Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Johannesburg Stock Exchange  >  Telkom SA SOC Ltd    TKGJ   ZAE000044897

End-of-day quote. End-of-day quote  - 08/17
67.25 ZAR   +0.28%
08/11 Cellphone costs are a wake-up call
08/07 TELKOM SOC : SAA flight to survival could go via Telkom
08/03 TELKOM SOC : new uncapped business plan may save you money
SummaryChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

Telkom SOC : Global copper thieves strip SA's economy

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/16/2017 | 07:19pm CEST

Bongi Shange of Telkom shows copper cables the company has caught at Durban Port. Picture: Patrick Mtolo

Cape Town - Copper mining is one asset Cape Town does not have - yet it boasts multimillion-rand exports of the economically precious metal and there are no guesses where it comes from.

The venal trade by thieves, dodgy scrap dealers and criminal syndicates - who sell to copper-thirsty economies in the East, mainly India and China - is lucrative for the dirty few, but comes at a vast cost to South Africans, from commuters and householders to businesses and public enterprises.

One of the most extensive studies of copper crime in recent years, a Unisa master’s in criminology by William Pretorius in 2012, presents the crisis as “one of the most serious challenges facing economic growth and development in South Africa”.

The study acknowledges that there are legal and illegal scrap metal operations, but notes that “respondents” in the research “believed that there should be a strict clear policy relevant to all scrap metal dealers, which could work if controlled. Metal merchants knew what was right, but they ignored compliance because of bad control, weak law enforcement, and untrained police”.

Pretorius’s research reveals details about the modus operandi of the criminals, ranging from subsistence thieves to syndicates with international links.

Telkom, Eskom and Transnet - along with municipalities - are the chief targets of the multibillion-rand thieving. Particularly vulnerable were Eskom, with “approximately 370 000 plus kilometres of exposed electrical cabling that covers vast distances over kilometres of remote areas making these cables extremely vulnerable to theft”, and Transnet, which faced “a similar challenge in securing about 23000km of rail track” and, in 2009/10, and “was consistently losing more than 20km of copper cable to criminal syndicates each month”.

In some cases - back in 2011 - thieves walked away with up to 8km of cable in one go.

Telkom “highlighted the fact that the increase in copper cable theft was fast creating an environment of a rapidly deteriorating service quality. It was also severely affecting the delivery of sustainable information communication technology services to customers.”

Equally, “the threat to municipalities is real, substantiated by the crippling effect it has on municipalities”.

Pretorius noted of one informant’s view: “It was evident that copper theft was a very serious threat to the critical infrastructures which provided essential services to the country. If this was continuously overlooked and allowed to continue, the quality of life of all citizens would be influenced. What was disturbing was the alleged ignorance of this crime within the law enforcement environment and its policy makers. It seemed as if there was very little or no SAPS involvement. It was as if the SAPS were leaving this problem to the industries and to the security industry to resolve.”

A common complaint was that “role players (fighting the scourge) needed to form a collaborative front because even though they were all actively involved in combating copper theft crimes, they still worked in unco-ordinated silos”.

The study drew a connection between the international price of copper and copper theft, and, in particular, the “massive demand from China and India, whose urbanising economies are voracious consumers of copper”.

China’s demand constituted 40% of the global demand.

Pretorius’s study noted that “copper cable theft holds a specific danger for the entire South African industry infrastructure in that it causes a domino effect that vibrates on all levels. For example, if the transport system such as buses, trains, or ships, were to stop being operational, all the supporting and dependant services would follow.

“The indirect impact would be on the people making use of these transport services - thousands of people would be late for work, freight deliveries would be delayed and business would be without stock, etc. This could escalate into striking, angry, frustrated people - complaints and retaliation, vandalism, driver threats, hi-jacking of transport, burning of property, overcrowding, possible claims and even loss of life.”

The study noted that “not all scrap metal dealers were involved in crime. Their work was deemed necessary and it was legal. However, the illegal trade was far more lucrative than the legal trade and consequently the opportunities were, for most, too attractive to say no.”

Pretorius wrote of his findings: “Demand and supply was the order of the day, and one of the respondents believed that 95% of scrap metal dealers would buy stolen copper if it was presented to them.

“The respondents supported the notion that the scrap metal market was in no manner policed sufficiently. There were so many loopholes that in a way they had become untouchable. They created the market, thus they were in control.

“Copper as a commodity was in such great demand that the weak security and law enforcement situation in this country allowed copper to be provided/stolen on demand, for scrap metal dealers, who could destroy any evidence quickly through recycling.

“Bucket shops and scrap metal dealers were one and the same. Together they found loopholes in the systems, for example, they moved stolen copper cables through internal networks, making the identification and quantification of stolen copper very difficult.”

Pretorius wrote that “respondents believed that about 5 000 scrap metal dealers resided in South Africa (and that) according to the respondents, all the stolen copper had to go through the hands of scrap metal dealers and the recycling vendors. This made the scrap metal dealers the key to the mitigation of copper cable theft.”

Weekend Argus Sunday

(c) The Mercury 1999 - 2017 Independent Newspapers (Pty) Limited. All rights strictly reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on TELKOM SA SOC LTD
08/11 Cellphone costs are a wake-up call
08/07 TELKOM SOC : SAA flight to survival could go via Telkom
08/03 TELKOM SOC : new uncapped business plan may save you money
08/03 TELKOM SOC : Kenya hires former Tigo executive as HR manager
08/03 TELKOM SOC : I am sure many residents in Kenwyn are as frustrated as I am with T..
08/01 TELKOM SOC : 1H17 net profit climbs 21.9% to IDR12.1tn
08/01 TELKOM SOC : Telkomsel reports 15.6% increase in first-half net income
07/31 TELKOM SOC : Desperate Treasury eyes state asset sale
07/31 VODACOM : Disappearing data? Mystery solved!
07/31 TELKOM SOC : overhauls fixed-line offerings
More news
News from SeekingAlpha
08/04 Top Yield Communication Services Dividend Dog Is Windstream As Of Aug. 1
06/23 Brokers Tag VEON Communication Services As 'Safer' Dividend Top Gain Dog For ..
04/13 16 'Safer' Communications Services Dogs Topped By CenturyLink April Gains
03/10 Combined Tech+Comm Sector Safe Dividends Paced By Daktronics Alleged Gain In ..
2016 Vodacom dropping $445M buyout of Neotel
Financials ( ZAR)
Sales 2018 42 768 M
EBIT 2018 4 737 M
Net income 2018 3 142 M
Debt 2018 4 686 M
Yield 2018 5,55%
P/E ratio 2018 10,87
P/E ratio 2019 10,78
EV / Sales 2018 0,94x
EV / Sales 2019 0,91x
Capitalization 35 437 M
Chart TELKOM SA SOC LTD
Duration : Period :
Telkom SA SOC Ltd Technical Analysis Chart | TKGJ | ZAE000044897 | 4-Traders
Technical analysis trends TELKOM SA SOC LTD
Short TermMid-TermLong Term
TrendsBullishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 12
Average target price 72,1  ZAR
Spread / Average Target 7,2%
EPS Revisions
Managers
NameTitle
Sipho Nkosinathi Maseko Group Chief Executive Officer & Executive Director
Jabulane Albert Mabuza Non-Executive Chairman
Deon Jeftha Fredericks Chief Financial Officer & Executive Director
Len M. de Villiers Chief Information Officer
Navin Kapila Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
TELKOM SA SOC LTD-9.76%2 672
VERIZON COMMUNICATIONS-9.18%197 484
NIPPON TELEGRAPH AND TELEPHONE CORP7.45%100 687
DEUTSCHE TELEKOM-4.52%87 585
TELEFONICA6.29%55 636
SINGAPORE TELECOMMUNICATIONS LIMITED3.30%45 410