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COMMODITY NEWSBRIEFS: 06 MAY 2013 

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AUTOMOTIVE 

VOLKSWAGEN SA BOOST FOR SMALL BUSINESSES (Industry SA, 06/06/2013) 

Volkswagen Group South Africa’s (VWSA) multimillion rand project that is aimed at boosting local small businesses is 

yielding encouraging results. The Uitenhage based Volkswagen Business Support Centre was established in April 2011 in 

partnership with small business incubator company, Raizcorp and has 20 beneficiaries from Nelson Mandela Bay. The 

small businesses receiving training and guidance from the centre have, on average, improved their turnover by almost 

50% and grown their employee base by more than 30%. VWSA has invested R10 million in the past two years and has 

further committed R5-million per annum for the first three years of the centre’s operation. The beneficiaries’ combined 

economic contribution stands at almost R35 million per annum. VWSA Managing Director, David Powels said the 

success of the project was in keeping with the company’s Corporate Social Investment (CSI) goals. “The key principles 

guiding us in deciding which projects to support are that they must be holistic, comprehensive and sustainable,” said 

Powels. “The success of the businesses at the centre will have a broader benefit for the Eastern Cape province, which at 

the moment has the third highest rate of unemployment in South Africa.” According to the Quarterly Labour Force Survey 

released by Statistics South Africa this month, unemployment in the Eastern Cape has risen from 29.8% to 30.2%. The 

businesses supported by the centre employ over 140 people. The employees – excluding the business directors – in turn 

support nearly 440 dependents. 

INDUSTRIAL 

INDUSTRY IN SLOWDOWN (Financial Mail, 06/06/2013) 

SA's catalytic converter industry, once responsible for 16% of global production, will hit a wall over the next two or three 

years when a new EU regulation kicks in. Thousands of jobs may be at stake. Euro 6 is the common name for European 

emissions standards coming into effect for passenger cars in the bloc on September 1 2015. But, according to one 

insider, the local industry has seen "no upgrades or investments of consequence" to meet this specification. This is an 

extraordinary fact but few people will speak on the record. The reason, rumour has it, is that the industry is reaching for 

one last lifeline that might save it, and doesn't want government upset by reports in the media. SA has by far the largest 

reserves of platinum and palladium, metals crucial to the catalytic converter industry. It is also hard to imagine a better 

example of beneficiation, which trade & industry minister Rob Davies has repeatedly said is central to industrialisation. 

And, at a time when the motor industry is enjoying huge government support , one would expect the catalytic converter 

industry to be propped up too. 

FUEL 

Transnet Freight Rail News Briefs Page 1 of 9

PETROL PRICE SHOCKER ON THE CARDS (News24, 06/06/2013) 

The petrol price relief could be short-lived and motorists could be paying almost R1 more for fuel, according to Business Day. 

The agency reported on Wednesday that the petrol price could again breach the R13/l mark. The under-recovery on 95 

octane petrol is currently 86 cents a litre 9 (c/l) and 77c/l on diesel. If this continues by June 28 then motorists will be in for a 

surprise. The final over- or under-recovery number is calculated on the last Friday of the month, and the adjustment 

implemented from the first Wednesday of each month. The price of petrol might go up by 90c, according to the Automobile 

Association (AA). Public affairs director Gary Ronald told the agency that there are three weeks to try to claw back the underrecovery. 

He said that for the petrol price to remain unchanged, the rand will need to regain to about R9.20/$, if oil remains at 

$100/barrel. 

CONSTRUCTION, BUILDING MATERIALS & CEMENT 

BUILDING A THREAT TO HOME PRICES (Business Report, 06/06/2013) 

The number of flats and townhouses completed last year ballooned by 51.4 percent year on year. This posed a potential 

threat to house price growth, Standard Bank warned yesterday. It attributed the strong growth partly to base effects 

following four years of declining growth. But Sibusiso Gumbi, a research strategist at Standard Bank, said yesterday that 

strong building activity might emerge as an additional source of downside pressure on house prices in the future if these 

building trends were not met by adequate demand. Gumbi said the real value of completed residential buildings increased 

by 6.6 percent year on year in the first quarter of this year from minus 0.8 percent in the fourth quarter. In addition, 825 

houses of 80m² or less were completed in the first quarter, a 20.8 percent improvement on the corresponding quarter last 

year. Gumbi said construction of flats and townhouses was also robust, with a 12 percent year-on-year improvement in 

the first quarter. In the first quarter, 162 fewer dwellings larger than 80m² were completed, which represented a 5.8 

percent year-on-year contraction, he said. 

LAFARGE ASSIST IN BUILDING TRANSPORTATION HUB (Industry SA, 05/06/2013) 

Bloemfontein CBD’s taxi rank had fallen into disrepair, prompting the Mangaung Metropolitan Municipality to develop a 

modern transport hub. Designed to provide commuters with integrated taxi and bus ranks sheltered from the elements, 

the double storey building also includes offices, shops and restaurants. Lafarge South Africa supplied a range of building 

material solutions for the project, including waterproof ready-mix concrete, durable paving mix with fibers, mortar and 

plaster mixes. Lafarge South Africa is the local subsidiary of the international Lafarge Group, a world leader in building 

materials. The Group’s unequaled technical strength is employed to develop innovative products and services to help 

create better urban environments for people and better connected, more durable cities. A vision of a better city, built with 

the help of innovative materials has replaced the traditional kerbside shelters for catching taxis with a desirable place for 

commuters to gather. It also provides a more efficient means for taxis to satisfy the transport needs of their customers. 

COAL 

STRAPPED FOR CASH: JUNIOR COAL MINERS (Financial Mail, 06/06/2013) 

Eskom wants to contract more than a billion tons of coal over the next 40 years from black-owned companies, which 

ought to stimulate the junior mining sector. There are several examples of listed junior miners who have built up their 

businesses partly by selling to Eskom, including Keaton Energy, Wescoal, Continental Coal and Coal of Africa. Grant 

Wishart, a technical adviser with diversified consulting group Emerald Green, told the Fossil Fuel Foundation's junior coal 

mining ventures conference last week that not only did Eskom favour junior coal miners with high levels of black 

empowerment participation, there could even be potential funding from the Development Bank of Southern Africa for 

companies that were fully compliant with all requirements. Finding financiers to bankroll BEE coal ventures is a huge 

challenge. Wishart said some companies had raised money on stock exchanges but as far as bank financing was 

concerned, junior coal miners with small reserves were regarded as high risk. The most common source of funding was 


advances from coal traders, but this was mainly offered for export quality coal, and tended to be based on good 

relationships. 

NO DEADLOCKS IN XSTRATA TALKS: AMCU (The New Age, 05/06/2013) 

There was no deadlock in talks with Xstrata coal mine management regarding the case of dismissed workers, the 

Association of Mineworkers and Construction Union (AMCU) has said. The company dismissed about 1, 000 employees 

who downed tools embarking on an illegal strike last week, to show solidarity with an AMCU member who accused a shift 

supervisor of assault. The affected sites included Helena, Magareng and Thorncliffe in Limpopo. AMCU national organiser 

Dumisani Nkalitshane said they were waiting for management’s response on their position that the workers appeal their 

dismissals collectively, through AMCU. The company, however, wanted the workers to appeal individually, said Nkalitshane. 

“Now that’s where the problem is. Some of the workers can’t read nor write… They must be represented by a union,” he 

said. 

Link to McCloskey Coal Fax – Issue 634 

Link to McKloskey SA Coal Report – 4 June 2013 

Link to McKloskey Coal Report – Issues 311 

GRAIN 

NORTH WEST FARMERS BATTLING DROUGHT (Sowetan, 06/06/2013) 

Farmers in the central part of North West province have suffered damages amounting to almost R2 billion due to the 

prevailing drought conditions, Beeld reported. In the western part of the province, farmers were even worse off, Agri North 

West CEO Boeta du Toit, said." As the harvest comes in, it's becoming obvious that our farmers are even worse off than 

we previously thought. In the central part of the province, farmers have lost more than 50 percent of their maize crop." Du 

Toit said damage to the province's sunflower crop was about the same, and in the western parts, many livestock farmers 

had been forced to reduce their herds at lower prices. "In addition to the situation with poor or no crops, farmers' input costs 

over the past year increased by 19 percent, not including the more than 50 percent increase in the minimum wages of farm 

workers. 

MINERAL MINING 

PWC: MINING FACES GLOBAL CRISIS (IOL, 05/06/2013) 

The global mining industry is facing a market confidence crisis, a PricewaterhouseCoopers (PwC) report has found. 

“While 2012 saw mining stocks fall slightly, they fell nearly 20 percent in the first four months of 2013,” PwC said in a 

statement on Wednesday. “According to (the)...report, the industry faces a confidence crisis. Confidence over whether 

costs can be controlled, return on capital will improve and commodity prices will not collapse, among others.” The report 

analysed 40 of the largest listed mining companies in major economies, including the United Kingdom, the United States, 

Canada, Australia, China, Russia, India, Brazil, Poland, Mexico and South Africa. It found that global mining revenues 

levelled at US$731 billion, and net profits were down by 49 percent, to US$68bn. With regards to “total market 

capitalisation” gold miners in the top 40 lost US$29bn in 2012, while in the first four months of 2013, they lost a further 

US$58bn in value. It found that since April 2012, half of the chief executive offices had been replaced at the largest 10 

mining companies. 

SOUTH AFRICA CAN’T GET AWAY WITH JUST 'DIGGING DIRT' – PAUL JOURDAN (Mining Weekly, 05/06/2013) 

While Australia could get away with mining minerals and exporting them without paying attention to local value addition, 

South Africa could not, independent South African mineral policy analyst Paul Jourdan told the International Mining and 

Metals third African Iron Ore conference here. With its far larger population and far fewer square kilometres, South Africa 

had no option but to concern itself with mineral beneficiation, which he defined as the total domestic value addition 

embodied in the final exports, excluding all imported inputs. “Australia can dig dirt for the next 200 to 300 years, and they’ll 


e fine,” he said. But South Africa, at one-sixth of Australia’s size and with nearly three times its population, was 

compelled to introduce ore beneficiation strategies for mineral value chains and resource-based industrialisation. 

TRANSNET 

MARITIME SCHOOL OF EXCELLENCE FOR DURBAN (IOL, 05/06/2013) 

The terminal buildings of the old Durban International Airport are being transformed into a Maritime School of Excellence. 

Transnet group chief executive Brian Molefe said the plan was to develop critical maritime skills locally and in the 

southern African region before developments such as the Durban dig-out port. Transnet bought the site from the Airports 

Company of South Africa in a R1.8 billion deal last year. The dig-out port will take up much of the prime site. Molefe spoke 

to The Mercury after Transnet National Ports Authority chief executive Tau Morwe cited the project at the recent African 

Renaissance conference in Durban. The initiative was part of government strategy for South Africa to leverage off its long 

coastline and many ports to develop the country into a global player in the maritime industry. 

BID FOR A BIGGER BITE (Financial Mail, 06/06/2013) 

Minister of public enterprises Malusi Gigaba is spearheading a campaign to ramp up economic reform by boosting the 

preferential access black-owned businesses have to government contracts, especially those associated with the state's 

R827bn infrastructure drive. The state-owned companies (SOC), which Gigaba oversees, will spend the bulk of this 

budget over the next three years. They will be investing R113bn in infrastructure in the coming financial year. Gigaba is 

pushing for national treasury to change its preferential procurement regulations so black-owned firms are further 

advantaged by even higher empowerment weightings. He also wants SOCs to be allowed to build "set-asides" into 

tenders, which would mean only black-owned firms could bid for specific parts of the contract. Treasury believes that setasides 

are unconstitutional and, in 2006, issued a practice note prohibiting them. But Gigaba disagrees, and has the 

powerful backing of black business. His campaign has been bolstered by the findings of President Jacob Zuma's review of 

SOCs. 

FOLLOWING FLOP, TRANSNET PLANS INFLATION-LINKED BONDS (MoneyWeb, 5/6/2013) 

Transnet SOC, South Africa’s state-owned rail and ports operator is considering a sale of long-term inflation-linked debt to 

match the lifespan of some of its assets. “We will like to further match our assets and liabilities,” Transnet Chief Financial 

Officer Anoj Singh said. “Our assets are very long dated, lasting 60 years for example.” Transnet plans to raise R15.6 

billion in the fiscal year ending March 2014 to invest in new infrastructure, Singh said. The company plans to tap the 

domestic market for 60% of the amount and the difference from foreign sources. 

GENERAL 

BUILDING A THREAT TO HOME PRICES (Business Day, 06/06/2013) 

South Africa has achieved the highest economic integration score among 11 sub-Saharan African countries, according to 

an index compiled by Visa, but this reflects its links to the rest of the world rather than the continent. The Visa African 

Integration index launched on Wednesday showed the region was lagging the world in terms of economic integration, 

which is seen as a powerful driver of a sustained and more inclusive improvement in growth. South Africa scored 63.3 

against a global median of 100, up from 61.1 two years ago and well ahead of the other 10 countries covered by the 

index, which were Mozambique, Zambia, Zimbabwe, Angola, Ghana, Nigeria, Kenya, Uganda, Rwanda and Tanzania. 

ON EDGE: ECONOMIC OUTLOOK (Financial Mail, 07/06/2013) 

From the opening days of 2013 it was clear that this was going to be a watershed year for the SA economy. Either SA 

was going to take real strides towards delivering faster economic growth through decisive policies or leadership or it would 

continue its downward slide. Earlier this year, (Cover Story March 1-6) the FM asked whether SA was on a slippery slope 

to becoming a sub-investment grade country. We concluded that though it would take deterioration over several years for 

SA to move from investment grade to speculative grade, unless SA found a way to accelerate growth and make it more 


labour-intensive, the country faced a slow, grinding descent from mediocrity to marginalisation - or worse. But though we 

were decidedly bearish, we didn't expect things to unravel this quickly. 

CURRENCIES AND PRICES 

MARKETS AND INDICATORS 

JSE 

Alsi 09:10 40,725 - 68.43 - 0.17% 

Financials 09:10 30,278 - 121.18 - 0.40% 

Industrials 09:10 41,011 - 304.02 - 0.74% 

FOREX 

Rand/Dollar 09:09 10.0352 + 0.21 + 2.14% 

Rand/Pound 09:10 15.4598 + 0.44 + 2.93% 

Rand/Euro 09:10 13.1652 + 0.31 + 2.41% 

COMMODITIES 

Gold (usd/oz) 09:08 1,392.80 - 8.20 - 0.59% 

Platinum (usd/oz) 09:09 1,501.50 - 1.50 - 0.10% 

Brent (usd/barrel) 09:08 103.11 - 0.13 - 0.13% 

World Markets 

Wall St (DJIA) 5/06 14,961 - 216.95 - 1.43% 

Germany (DAX) 09:08 8,204 - 91.96 - 1.11% 

Japan (Nikkei) 08:28 12,904 - 110.85 - 0.85% 

(Business Report, 06/06/2013) 

ALL SHARE INDEX 

(Business Report, 06/06/2013) 

COPPER A – SETTLEMENT PRICE – 7421, 5 

FORWARD RATES - Dollar/rand 4pm close: R9, 8921 



Petrol/ Diesel Price 

02-Jan- 

06-Feb- 

06-Mar- 

03-Apr- 

01-May- 

05-Jun- 

03-Jul- 

07-Aug- 

04-Sep- 

02-Oct- 

06-Nov- 

04-Dec- 

YR2013 

13 

13 

13 

13 

13 

13 

13 

13 

13 

13 

13 

13 

COASTAL 

95 LRP (c/l) 1151.00 1192.00 1273.00 1283.00 

95 ULP (c/l) 1151.00 1192.00 1273.00 1283.00 

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

Diesel 0.005% (c/l) 1091.07 1108.87 1167.25 1175.41 

Illuminating Paraffin (c/l) 807.128 833.128 890.128 860.328 

Liquefied Petroleum Gas 

(c/kg) 2047.00 2120.00 2238.00 2183.00 

GAUTENG 

93 LRP (c/l) 1165.00 1206.00 1287.00 1297.00 

93 ULP (c/l) 1165.00 1206.00 1287.00 1297.00 

95 ULP (c/l) 1186.00 1227.00 1308.00 1320.00 

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

Diesel 0.005% (c/l) 1115.77 1133.57 1191.95 1202.01 

Illuminating Paraffin (c/l) 849.028 875.028 932.028 906.228 


(c/kg) 2229.00 2302.00 2420.00 2365.00 

03-Jan- 

01-Feb- 

07-Mar- 

04-Apr- 

02-May- 

06-Jun- 

04-Jul- 

01-Aug- 

05-Sep- 

03-Oct- 

07-Nov- 

05-Dec- 

YR2012 

12 

12 

12 

12 

12 

12 

12 

12 

12 

12 

12 

12 

COASTAL 

95 LRP (c/l) 1031.00 1065.00 1093.00 1159.00 1187.00 1132.00 1047.00 1069.00 1162.00 1185.00 1175.00 1166.00 

95 ULP (c/l) 1031.00 1065.00 1093.00 1159.00 1187.00 1132.00 1047.00 1069.00 1162.00 1185.00 1175.00 1166.00 

Diesel 0.05% (c/l) 1007.29 1006.29 1016.67 1064.27 1073.67 1048.85 986.270 1000.89 1069.89 1109.05 1119.25 1114.25 

Diesel 0.005% (c/l) 1012.69 1010.69 1020.07 1069.67 1078.07 1053.25 991.670 1007.29 1076.29 1116.45 1125.65 1119.65 

Illuminating Paraffin (c/l) 752.528 749.528 753.528 774.128 783.128 762.128 704.128 719.128 792.128 825.128 828.128 824.128 


(c/kg) 1939.00 1989.00 2025.00 2093.00 2124.00 2025.00 1912.00 1964.00 2093.00 2090.00 2091.00 2056.00 

GAUTENG 

93 LRP (c/l) 1043.00 1077.00 1105.00 1177.00 1205.00 1150.00 1061.00 1083.00 1176.00 1197.00 1187.00 1178.00 

93 ULP (c/l) 1043.00 1077.00 1105.00 1177.00 1205.00 1150.00 1061.00 1083.00 1176.00 1197.00 1187.00 1178.00 

95 ULP (c/l) 1061.00 1095.00 1123.00 1194.00 1222.00 1167.00 1082.00 1104.00 1197.00 1220.00 1210.00 1201.00 


Diesel 0.05% (c/l) 1027.69 1026.69 1037.07 1088.00 1098.37 1073.55 1010.97 1025.59 1094.59 1133.75 1143.95 1138.95 

Diesel 0.005% (c/l) 1033.09 1031.09 1040.47 1094.37 1102.77 1077.95 1016.37 1031.99 1100.99 1141.15 1150.00 1144.35 

Illuminating Paraffin (c/l) 788.428 785.428 789.428 816.028 825.028 804.028 746.028 761.028 834.028 867.028 870.028 866.028 


(c/kg) 2121.00 2171.00 2207.00 2275.00 2306.00 2207.00 2094.00 2146.00 2275.00 2272.00 2273.00 2238.00 

(SAPIA online) 

Daily prices for 05/06/2013 

LME Official Prices, US$ per tonne 

Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC 

Cash Buyer 1820.00 1938.50 7421.002246.0015250.0021075.001924.501870.00 

Cash Seller & Settlement 1830.00 1939.00 7421.502246.5015255.0021100.001925.001871.00 

3-months Buyer 1850.00 1966.50 7460.002244.0015335.0021095.001957.501900.00 

3-months Seller 1860.00 1967.50 7460.502244.5015340.0021100.001958.001905.00 

15-months Buyer 21145.00 

15-months Seller 21195.00 

Dec 1 Buyer 1940.00 2083.00 7560.002265.0015610.00 2057.002035.00 

Dec 1 Seller 1950.00 2088.00 7570.002270.0015710.00 2062.002045.00 

Dec 2 Buyer 2165.00 7630.002305.0015850.00 2115.00 

Dec 2 Seller 2170.00 7640.002310.0015950.00 2120.00 

Dec 3 Buyer 2253.00 7695.002345.0016025.00 2125.00 

Dec 3 Seller 2258.00 7705.002350.0016125.00 2130.00 

(London Metal Exchange, 06/6/2013) 

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