Scrap metal dealers battling

[caption id="attachment_40263" align="alignright" width="405"] GETTING SCRAPS: Sidwell Scrap Metals owner Bertie Williams and his son, Shawn, who is also the manager of the company, claim they have been cut off from their overseas markets due to the establishment of a new steel melting plant at Coega. Picture: MORNE DU RANDT[/caption]

PRIMARY scrap metal dealers in Port Elizabeth claim they are being crippled by the beneficiation of scrap metal in the region.

Sidwell Scrap Metals owner Bertie Williams said particularly the smaller scrap dealers had over the past three months battled to get their scrap to export markets, mainly due to the local beneficiation that was brought about with the establishment of the steel melting facility at Coega, Agni Steels SA.

In a letter Williams addressed to the International Trade Administration Commission of South Africa (Itac), he said business had gone "dead quiet after our exporters withdrew their containers".

However, some bigger companies in the city still export their scrap metal.

The beneficiation involves Itac's directive to facilitate the supply of 10000 tons of scrap metal per month for the mini-steel melting plant, Agni Steels SA, before the region's scrap is allowed to be exported.

Williams, who has been in the scrap metal business for 20 years, said: "We demand a level playing field. Secondly, Agni Steels should become fairer in their pricing."

He said he could not keep his staff complement of four casual and 25 full-time employees, and that many other scrap metal dealers – who together employed at least 300 people in the city – faced the same situation.

Another scrap metal dealer, who did not want to be named, confirmed that finding export markets had become a lot more difficult but said he did not want to become involved in "politics".

An export agent also confirmed that it was tougher for smaller scrap metal dealers to get export permits, but said the industry had agreed to the policy set by government.

Williams's son, Shawn, said export prices for scrap metal averaged R3 to R3.30 per kilogram but the price they were offered domestically was R2.70/kg, depending on the different grades and types of scrap metal being sold.

Previously overseas-based companies would pay in advance for the scrap metal to be collected in containers and exported, mostly to India and China.

"We do not have a problem with Agni Steels but the problem is they want to eat alone," Williams said.

However, Agni Steels SA director Hassan Khan said that with a direct equity by the more than 200 blue collar workers into the R400-million steel plant, the company was most definitely "sharing the cake".

Khan explained that previously scrap metal would be sold at roughly R3/kg to overseas markets and re-imported into the country at R12/kg by the local steel manufacturers, many of which had to close down because they could not compete with the cheaper steel imports.

"Government introduced the beneficiation regulation in order for resources to not leave the country and then be re-imported. The beneficiation regulation was advertised countrywide with a public participation process and was done in a fair manner. The scrap metal dealers were given a fair opportunity to abide by these government regulations."

Khan said government determined the prices Agni Steels SA should pay local dealers, based on the different grades of scrap metal and international prices.

Itac import and export control senior manager Phillip Snyman said permits for the export of scrap metal from the Eastern Cape were still being issued.

"No distinction is made between small or large dealers as there are specific criteria that all exporters must comply with." He said government issued Itac with a directive to "regulate the exportation of ferrous and non-ferrous waste and scrap by not allowing the exportation thereof unless it has first been offered for local consumption to domestic consumers of scrap metal for a period of time and at a price discount determined by Itac".

The ultimate goal was to ensure there was a steady supply of quality scrap metal to local users, at a price that was reasonable, to support the local industry, he said. - Cindy Preller