Story audio is generated using AI
South Africa’s reliance on imported bitumen has emerged as a key cost risk in the government’s planned R1-trillion infrastructure spend, according to the Reserve Bank’s latest financial stability review.South Africa’s dwindling oil-refining capacity has cut the domestic supply of bitumen, a key material used in the paving of roads and airfields.Nearly all of the country’s surfaced roads have bituminous surfacing. The bitumen used in the country is obtained as an end product of the petroleum crude oil refining process.Bitumen is the oldest known engineering material and has been used from the earliest times as an adhesive, sealant and waterproofing agent.The Bank said emerging infrastructure-related risks have become more prominent.“Volatility in global oil markets has highlighted South Africa’s sharply reduced domestic oil-refining capacity since 2020. Strategic crude reserves offer limited protection in the absence of sufficient refining capacity, while feasibility studies to reopen or expand capacity remain incomplete,” the financial stability review says.(Dorothy Kgosi) “Related vulnerabilities include reliance on imported bitumen — a critical input for road maintenance and construction — alongside the absence of dedicated bitumen terminals at domestic ports, raising costs and adding to execution risks in public infrastructure programmes.”South Africa’s fuel refining capacity has more than halved since 2020, with the country having lost about 260,000 barrels a day of capacity following the permanent closure and conversion of multiple major coastal refining facilities.Sapref, once South Africa’s largest crude refinery, was completely shut down following flooding and an operational pause in 2022. The state-owned Central Energy Fund has been tasked with reviving it.Minister of mineral & petroleum resources Gwede Mantashe told the Fuels Industry Imbizo last week that geopolitical disruptions have exposed the risks associated with excessive dependence on imported refined petroleum products.Raubex, the JSE-listed infrastructure development and construction materials supply group, has put measures in place for procuring bitumen from offshore to ensure the product quality meets its standards. This, as the oversupply of imported bitumen has created a new risk relating to the quality of procured bitumen.Raubex owns and rents bitumen storage facilities, which are sufficient to ensure approximately six weeks’ supply to its operations, depending on stock levels between import cargoes.To meet the domestic supply of bitumen, Raubex said there are regular imports into the Cape Town and Durban ports to address local supply constraints and to meet demand.To mitigate the risk of imported bitumen, Raubex said it has put a three-stage quality assurance process in place, with strict protocols “to ensure the quality of bitumen that is procured from all sources that supply into South Africa”.The country’s largest refinery, Sapref, which is in Durban, ceased operations in 2022 after floods damaged the 180,000-barrel-a-day facility.Bitumen’s versatility as a construction material is unparalleled. Its uses include the construction and maintenance of roads, airfields, and all areas where asphalt is used — roofing, damp-proofing and dam, reservoir and pool linings, among other uses.The government has committed to investing more than R1-trillion into public infrastructure over the next three years, with the transport and logistics, energy, water and sanitation sectors set to receive the bulk of the spending to revive economic growth.
