Columbus Stainless looks to Maputo harbour as a possible solution to the crippling transport costs in South Africa, reports Karen Harverson
Stainless steel producer Columbus Stainless is investigating the possibility of exporting product through Maputo harbour in Mozambique rather than through Durban because transport costs are so high.
“We need the shortest route between Columbus and the ocean and at about 250km, Maputo is half the distance that Durban is from Middelburg,” said chief executive Fred Boshoff speaking at the final commissioning of the R3,5-billion expansion project last week.
Begun two-and-a-half years ago, the expansion project owned by Samancor, Highveld Steel & Vanadium and the Industrial Development Corporation, will boost Columbus’ production from 150 000 tons to 600 000 tons a year, 85 percent of which will be exported.
“To be competitive, the critical mass for a producer is 500 000 tons a year so we will rely heavily on the export market as we expect the local market will only absorb about 100 000 tons by the turn of the century.”
Boshoff said the new route needs infrastructural development, but may be the answer to the competitive disadvantage imposed by high rail and road costs. “In Brazil it costs R28,80 to transport a ton of material 250km by rail compared to about R95 in South Africa.”
Boshoff said exporting through Richards Bay was not really an option as it was about the same distance as Durban and did not yet have the covered facilities required for stainless steel.
Commenting on the local market, he said there was a backlog in the supply of cold rolled steel but he expected it to be resolved by the end of the year.
“In the last four months we’ve supplied 6 000 tons into the local market with another 20 000 tons still required.”
He added that the price of cold-rolled stainless steel would increase by 10 percent in November.