29 May 2020

Key points

  • Market opportunities for Australian barley in the Middle East and Africa look thin: large corporates and governments have well established alternate sources.
  • Opportunities in construction and infrastructure are narrowing as margins tighten and discounting becomes widespread. This is impacting Australian bidders.
  • Almost all South African mines will return to full production by June 1, which will aid Australian METS suppliers.
  • Surpluses in electricity supplies in South Africa have led to the cancellation of several renewable energy projects.

Supply chain and logistics

  • South Africa – New ‘Level 3’ regulations do not allow air travel within all of South Africa and certainly not cross-border. This presents continuing challenges for mining companies – including Australian METS companies – who need to rotate shift crews and contractors, including to mines elsewhere in southern Africa.
  • Dubai – Emirates has resumed scheduled airliner passenger services to nine destinations, mainly in Australia, Europe and North America. Plans are underway to fly to most destinations from July 1.
  • Saudi Arabia – Restrictions will be gradually eased from May 28 – June 20, according to current plans. Domestic travel will resume from May 31, with the exception of travel to Umrah, which is a destination for religious pilgrimage. The domestic market will likely fully open from June 21.
  • UAE – Following local authority directives, 30% of all UAE federal ministry employees will return to work from May 31. In Dubai, 50% of staff at government offices will resume work from May 31 and 100% from June 14 to allow a gradual return to normal routines.

Construction and infrastructure

  • Middle East – The Middle East Economic Digest (MEED) has predicted a sharp contraction in project awards across major markets as governments tighten spending. In a worst-case scenario, MEED estimates capital expenditure could fall 31% to US$87 bn in 2020.
  • GCC – Construction projects across Gulf Cooperation Council (GCC) states came under pressure in March as sites implemented disruptive testing and quarantine measures. Social distancing and increased screening have hampered productivity. Project clients are now seeking discounts on construction costs of 8–12%.
  • GCC – The impetus for discount-seeking by state-owned enterprises results from low oil prices, and because capex funds have been diverted, including for healthcare.
  • GCC – It is estimated that up to US$8 billion of work in the construction and transport sectors has been put on hold in GCC states.

Mining and resources

  • South Africa – From June 1, virtually all mining, agriculture and manufacturing operations will return to full production, provided companies implement a strict covid-19 strategy. Most personal services, tourism, travel and hospitality businesses will remain closed.
  • South Africa – As in Poland, mining operations appear susceptible to spikes in COVID-19 infections. Over the weekend, AngloGold Ashanti had to shut its Mponeng operations when 164 workers tested positive for COVID-19.

Renewable energy

  • South Africa – In an unforeseen twist, South Africa’s main electricity supplier, Eskom, finds itself with excess power capacity. This has prompted Eskom to cancel contracts for additional renewable energy projects. While this may impact on Australian companies, the South African Energy Association wants renewable energy to be included in the government’s stimulus package.


  • Middle East & Africa – There may be opportunities to sell barley to breweries in Africa, although the largest brewers tend to take supplies of malted barley from South Africa and Kenya.


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