Scrap metal theft: Crime is costing SA millions every day

Theft of copper, semifinished and nonferrous metals cost South Africa’s economy an estimated R130 million every day.

On an annual basis, this amount climbs to R47 billion – a figure far outweighing the physical value of the stolen goods.

This was revealed by Department of Trade, Industry and Competition Minister Ebrahim Patel, who said in a policy action media briefing on Wednesday scrap metal theft crippled rail transport and electricity output, in turn cutting production, inhibiting economic growth and stifling service delivery.

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SOEs cut off at the knees

State-owned enterprises such as Transnet, Eskom and the Passenger Rail Agency of South Africa (Prasa) are most adversely affected, as well as the mining sector, with theft significantly reducing output.

Patel said the findings, confirmed by independent research companies, did not take into account the loss and damage from other parts of the economy.

Minsiter of Public Entperises Pravin Gordhan said until November this year, 742km of Transnet cable had been stolen – a 30% improvement on the previous financial year.

This equates to R2 billion in lost revenue.

In total, South Africa has 30 000km of rail lines, much of it unused due to theft, among other issues.

R700 million has been lost along the northern line, a rail line transporting coal from Limpopo and Mpumalanga to Richards Bay, due to theft alone.

This despite additional funding provided by the mining industry to beef up security, including drones, to police the movement of coal.

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Limiting exports

Measures to restrict and regulate the trade of scrap and semifinished metals in a bid to quell criminal syndicates were adopted on 16 November, with legal work currently being implemented.

They will be gazetted on Wednesday.

It is hoped that limiting the export of certain products for six months will reduce the demand for stolen scrap metal. During this time, Patel said measures would be finalised to “better regulate trade”.

“Dampening demand” by restricting exports wil hopefully disincentivise people from stealing copper cables and selling it, he said.

Another strategy is to “focus on logistics and distribution networks to disrupt criminal syndicates”, Patel explained.

Scrap metal is generated in the course of “doing business”, and the industry faced shortages just two years ago. Patel said South Africa had historic challenges in accessing scrap metal for the domestic market.

But with syndicates running rife and significantly affecting infrastructure, Patel said government was clamping down.

With regards to copper, the export of waste and scrap will be banned for six months, after which a licensing system will be put in place for all copper trading.

ALSO READ: Cops recover stolen Prasa and Transnet copper cables worth R1.2 million

Ts and Cs

Sellers of copper waste and scrap will need to register under the Secondhand Goods Act, and applicants must present tax clearances, purchase and sales information.

Registered buyers will only be able to purchase scrap metal from registered sellers, and “incidental sales”, including those made by waste pickers, will not be allowed.

There are even plans to stop the use of cash when purchasing waste and scrap, and to only allow transactions to take plce through electronic transfers.

Exceptions for certain smaller categories of metal include stainless steel and aliminium.