South Africa’s Department of Trade and Industry this week indicated that it was considering building a state-backed, but privately operated, steel mill to compete with ArcelorMittal South Africa and Highveld Steel and Vanadium.
According to the newly released National Industrial Policy Framework (NIPF), the department aims to finalise the feasibility study into the viability of establishing a new carbon steel plant by March 2008.
“A steel task team has already been formulated to assess the viability of different locations and technologies for the establishment of a new carbon steel plant in South Africa,” according to the NIPF.
The Department of Minerals and Energy, the Department of Public Enterprises, the Industrial Development Corporation and state minerals and metallurgical research house Mintek are listed as stakeholders.
The project is listed as one of the outputs it is targeting as it puts measures to stimulate more competitive input pricing in place.
Ultimately, the department hoped to reduce the costs of inputs to downstream industries to internationally competitive levels.
Business Day quoted the department’s chief director of industrial policy Nimrod Zalk on Wednesday as saying that there was undoubtedly scope for additional steel investment in South Africa.
“We are thinking in terms of security of supply, but it obviously also makes sense from a pricing point of view,” Zalk said.
The government said it would look for an international partner for the plant.
Zalk has confirmed that the government had already held initial discussions with potential partners.
Business Report on Friday said possible sites for the new carbon steel plant included Saldanha on the west coast, Coega in the Eastern Cape and Maputo in Mozambique.
In the meantime, ArcelorMittal South Africa said by 2011 it would have invested R11,8-billion in South Africa as it boosts its steel output to meet growing demand.
The company said it expected local steel demand to grow by more than one-third to a record eight million tons a year by 2010. — I-Net Bridge