Feb 08, 2011
Draft carbon tax a ‘nonstarter’, Nyembezi-Heita assertsBack
© Reuse this
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 Climate Change News
Article contains comments
Article contains comments
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.