Copper theft drops

Copper theft in SA has hit its lowest mark in a year-and-a-half, according to the South African Chamber of Commerce and Industry (SACCI).

It says its Copper Theft Barometer registered R14.37 million in June 2011, the lowest since January 2010.

This is considerably below the 2011 monthly average of between R16 million and R18 million. It is also substantially below spikes of R20.5 million in January and April.

The barometer registered a level of R15.63 million in May 2011. “A consistent downward trend has not yet been achieved, but the breaching of the lower bound of R16 million a month in May opens the possibility of contained levels of theft,” said the institution in July.

The barometer measures and monitors copper cable theft in the country on a monthly basis. Copper theft this year so far amounts to R105.56 million.

“The June figure suggests lower levels of theft as the copper price remained below the anticipated bullish levels,” says SACCI.

It says, from December 2010 to April 2011, the international price of copper hovered in the range of $9 500 to $10 000 per ton.

In May and June 2011, the price steadied at around $9 000 per ton. It subsequently increased to $9 800 in June.

Factors that contribute to the difficulty in combating non-ferrous metal theft, which SA has in common with the US and Canada, includes weak export control measures and poor inspection measures of containers, says SACCI.

It adds that increasing longer term price of copper and increasing demand both domestically and internationally make theft a lucrative illegal business.

Adding to the difficulty in addressing the issue is the involvement of organised syndicates; the absence of appropriate regulation to control processing, sale, import and/or export of non-ferrous metals; accessibility to cable networks; and the readily available scrap market through which stolen material is routed back into the chain of processing, manufacturing, supply, and export.

“Approximately 75% of all scrap metal generated in SA is handled by the formal sector and the remainder by a large number of informal businesses. The estimated turnover of the recycling industry is currently estimated to be in excess of R15 billion per annum.”

It also says the Second-Hand Goods Act of 2009 is expected to be implemented in January and is considered to be crucial in the campaign against copper theft.

“In SA, there is the opportunity to boast of greater successes in the arrest and conviction of copper thieves.”

In July, SACCI said the National Prosecuting Authority informed it of the successful conviction in the Pietermaritzburg Regional Court of two people accused of the theft of copper cable from a municipal store - which is a new modus operandi.

“The sentences passed are 12 and 11 years imprisonment, respectively, reinforcing the severity of the crime.”

SACCI in February reported that cable theft in SA cost Eskom, Transnet and Telkom a hefty R259 million in 2010.

It explained that the R259 million knock is an indicator only of the estimated replacement cost of copper cable stolen from major users and does not reflect other direct costs involved, such as security to protect the infrastructure.

It is estimated that overall theft of copper costs the South African economy R5 billion per year.

However, the indirect repercussions of copper cable theft are on a large scale and of greater cost to the South African economy per annum.

These indirect effects include poor service delivery, negative investor perception of SA, power outages that could result in poor productivity, deterioration in exports, and the shutting down of business operations.