Feb 08, 2011
Draft carbon tax a ‘nonstarter’, Nyembezi-Heita assertsBack
Africa|ArcelorMittal South Africa|Deloitte|Eskom|McKinsey & Company|Waste|Africa|South Africa|Country Steel Producers|Energy|Steel|Steel Producer|Nonkululeko Nyembezi-Heita|Rudolph Torlage|Waste
© 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 Carbon Steel News
A Competition Tribunal hearing into alleged cartel activity and price-fixing by several companies in the wire and wire products manufacturing industry was again postponed on Monday pending a decision by the Competition Appeal Court (CAC). Respondents Allens Meshco,...
Black-economic empowered diversified industrial holdings company, the Southern Palace Group (SPG), reported on Monday that it had entered into an arrangement to buy 100% of Macsteel Service Centres South Africa (MSCSA). MSCSA is a leading supplier of value-added...
Matthias Wellhausen has resigned as CFO and executive director of ArcelorMittal South Africa (AMSA), effective March 15, to pursue other opportunities outside of the ArcelorMittal group. AMSA group controller Gerhard van Zyl would step in as acting CFO in March until...
Recent Research Reports
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.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 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 network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
This Week's Magazine
The international Square Kilometre Array (SKA) radio telescope – which is to be jointly hosted by South Africa and Australia with, later, outstations in other countries – may not yet exist, but international scientific working groups are already deciding what...
A free Web-based solar power plant capacity-planning tool offers project planners and developers, as well as governments, a means to assess the solar energy potential of thin-film solar PV power over an area of land. The tool was developed by thin-film solar...
As yet, no specific methodology, timeline or costs have been finalised to remedy the water ingress, excessive to contractual specifications, into the Gautrain tunnel between emergency shaft two (E2) and Park Station, says Bombela Concession Company technical and...
The “seriously disruptive” electricity outages in South Africa have cost packaging group Astrapak more than R2-million in “irrecoverable downtime costs”, the company said on Monday, adding that the power cuts were negating some of the benefit of energy saving...
Bakkies and more affordable cars dominated South Africa’s new vehicle market in 2014. Unaudited data from the Department of Trade and Industry (DTI) shows that South Africa’s most popular vehicle in 2014 was the Toyota Hilux, selling 37 562 units.