South Africa is suffering an unmitigated “copper catastrophe” – fuelled by infrastructure theft, sky-high copper prices and many scrap dealers exporting the red metal for huge profits – to the extent that legitimate copper users cannot find any to buy legally in the country.
South Africa’s vast investment into electricity infrastructure over generations is being systematically stolen, smelted down into ingots and billets, and then exported with impunity by many scrap metal dealers who continue to turn a blind eye to the origin of what they buy.
That’s the view of the Copper Development Agency: Africa (CDAA), a stakeholder in planning counter-strategies with the SA Government for years on the illicit copper economy, as well as monitoring both official action and inaction on the issue.
Copper expert and CDAA acting chair Evert Swanepoel estimates the damage to the SA economy as being worth at least R8 billion per annum.
“There really is a copper crisis and catastrophe in full swing in South Africa at the moment and our members cannot even buy copper in the country – it must be imported at incredible cost – and that whilst tonnes of stolen copper is smelted and exported under the noses of the government, police, port authorities and the SA Revenue Service (SARS).”
“The worst is that the stolen copper export boom – as beneficial as it is to the scrap metal industry at present – is fuelling theft and infrastructure degradation at a catastrophic rate from municipalities and utilities throughout SA.”
Swanepoel said copper cables are in demand because they are already 99% pure copper and thus far easier to smelt down and turn into ingots for export at minimum cost whilst maximising profits for some scrap dealers.
He added that whilst SA seems to be on the cusp of solving the load shedding crisis, de facto black-outs would still plague many at municipal level due to the increase theft of copper cables and transformers at grass-roots level.
“What we could likely find after a mammoth institutional effort to get Eskom working again, is that electricity distribution challenges brought about by cable and transformer theft will be magnified to cause widespread de facto load shedding instead,” warned Swanepoel.
Damage to the electricity supply caused by thieves stealing copper cables has not only increased the
The Global Initiative Against Transnational Organized Crime (GI-TOC)
costs incurred by national and municipal power utilities, but has also placed an additional burden on
businesses, residents and service providers already grappling with scheduled rolling blackouts, known
locally as load shedding
Government strategies have been counter-productive and have not addressed core issues such as scrap cash sales which drive copper theft, and taxing copper exports.
A scrap metal export ban aimed at reducing both copper theft from SA’s crumbling infrastructure and the export of stolen copper was not successful and was not renewed at the beginning of 2024.
Yet the unrelenting lava flow of the illicit red metal out of South Africa – Africa’s most developed economy – happens without government even attempting to tax the metal tsunami leaving the country, said Swanepoel.
With copper prices on the international market ranging from anything between USD10 000 and $11 000 per tonne, many scrap metal dealers in SA are now cashing in.
Swanepoel last year predicted that the SA government’s ban throughout 2023 on scrap metal exports would come to naught and would only damage the economy and the legitimate copper business.
He pulls no punches as he directly accuses government of “turning a blind eye” to the worsening situation.
“In South Africa we still see government not enacting the necessary regulations as it promised to curb widespread copper theft and export.”
“Now we are stuck with the situation where many in the scrap metal sector make an absolute killing exporting stolen copper which the SA government refuses to stop or is unable to prevent and does not even tax,” said an exasperated Swanepoel.
At the very least, Swanepoel adds, the SA government should take steps to test copper billets for purity before allowing export.
Six months ago, in its report on SA’s illicit copper economic, the Global Initiative Against Transnational Organized Crime (GI-TOC) said every day, criminal elements strip copper from wherever they can find it, including roads, homes, construction sites and mines.
“The theft of copper from already ailing infrastructure severely affects the capacity and operations of state-owned entities and municipalities”
GI-TOC said the country’s critical infrastructure was “at a tipping point after years of chronic mismanagement and rampant theft”, and identified copper theft as a contributing factor.