Situation is particularly concerning for SA’s chrome exporters, says Minerals Council.
The closure of the Lebombo border post between South Africa and Mozambique, and the resultant disruption to cargo moving through the Maputo Port, has amounted to losses of approximately R5 billion so far, says Gavin Kelly, CEO of the Road Freight Association.
On Thursday, the Border Management Authority temporarily closed the border crossing into Mozambique following a new wave of protests that broke out around Maputo.
“The disruptions are currently mainly for cargo moving out of South Africa. We do know that various authorities have advised that transport companies should not attempt to cross into Mozambique,” Kelly says.
Hundreds of trucks carrying cargo, most notably chrome, have been stranded. South Africa is the world’s biggest chrome exporter.
Minerals Council South Africa says in an emailed response to Moneyweb: “The closure of the Lebombo border post used by trucks transporting South African minerals to the Maputo harbour for export is of particular concern for the chrome industry.”
ALSO READ: Lebombo border closed amid violent protests in Mozambique [VIDEO]
Of the 17.7 million tonnes of chrome ore and concentrate that South Africa exported in 2023 (which was an all-time high), 9.4 million, or 53%, was exported through Maputo.
“Importantly, by far the majority of that 9.4 million was trucked by road to Maputo.”
According to the Minerals Council, there are a few weeks of chrome inventory at the Maputo harbour.
“However, Grindrod has stopped port operations, which further constrains flows of chrome to overseas customers. A prolonged border closure of weeks rather than days will have a serious impact on South African chrome exports,” it says.
Besides the closure of Lebombo, the Port of Maputo also halted activity on Thursday and logistics group Grindrod subsequently announced on Sens that it would temporarily suspend its port and terminal operations in Maputo and Matola.
Grindrod’s share price shed over 4% on Thursday closing at R13.50.
“Shareholders are advised that following the closure of the Lebombo Border connecting South Africa and Mozambique, a suspension of rail operations, and to ensure safety of our employees, Grindrod’s port and terminal operations in Maputo and Matola are temporarily suspended,” the company noted.
“The situation will be assessed continually before any resumption.”
Grindrod’s terminal at the Maputo Port handles cargo volumes of approximately seven million tonnes, the group said previously.
ALSO READ: South Africa’s logistic troubles drive exporters to seek alternatives
Significance of the port to SA
The border and port closures come at a time when an increasing number of South African export businesses rely on Mozambique’s Port of Maputo to get their products to overseas markets.
The main reason Maputo is favoured among exporters is because of the ongoing logistical challenges at South Africa’s ports and railways.
The Port of Maputo has become a noteworthy competitor to South African ports, overtaking Durban in the World Bank’s container port performance index for 2023. It came in 329th out of 405 ports globally, while Durban was ranked 399th.
ALSO READ: Chaos at ports will cost the country, businesses and consumers
Post-election unrest
Mozambique has experienced violent demonstrations since its election results were announced on 24 October. The ruling party’s presidential candidate, Daniel Chapo, won 71% of the vote, extending the party’s 49-year rule.
The protests have intensified since Monday when protesters blocked the N4, which connects South Africa with Mozambique.
This article was republished from Moneyweb. Read the original here.
