MPs asked to intervene in scrap metal dispute

By Macharia Kamau

The Association of Battery Manufacturers (ABM) is now calling on Parliament to enact legislation to ban export of scrap metal to save its multi-million industry from collapse.

ABM Managing Director John Kinyanjui says the Government and Parliament should act immediately to save the country millions of dollars in foreign exchange earnings.

"We have brought foreign exchange into the country to the tune of $6.5 million in the last 12 months, but this is likely to change if nothing is done," says Kinyanjui. He further states that the local battery industry contributes Sh450 million to the exchequer in taxes each year.

In the last two years, he says, his organisation had invested Sh750 million in modern technologies to recycle lead and to manufacture batteries. He argues that the technology ABM acquired recycles lead at a lower cost than what is used at the London Metal Exchange.

He says ABM employees 450 workers directly and a further 1,200 indirectly. It commands a leading market share in Kenya, almost half in Tanzania, 15 per cent in Uganda and almost 10 per cent in Zambia.

This cost-quality competitive production, he says, saves Sh1.2 billion each year in foreign exchange outflow on imports, and earns Sh400 million each year in foreign exchange earnings.

Kinyanjui says the proposed action will also end Kenya’s continued contravention of both the Basel and Bamako Conventions on Hazardous Waste Management by allowing the export of scrap metal.

Basel convention

In a letter dated May 17, 2006, the Director General of National Environmental Management Authority (Nema) Dr A. M. Mwinzi warned Government agencies to be cautious against businessmen that show interest in export of lead. He describes lead as a heavy metal whose compounds had been listed under the Basel Convention.

Kenya is a signatory to the convention, which bans the export of old automotive batteries, lead scrap, crude and refined lead. Uganda and Tanzania have formally banned exports of all scrap of all kinds including lead scrap and used batteries respectively, says Kinyanjui.

He, however, called on the Government to advocate for the free movement for the same scrap metal within the East African Common Market.

Worldwide shortage

Countries such as China and India, he said, have already imposed restrictions on the exportation and processing of lead, thereby creating a worldwide shortage.

Kinyanjui says Kenya had introduced a 20 per cent export duty on lead and scrap lead in 2007, but stopped enforcing the policy in 2008 and removed the duty a year later allowing unscrupulous smelters to invade the EPZ to export unrefined lead.

He argues that if 800 tonnes of lead scrap smelting is done at EPZ, it denies the country employment, tax revenue, and manufacturing process, only produces unrefined lead and simply plunders Kenya’s raw material.

One player

However, the proposed ban supported by Industrialisation Minister Henry Kosgei this week, is opposed by scarp metal dealers who argue this will only benefit one player.

The KISM Secretary General, Irshad Sumra, says the ban would render over 800,000 people who derive their lively from the industry out of business

Sumra argued that the international market have an attractive price offering Sh150 per Kg of lead scrap, whereas ABM was offering Kshs40 for the same.

But Kinyanjui disputes these and accuses scrap metal dealers of falsifying figures to justify their continued export of scrap metal. "The world price of the lead raw material is Sh44.00 per Kg. ABM is buying at Sh48.00 and selling at Sh51.00 per Kg. A simple search on the internet will prove it."