Scrap metal exports to China up

China is buying local scrap metal at a record rate, leaving Kenya’s infrastructure exposed to vandalism.

Data contained in the Economic Survey 2013 show that the value of scrap metal exports rose by 169 per cent to Sh2.8 billion last year. The volume increased by 25.8 per cent to 5,465 tonnes, with China absorbing most of the products.

There have been fears that increasing demand for scrap metal could lead to a rise in vandalism in Kenya.

Vandalism costs the country billions of shillings per year. The Kenya National Highways Authority in December last year said that it would spend Sh120 million in the next 12 months to keep vandals away from Mombasa and Thika highways.

These funds are proceeds from the road levy. They should, instead, be geared towards the maintenance of roads.

Unscrupulous dealers target road guardrails and signposts.

Overall, Kenya’s exports to China rose by 41.6 per cent to Sh5.4 billion in 2012. “The increase in total exports to China is partly explained by growth in scrap metal exports during the period,” says the report, released by the government last week.

Premium prices

Resource-hungry China is the world’s biggest market of scrap metal and local traders are targeting the market to take advantage of the premium prices.

“China is a big buyer. The country has a lot of demand for brass, copper and aluminium,” said Kenya Iron and Scrap Metal Association chairman Irshad Sumra.

Mr Sumra, who is also the Embakasi West MP, said while traders in China currently pay about Sh554,400 per tonne of copper, those in India offer about Sh520,800.

Early this year, the partly State-owned Telkom Kenya said that it was overhauling its network at a cost of Sh4 billion. The work involved replacement of copper wires that are popular among vandals and which cost about Sh2 billion annually to repair. Last year, Kenya Power revealed that it had lost over Sh6 billion to vandals in one decade.

Legislation that would police the scrap metal industry and impose tougher penalties against criminals was tabled in Parliament last year. The Scrap Metal Bill 2012 was drafted to control and regulate the industry.

It stipulates the establishment of a Scrap Metal Council which would license dealers as well as the imposition of a Sh20 million fine or seven-year jail term for those found in possession of scrap metal of dubious origin.