With its very positive outlook on domestic demand and the comfort of higher steel prices as motivation, steel powerhouse ArcelorMittal South Africa will be making significant investments until 2011.

Speaking at its financial results presentation in Johannesburg CEO Rick Reato provided an overview of the upcoming expenditure, singling-out the plans for a new three-million tons a year furnace at Newcastle, to replace the existing two-million-tons-a-year N5 furnace, as one of the highlights.

The new furnace (N6) would come on stream in 2011, and Reato said that it would satisfy the future demand that was expected from local and Southern African markets.

In the meantime, however, a ‘mini' reline, worth R170-million and lasting 45 days, was currently under way at N5. Reato explained that the furnace was undergoing a mini-reline as, although ArcelorMittal had committed to putting in a new furnace, it needed capacity now and the reline would provide this for the next four to five years.

Between 2008 and 2011, some R450-million would be spent on furnace relines, R2-billion on maintaining capability, R2,9-billion on steel capacity increase, R2,7-billion on downstream value-adding projects and about R1-billion on environmental projects.

On flat products production, Reato said that some R600-million would be invested in direct-reduction iron kilns at Vanderbijlpark to double current capacity to 350 000 t. This should be completed by the third quarter of this year.

Some R275-million was being spent on the 70-day-long reline of Corex and Midrex at the Saldanha works - which Reato noted was currently under way.

Next year will see the start of the development of a new colour line, with a capacity of 100 000 t, at Vanderbijlpark which is due to come on line in 2010.
A new galavanising line will also be built at Vanderbijlpark - however, Reato noted that its exact capacity had not yet been calculated.

The first quarter of next year would also see an ore screen and stockhouse upgrade at Saldanha worth R50-million.

On the long products side, upcoming major investments include the Maputo mill in 2008, the new bar/section mill in 2011, the new billet caster in 2011 and the crane and gantry upgrade, worth R150-million, in the fourth quarter of this year.

Reato also outlined the environmental spend which included a sinter clean gas investment of R170-million at Vereeniging works, and electric arc furnace dust extraction at the Vanderbijlpark and Vereeniging plants. In 2009, some R75-million would be spent on calcium carbide desulphurisation at the Newcastle works and lastly, Reato noted that R100-million was to be spent on an evaporator crystalizer this year in order to achieve "0% effluent discharge status".

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