South Africa’s Department of Trade, Industry and Competition (DTIC) has announced that it has received expressions of interest by two parties to buy the Saldanha Steel works from ArcelorMittal South Africa (AMSA).
After AMSA decided to close its Saldanha plant, the DTIC suggested that the company should continue working to find a solution and, if they did not succeed, they should “consider selling the plant to ensure the country does not lose industrial capacity and workers, and to ensure that communities are not displaced.”
The DTIC together with the Department of Public Enterprises, Eskom and Transnet have engaged with AMSA management on support which could be provided to reduce energy and logistics costs for the company and at Saldanha, in particular. The South African government has facilitated engagements with iron ore and coal producers to come up with solutions to reduce costs in order to avert job losses. The combined support package, offered by the government, ranged from concessions on iron ore pricing, electricity, water and rail tariffs, providing considerable cost savings. The government has, over the past few years, supported AMSA with tariff protection from imports including safeguard duties and the designation of steel for state infrastructure projects which directly benefitted the company.
The DTIC said that the African Continental Free Trade Area (AfCFTA), which will come into effect in July 2020, is expected to open up additional demand for primary steel across the continent, as countries build the required infrastructure and factories needed to take advantage of the expected increase in intraregional trade.