Transnet has declared a force majeure at ports due to the strike, noting that the action will profoundly impact economic activity across all sectors.
Meanwhile, Thungela Resources says that it has risk mitigation strategies and can handle rail interruptions of up to 7 days.
In other news, Richards Bay Minerals announces a 300 GWh solar power partnership with international energy company Voltalia to be constructed in Limpopo.
Here is the biggest news of the day.
- Transnet declares force majeure at ports due to the strike. The company said that the strike is illegal and that unions have not followed the rules set down in labour law. It further noted that the strike action would profoundly impact economic activity across all sectors, and it urged workers to consider the long-term consequences of the strike on themselves and the economy as a whole.
- Thungela Resources says that Transnet strike will impact its production and exports, but it has risk mitigation strategies. Thungela has high stockpile levels at its Richards Bay Coal Terminal, which operates independently of Transnet. Thungela can manage seven days of interruptions. If the strike lasts for two weeks, Thungela will need to curtail production, hurting export volumes. Thungela is working with Transnet to deploy additional security measures on the coal corridor, including helicopter surveillance, heightened security at depots, and an increase in the number of reaction teams.
- Richards Bay Minerals (RBM) announces 300 GWh solar power partnership with international energy company Voltalia. RBM, which is majority owned by Rio Tinto, will partner with local black economic empowerment (BEE) partners to build a solar power plant in Limpopo, 120 km from Polokwane. The plant is expected to be completed in 2024.
- Harmony Gold announces acquisition of the Eva copper project in Australia. Harmony will acquire Eva in full from Copper Mountain Mining Corporation. The price is an upfront payment of R3 billion plus a contingent consideration of up to R1.1 billion, which Harmony plans to fund with existing cash resources and available debt facilities. The project involves some construction for the open pit mine with a simple process plant, which Harmony considers low risk in terms of execution. Construction is planned to last 2 – 3 years, and the project should have a life of mine of 15 years.
- US and Asia-Pacific shares trade lower in anticipation of the US jobs report, which will likely guide the Fed’s monetary decision in November. Payrolls are expected to increase 275,000 in September, and unemployment is predicted to be steady at 3.7%, according to economists surveyed by Dow Jones. Many market participants would like to see weaker jobs numbers to spur the Fed to ease the pace of policy tightening. The consensus expectation for wage growth is 5.1%, which will still put significant pressure on inflation. The S&P 500 declined 1% to 3,744, after starting the week strong, while Hong Kong’s Hang Seng index lost 1.1%.