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South Africa - State to Delay Limit on Exports of Scrap Metal

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THE government has agreed to delay export restrictions on <link _top>scrap metal because of the potential implications of such a ban.

The National Recyclers Organisation said the agreement was reached during a meeting with trade and industry department officials. The department will now await the findings of an independent study on the <link _top>scrap metal value-chain.

In an apparent reaction to soaring steel prices, and evidence of price-fixing in the industry, trade and industry minister Mandisi Mpahlwa in July said the government was considering limiting <link _top>scrap metal exports. This in a bid to ease input costs on downstream manufacturing.

The measures were to have included the introduction of export taxes.

The planned export clampdown followed an investigation by competition authorities which exposed a cartel in the <link _top>scrap metal industry. The Reclamation Group agreed to a R146m fine for its part in price-fixing.

Steps had already been taken to tighten the export of <link _top>scrap metal , with the International Trade Administration Commission publishing a notice in the Government Gazette, notifying industry that an export permit was needed for the export of a host of <link _top>scrap metal products.

These include ferrous waste and <link _top>scrap, refined copper wire bars and billets, copper-zinc <link _top>base alloys, copper waste and <link _top>scrap, nickel waste and <link _top>scrap, aluminium waste and <link _top>scrap, lead ingots, lead waste and <link _top>scrap, lead plates, sheets, strip and foil, zinc waste and <link _top>scrap and tin waste and <link _top>scrap.

However, the National Recyclers Organisation said export restrictions could have severe implications for the formal metal recycling industry, and also for thousands of informal traders who make a living from collecting and selling <link _top>scrap metal.

The organisation met with the trade and industry department to discuss these concerns and its chairman, Sello Mahlangu, yesterday said that the department had agreed to delay the imposition of export restrictions on ferrous and non ferrous <link _top>scrap metal "until an informed decision could be taken, in partnership with industry".

The original call for restrictions on <link _top>scrap metal exports came from <link _top>scrap metal consumers, but Mahlangu said his organisation felt there was no substance to the call, which was motivated for on a purported shortage of <link _top>scrap.

"There is, in fact, no <link _top>scrap shortage, and the motivation of consumers is price driven," Mahlangu said.

"At the outset, the government and industry need a precise understanding of metal availability, taking into account supply and demand statistics, and the nature of the industry, and then the result of what might happen if restrictive tariffs were to be imposed."

The organisation has now commissioned an independent consultant to study the ferrous and non ferrous <link _top>scrap metal value-chain. It will also look at total employment in both the formal and informal sectors, and the effect <link _top>scrap metal restrictions would have on employment.

Several countries, including China and India, have introduced some measures to restrict the export of <link _top>scrap metal.

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