ANC secretary-general Fikile Mbalula last week hailed the Shosholoza Meyl’s first trip from Joburg to Cape Town since 2021 as a “railway renaissance”, one that would position rail “as a key contributor to economic transformation”. Yet just over an hour from its destination, the train came to an abrupt and ignominious halt as a result of the overnight theft of copper cabling. It’s an apt metaphor for a crisis that has long been in the making.
Copper has created a new “gold rush” in an expanding illicit economy shaped by vast organised crime networks, gangs and a seemingly endless and expendable supply of foot soldiers willing to risk their lives to feed addictions to nyaope and tik, or to eke just enough for another meal.
Eskom, Transnet and the Passenger Rail Agency of South Africa say they suffer direct losses of R7bn a year, and associated losses to the broader economy amount to at least R187bn.
Joburg’s City Power recorded 444 cases of cable theft between December 2022 and February 2023. The risk to City Power engineers and electrical contractors is now so great that armed security guards often escort them to replace stolen cabling.
Since 2015, Transnet has recorded nearly 23,000 incidents of cable theft and the loss of 4,438km of cable. In the 2022/2023 financial year, the state-owned rail and port operator recorded 1,121 incidents of copper cable theft, a 25% decline on the previous year, thanks largely to investment in greater private security along railway lines. Still, the number is substantially higher than any year before 2021/2022.
A year ago, in an effort to curb attacks and looting of infrastructure, the department of trade, industry & competition (DTIC) imposed a “temporary” ban on the export of scrap metals, including copper. The department argued it would simplify border enforcement because customs officials would only need to identify scrap as copper to prove a shipment was illegal.
Instead, the illicit copper market appears to be expanding, and the looting of infrastructure shows no signs of abating. The smugglers have adapted.
Yet the DTIC is contemplating an extension of the ban, publishing a notice in the Government Gazette three weeks ago that calls for comment on key aspects of its scrap metals policy, including a proposal to extend the ban on copper and other nonferrous metal exports by another six months.
The initial ban was supposed to be a temporary measure to reduce the ability of criminal syndicates to monetise stolen metals and to give the government time to put in place systems and measures to prevent the theft of metals such as copper. They included steps to enforce the registration of scrap buyers and sellers, the imposition of enhanced registration and reporting requirements and the inclusion of semi-finished metals in the registration regime. The amendments to existing regulations were finally tabled for public comment on November 17.
The risks of smuggling illicit copper are low, and the rewards extremely high
— Security expert
Most of the stolen copper smuggled out of South Africa ends up in China, the biggest importer of scrap copper. It leaves through South Africa’s ports in containers that are either mislabelled or accompanied by false documentation. In some cases, scrap copper is labelled as raw copper. In other cases, it is mislabelled as nonmetal goods, such as textiles, and then exported under the corresponding customs codes.
Those involved in smuggling illegal copper out of the country have been mislabelling it as scrap for years, both to avoid tariffs and restrictions and to disguise stolen products. According to a private investigator, “the ban has just forced them to become more adept at this”.
The copper syndicates have become ruthlessly efficient, trading the metal on the domestic market, where it is reprocessed and sold to local buyers, and moving copper to the far more lucrative international market. Some of the dealers or recyclers involved in the illegal export market are part of sophisticated networks with links to foreign agents, local forwarding and clearing agents, international buyers, and corrupt police and border officials.
Containers leaving South African ports are hardly ever searched. Copper that is seized is often the result of informer tip-offs or, more often, by chance. “Your chance of being detected at the port is about 1%,” a Durban security expert investigating copper cases says. “The risks of smuggling illicit copper are low, and the rewards extremely high.”
The high price and demand for recycled copper, and the ease with which the metal is reprocessed, makes it a lucrative business for legitimate traders as well as criminal operations. Often there is a blurring of legal and illegal trade; at least three of South Africa’s “big five” scrap metal dealers have been implicated in or suspected of involvement in the illegal copper trade.
Stolen copper can be passed on to scrap dealers, who either repackage it for resale or melt it down for distribution on the legitimate market or on the black market. The general price for scrap copper wiring ranges from R20/kg to R60/kg. However, interviews suggest that the value of stolen copper is in the lower range, usually between R15/kg and R20/kg. After recycling and processing, the price can increase to between R140/kg and R160/kg.
A container used for export through the ports can typically hold about 24,000kg of scrap copper. Assuming it’s bought at R70/kg (half the current legal price) and sold at the full price of R140/kg, the profit on a single container is just under R1.7m.
Besides its value, several other features make the illicit copper trade attractive to criminal elements. They include:
- Copper’s distinctive colour makes it easily identifiable and distinguishable from other metals.
- The extensive use of copper means there are plenty of opportunities for theft. Much of it is also easily accessible and poorly secured.
- It is easy to sell, and there are always scrapyard dealers who will buy it without asking questions.
- It is inexpensive to import furnaces and process stolen copper into resaleable scrap.
- Information on how to sort and reprocess copper is readily available on the internet.
- Once scrap copper has been granulated, sheared or shredded, it is virtually impossible to trace its origin as the processing machinery erases any identifying marks.
- Once processed, stolen copper can be laundered alongside legally acquired copper without the buyer necessarily being aware of its origins.
Most of those arrested are low-level foot soldiers, the copper thieves commonly known as izinyoka or ‘snakes’ in Zulu. As quickly as they are arrested, they are replaced
The case of the Matsetela syndicate shows the extent and organisation of some copper syndicates.
In April 2023, five members of the syndicate were convicted in the George regional court. At their trial it emerged that the syndicate kingpin, Malome Matsetela, also known as “Navara” after his favourite vehicle, received more than R15m from the sale of copper from 2012 to 2014. He was sentenced to 77 years in prison. He was already serving an 18-year sentence for racketeering and theft, and vandalising copper infrastructure.
His co-accused, who were involved in the thefts and had made between R119,480 and R506,114 each, were given sentences ranging from eight to 17 years.
Matsetela, the owner of a small Joburg company, Malvern Scrap Metal, was a central figure in a national copper theft network that plundered Eskom, Telkom, Transnet and municipal infrastructure across the country. Using hired vehicles, yellow warning lights and reflective vests, the thieves masqueraded as road maintenance crews. In addition, a prosecutor told the court that 11 of the 18 copper theft syndicates she was aware of sold their copper to Matsetela.
Prioritising action against those at the top of the illegal market is critical to tackling the illegal trade. They control the value chain and their removal would reduce the opportunities available to lower-level accomplices.
The main players often hide behind a complex web of activities that blur the line between legal and illegal. While targeting them requires complex, skilled and resource-intensive investigations and prosecutions, success would have a knock-on effect on the illegal trade, and more emphasis needs to be placed on strategic investigations and prosecutions.
The transnational nature of the illicit scrap copper trade requires greater co-operation between law enforcement, customs and other local and international agencies. It also requires greater international co-operation between South Africa and international destination markets, most notably China.
Measures implemented to address copper theft also need to be adequately monitored. The police crime administration system records copper theft as “theft not reported elsewhere”, which makes it impossible to determine the number of copper cases reported or the impact of investigations and arrests.
Responses to date have lacked a clear strategy to disrupt the criminal networks driving the trade. With rare exceptions, most of those arrested are low-level foot soldiers, the copper thieves commonly known as izinyoka or “snakes” in Zulu. As quickly as they are arrested, they are replaced.
Real impact will only be achieved through targeted investigations and prosecutions focusing on high-level criminals; effective implementation of existing legislation that, while good on paper, hasn’t been adequately used; targeted action against informal scrap dealers or “bucket shops”; the closure of dealers involved in copper theft; and improved co-ordination and better engagement with communities who are called on to report criminal activities but rarely see any reciprocal support from the state.
* Irish-Qhobosheane is a senior analyst at the Global Initiative Against Transnational Organized Crime (GI-TOC). Rademeyer is the organisation’s director for East and Southern Africa and head of its South Africa Organized Crime Observatory. This article draws on the GI-TOC report “South Africa’s Illicit Copper Economy”, published this week
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