Government intervention crucial for a sustainable steel industry in South Africa

LOUIS Brandeis famously coined the phrase, “Sunlight is the best disinfectant”.

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Given the repeated willful misrepresentations peddled by the steel mini mill companies of the Electric Steel Producers Association (ESPA), it is in the public interest not only to set the record straight regarding their unfounded claims, but to reveal the inconvenient truth behind their operations.

Before doing so, it may be useful to provide some context regarding the steelindustry. A sustainable steel industry in South Africa will be able to contribute to economic growth and job creation, support infrastructure development and contribute to the country’s decarbonisation goals, while at the same time creating an opportunity for the development and export of greener steel.

Unfortunately, the sustainability of the steel industry has been threatened due to national constraints such as high energy and logistics costs as well as the creation of a playing field that is not level, due to preferences such as a scrap export tax, scrap price preference system and preferential funding provided to the mini mill sector, all to the detriment of the rest of the steel industry.

In light of the recent decision by ArcelorMittal South Africa regarding the closure of its Longs Business, the government has recognised the need for intervention and to work towards creating a level playing field to ensure a vibrant and competitive steel industry.