7/2013)

South African corn futures declined as the rand gained against the dollar, making imports for the grain cheaper. White

corn for delivery in December, fell 0.5 percent to 2,277.80 rand ($226) a metric ton by the close on the South African

Futures Exchange. The yellow variety for delivery in September dropped 0.6 percent to 2,212.20 a ton. The rand gained

for the first time in four days as stocks and commodity prices rebounded before interest-rate decisions from the European

Central Bank and the Bank of England.

MINERAL MINING

Workers committees remain wild card in South African mining’s search for lasting peace and stability (Mining

Weekly, 5/7/2013)

Deputy President Kgalema Motlanthe has expressed strong confidence that all parties will honour the important new

framework for sustainable South African mining. It was the Deputy President himself who led the who’s who of South African

mining in the meticulous drawing up the framework’s draft on June 14. Now, in Motlanthe’s words, all stakeholders, including

the new Association of Mineworkers and Construction Union (AMCU), are on board (see also pages 8 and 9 of this edition of

Mining Weekly). However, the so-called workers committees could be a wild card. Motlanthe’s framework takes in organised

labour, but the workers committees fall in and out of organised labour at will, as they did in the platinum belt in the past,

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leading to the tragic Marikana killings. It was the workers committees that reacted so vigorously when National Union of

Mineworkers (NUM) shop stewards allegedly neglected their responsibilities to members on the platinum mines of the North

West province.

Mine development: Integrated approach needed to drive infrastructure development (Mining Prospectus, 3/7/2013)

The 2013 Investing in African Mining Indaba held in Cape Town earlier this year, provided compelling arguments in favour of a more integrated and sustainable approach to mining in Africa, with a view to unlocking the enormous growth potential on the continent, says GIBB general manager for Power and Energy Sector, Paul Fitzsimons. Now in its 19th year, the mining indaba provides a platform for various mining companies and projects to showcase their work in Africa and attract interest from the investment community. It is also an opportunity to highlight future trends in mining and for industry leaders to engage in robust debate around the socio-political and economic challenges the industry faces on the continent. Fitzsimons says despite these challenges, a more sustainable approach to mining has the ability to drive infrastructure and resource development on the continent, not only to the benefit of the mines, but also the communities they operate in.

TRANSNET

GE scoops two awards at the Transport Africa Awards dinner including Transport Supplier of the Year (The

Marketing Site, 4/7/2013)

The Transnet deal also marked an historic milestone of producing locomotives for Africa in Africa for the very first time in the

history of the continent, resulting in Africa being able to trade within Africa to procure world class locomotives thereby

strengthening the continent’s position as a fast growing emerging market.

Africa plans for 21st century port expansion at African Ports Evolution (Tralac Online, 5/7/2013)

A recent World Bank study demonstrates that the average cargo dwell time in most Sub-Saharan African ports is close to 20 days as compared to the average 4 days dwell time encountered in most large East Asian or European ports. Although Africa is poised to be one of the most strategic partners for trade and best bets for infrastructure investment in the 21

st

century, ports in sub-Saharan Africa still rank inefficient by global standards and lack sufficient capacity to meet growing cargo volumes forecast to arrive on Africa’s shores over the medium term. Capacity constraints are leading to increased port charges, elevated maritime freight costs, and increased congestion, adversely affecting the region’s export competitiveness. Ports authorities, terminal operators and corridor groups are now taking strides to combat inefficiencies and drive progress through regional collaboration. Not only are they advocating maritime development and increased port connectivity but they are also taking action to achieve demand driven expansion by attending African Ports Evolution

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Forum, taking place in Cape Town, South Africa from 26 to 28 August. Chief Executives from over 8 African ports are setting the pace for maritime expansion by sharing their expansion strategies and expertise, playing a more pivotal role than ever in the continent’s growth. Tau Morwe, CEO of Transnet National Ports Authority in South Africa and keynote speaker joins other Chief Executives such as Shekur Suntah, Director General of the Mauritius Ports Authority Osorio Lucas, CEO of the Maputo Corridor Development Company in Mozambique, Nancy Karigithu, Managing Director of the Kenya Maritime Authority and more to define the next wave of maritime industry expansion in Africa.

Baie vrae oor asbes-verslag (Volksblad Online, 4/7/2013)

Die sakekamer op die dorp glo Transnet en sy konsultante se omgewingsimpakverslag oor die moontlike storting van

asbes is onvolledig en daarom nie geloofwaardig nie. Dit volg op die ontevredenheid oor Transnet se aansoek om ’n

lisensie vir afvalbestuur om 560 000 ton asbes in twee leengroewe langs die dorp te stort. Raymond Swenson, voorsitter

van Besigheid De Aar, sê Transnet het nooit die weermag oor die ammunisiedepot naby die dorp geraadpleeg nie.

Hy sê die beoogde projek het die hele De Aar, van AWB tot ANC, laat saamstaan.

Transnet’s China rail deal runs into trouble (Business Day Live, 5/7/2013)

TRANSNET’s controversial R2.6bn contract with a Chinese firm to build electric locomotives is up to six months behind schedule, raising questions about South Africa’s preference for doing business with China to advance its Brics ambitions. The contract perplexed the rail industry when it was awarded last October, and reported in Business Day at the time — especially as Transnet overlooked established European train companies, saying the Chinese had agreed to "a tight delivery schedule". China South Rail (CSR) is hoping to win a much bigger Transnet contract to supply 599 electric locomotives and 465 diesel ones in a deal worth about R35bn. CSR’s Zhuzhou Electric Locomotive Company let slip on Thursday that it would not be able to deliver the locomotives until possibly June next year, despite the two parties having agreed on a December delivery date. The 95-locomotive contract was awarded to CSR even though the company did not at the time have a locomotive with the specific configuration required.

Why Does Cargo spend weeks in Sub-Saharan Port? Lessons from six countries (World Bank Online) GENERAL

Global value chains and Aid for Trade: An African perspective (Tralac Online, 5/7/2013)

Although global value chains (GVCs) have existed for decades now, interest in the literature has reignited in recent years, particularly since the global financial crisis. Policy makers have sought to better understand the dynamics and governance of GVCs as well as the opportunities and constraints that this type of trade poses for firms in the various stages of participation. Since the fragmentation of production means that global trade is now characterised by trade in tasks, it is important for policy makers in sub-Saharan Africa (SSA) to identify potential GVCs in which they can effectively participate, as well as obtain a better position within existing GVCs and improve outcomes overtime.

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Rand strengthens after surprise market guidance out of Europe (Business Day Live, 5/7/2013)

THE rand strengthened against the euro on Thursday afternoon after a surprise forward guidance by the Bank of England (BoE) and the European Central Bank (ECB), indicating that rates would be kept low for longer than expected. The BoE, led by new governor Mark Carney who took over the reins from Mervyn King on Monday, left both the bank rate and quantitative easing unchanged, as expected. The bank rate remained at 0.5%, while quantitative easing was still at £375bn, Dow Jones Newswires reported. The ECB base rate was also left unchanged at a record low of 0.5%. "The rand strengthened nicely on comments after the rates announcements, signalling that they are going to keep rates low. Everything strengthened against the euro after that," a local currency trader said.

CURRENCIES AND PRICES

MARKETS AND INDICATORS

JSE

Alsi 4/07 40,030

+ 686.88 + 1.75%

Financials 4/07 30,068

+ 552.74 + 1.87%

Industrials 4/07 41,080

+ 727.77 + 1.80%

FOREX

Rand/Dollar 07:19 10.0415

- 0.02 - 0.18%

Rand/Pound 07:20 15.0857

- 0.28 - 1.84%

Rand/Euro 07:20 12.9607

- 0.15 - 1.13%

COMMODITIES

Gold (usd/oz) 07:23 1,243.42

+ 0.02 + 0.002%

Platinum (usd/oz) 07:22 1,329.25

- 9.75 - 0.73%

Brent (usd/barrel) 07:18 105.46

- 0.30 - 0.28%

World Markets

Wall St (DJIA) 3/07 14,989

+ 56.14 + 0.38%

Germany (DAX) 4/07 7,994

+ 83.54 + 1.06%

Japan (Nikkei) 07:12 14,268

+ 248.59 + 1.77%

(Business Report, 5/7/2013)

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(Business Report, 05/7/2013) COPPER A – SETTLEMENT PRICE – 6920,5 FORWARD RATES - Dollar/rand 4pm close: R10.0055

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Petrol/ Diesel Price

YR2013 02-Jan-13

06-Feb-13

06-Mar-13

03-Apr-13

01-May-13

05-Jun-13

03-Jul-13

07-Aug-13

04-Sep-13

02-Oct-13

06-Nov-13

04-Dec-13

COASTAL

95 LRP (c/l) 1151.00 1192.00 1273.00 1283.00 1210.00 1202.00 1286.00

95 ULP (c/l) 1151.00 1192.00 1273.00 1283.00 1210.00 1202.00 1286.00

Diesel 0.05% (c/l) 1086.67 1104.47 1162.85 1170.01 1114.45 1110.47 1188.67

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Diesel 0.005% (c/l)

1091.07 1108.87 1167.25 1175.41 1118.85 1114.87 1193.07

Illuminating Paraffin (c/l)

807.128 833.128 890.128 860.328 802.328 803.328 878.328

Liquefied Petroleum Gas (c/kg)

2047.00 2120.00 2238.00 2183.00 2102.00 2107.00 2236.00

GAUTENG

93 LRP (c/l) 1165.00 1206.00 1287.00 1297.00 1224.00 1216.00 1300.00

93 ULP (c/l) 1165.00 1206.00 1287.00 1297.00 1224.00 1216.00 1300.00

95 ULP (c/l) 1186.00 1227.00 1308.00 1320.00 1247.00 1239.00 1323.00

Diesel 0.05% (c/l) 1111.37 1129.17 1187.55 1196.61 1141.05 1137.07 1215.27

Diesel 0.005% (c/l)

1115.77 1133.57 1191.95 1202.01 1145.45 1141.47 1219.67

Illuminating Paraffin (c/l)

849.028 875.028 932.028 906.228 848.228 849.228 924.228

Liquefied Petroleum Gas (c/kg)

2229.00 2302.00 2420.00 2365.00 2284.00 2289.00 2418.00

(SAPIA Online)

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