R/€ = 15.21Change: -0.19
R/$ = 14.35Change: -0.21
Au 1065.89 $/ozChange: -6.16
Pt 846.00 $/ozChange: 0.50
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Feb 08, 2011

Draft carbon tax a ‘nonstarter’, Nyembezi-Heita asserts

ArcelorMittal South Africa CEO Nonkululeko Nyembezi-Heita and CFO Rudolph Torlage on possible power generation projects and the impact of a carbon tax. Camera Work and Editing: Darlene Creamer. (8/2/2011)
© Reuse this

Steel producer ArcelorMittal South Africa (Mittal) has warned that the proposed introduction of carbon taxes could undermine its competitiveness against both developing and developed country steel producers, which do not currently confront such a tax burden, and could also materially affect its profitability.

In fact, CFO Rudolph Torlage indicated on Tuesday that, had the proposed tax been introduced during 2010, it would have equated to almost 50% of the group’s earnings before interest, tax, depreciation and amortisation of R3,5-billion.

“So from our perspective, this is a nonstarter,” CEO Nonkululeko Nyembezi-Heita added. “So, we are hoping very much that this is not quite where we will end up.”

She revealed that Mittal was in the process of preparing its formal comment on the discussion document, which would be completed ahead of the February 28 deadline set for such public feedback.

A recent report by Deloitte indicated that, should carbon dioxide equivalent (CO2e) prices be set at R165/t, it could yield R82,5-billion in additional tax revenue for the South African government, given estimated total yearly emissions of about 500-million tons of Co2e.

While the National Treasury’s discussion document, which was released in December, explored three carbon tax options, it stated that a tax imposed directly on measured emissions of CO2 appeared to be the “most appropriate”.

Deloitte calculated that the model could result in Eskom paying R37-billion a year in carbon taxes, while Sasol could be required to pay some R9,9-billion a year, and Mittal about R1,7-billion a year.

“Were the carbon tax to be implemented in the form currently contemplated, it would have a devastating impact on this company’s financial performance,” Nyembezi-Heita argued.

She stressed that Mittal was also moving to meet its target of reducing CO2 emission by 8% a ton of steel produced by 2020, with 2007 as the base year.

As a signatory to the National Energy Accord, the JSE-listed company had also committed itself to reducing its electricity consumption by 12% by 2014, and the group was looking to increase its internal generation capacity from the current level of around 80 MW.

It was even considering wind generation options at Saldanha Bay, with the primary focus on capturing waste heat and off gases for conversion into electricity.

Mittal was also investigating ways to make its coke batteries compliant with the rigours of South Africa’s new Air Quality Act, which came into force last year. Noncompliant facilities had five years to become compliant and ten years to meet the stipulations of the new Act.

Should Mittal move towards total compliance it was likely involve a “significant capital outlay”.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
Other Metals News
ArcelorMittal's South African unit priced its $320-million cash call at more than a 50% premium on Tuesday as it battles falling steel demand and rising costs, sending its shares soaring. "They're sending the signal that someone with deep pockets is backing them and...
South Africa’s crude steel production increased by 23.8% year-on-year to an estimated 650 000 t in October. Global crude steel production for the 66 countries reporting to the World Steel Association (worldsteel) was down 3.1% year-on-year to 134-million tons.
Students from the Southern African Institute of Steel Construction (SAISC) School of Draughting at Genrec Engineering, in Wadeville, Germiston, have excelled in the recently held on October 2nd  University of Johannesburg Department of Civil Engineering Technology’s...
Latest News
South African Reserve Bank governor Lesetja Kganyago
Updated 46 minutes ago South African Reserve Bank governor Lesetja Kganyago believes the reaction of the rand to a possible hike in interest rates by the US Federal Reserve (Fed) in mid-December could be “exaggerated”, but says the bank has no plans intervene in support of the currency....
Updated 1 hour 14 minutes ago A slow and gradual normalisation of US monetary policy, on its own, does not need to be negative for South Africa, the South African Reserve Bank's deputy governor Francois Groepe said on Friday. In a speech posted on the central bank website, Groepe also said flows...
Updated 2 hours 18 minutes ago Nigeria's Oando plans to build a gas plant for up to $350-million as it focuses on integrating gas production with its supply business, the head of the gas and power unit said on Thursday. Bolaji Osunsanya, MD of Oando Gas and Power said the plant, with a capacity to...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
NICK CHRISTODOULOU As about 58% of data stored by organisations is dark, they must identify this dark data to expose risks and valuable information
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
BRIAN VERWEY Effective management, review and administration of non-core elements can improve business operations and increase revenue and decrease unforeseen risks
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...
Alert Close
Embed Code Close
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96