Phase 2 of the Scrap metal Policy to Limit Damage to Infrastructure and the Economy (the “Policy”) is in progress. Amendments to the Second Hand Goods Act (SHGA) were published for comment on 17 November 2023. These proposed amendments include:
- Enforcement of the registration regime for scrap metal sellers
At the moment, only the buyers are registered, however, these amendments will require that scrap metal sellers also be subject to the registration regime envisaged in the SHGA. The only exemption is waste pickers and only if they are not selling copper.
- Enhanced registration requirements
Registration according to these amendments will only be granted if the buyer and seller have an adequate Tax Compliance Status.
- Enhanced reporting requirements
The South African government has proposed an input-output reporting system to track the purchase and sale of metal scrap and semi-finished products. The system will be used for compliance monitoring under the SHGA and for monitoring exports of scrap metal and semi-finished products. Scrap dealers will be required to submit monthly electronic reports to the International Trade Administration Commission of South Africa (ITAC), showing all purchases and sales of metal products (scrap, semi-finished and finished) by volume and value. The reports will contain information such as the date of purchase/sale, type of metal, grade of metal, tonnage, total cost/revenue, business registration number of the seller/buyer, or in the case of an individual seller, the identity number of the individual, and any additional fields that may be required to secure the objective of input-output reporting.
- Inclusion of semi-finished metals in the registration regime
Buyers and sellers of semi-finished metals are not yet required to register under the SHGA, however, with these new amendments, they will be required to register.
- Requirement for registered buyers to only purchase copper scrap and semi-finished copper products from registered sellers.
The government is also thinking about making it mandatory for registered customers to only buy semi-finished or scrap copper items from registered suppliers. This would have the effect of banning all sales of semi-finished and scrap copper items outside of registered businesses or individuals.
There is a good chance that more changes will be made given the current focus on theft infrastructure and the phases of the scrap metal policy.