Sep 26, 2011
Mittal pulls back from BEE deal, confirms R1.1bn Newcastle lossBack
Newcastle|ArcelorMittal South Africa|Imperial Crown Trading|Mabengela Investments|Oakbay Investments|South Africa|Newcastle Facility|Steel|Steel Producer|Prudence Mtshali|Sandile Zungu|Zico
© Reuse this
The JSE-listed company, led by CEO Nonkululeko Nyembezi-Heita, on Monday withdrew its cautionary announcement relating to the BEE transaction and said that the parties failed to agree on an extension of conditions.
The consortium was led by Sandile Zungu and includes Mabelindile Luhlabo, Mojalefa Mbete, Jagdish Parekh's Pragat Investments, Prudence Mtshali, Phemelo Sehunelo, Zebo Tshetlho, Zungu's Zico, the Gupta family's Oakbay Investments and Duduzane Zuma's Mabengela Investments.
The remaining 25% of the consortium was set aside for women and youth groups, as well as new BEE entrants.
The BEE transaction, unveiled in August last year, had been criticised by minority shareholders for lacking a broad-based dimension.
The BEE deal was announced alongside the proposed R800-million acquisition of Imperial Crown Trading, after JSE-listed Kumba Iron Ore said it had cancelled a cost-plus 3% iron-ore supply agreement for 2.25-million tons a year of Sishen material, after Mittal failed to convert its Sishen rights.
Meanwhile, Mittal also said it expected to lose about R1.1-billion after the structural failure of a gas-cleaning plant at its Newcastle facility last month.
The R1.1-billion estimate included property damage of R245-million.
The August 5 structural failure, which rendered the blast furnace inoperable, would have a 445 00 t impact on Mittal’s production.
It reported that repairs were progressing according to plan and that the furnace would be recommissioned in the first week of December.
The company had secured 240 000 t of steel from various sources, including from ArcelorMittal Group mills globally, to minimise the impact of product shortage in South Africa.
The South African Reinforced Concrete Engineers Association warned in August that the Newcastle shutdown could further exacerbate ongoing shortages of reinforcing steel, or rebar.
Mittal closed at R58.39 a share, up 1.92% from Friday's R57.29 a share.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines
Recent Research Reports
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 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...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
Projects in Progress - Second Edition (PDF Report)
Creamer Media’s second Projects in Progress supplement considers some of the major project developments under way, including high-profile energy and transport projects, as well as a few of the lower-profile public and private developments. What remains apparent is...
Water 2013: A review of South Africa’s water sector (PDF Report)
Creamer Media’s Water 2013 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.
Canadian Mining Roundup for June 2013 (PDF Report)
The June 2013 roundup includes details of the development of TSX-V-listed Aldridge Minerals’ flagship Yenipazar polymetallic project, in Turkey; the Canadian Nuclear Safety Commission’s renewal of Cameco’s uranium mining licence pertaining to the Cigar Lake...
This Week's Magazine
Mitsubishi Motors South Africa (MMSA) has introduced a 4x2 derivative of its Pajero Sport sports-utility vehicle (SUV), which will give it access to a substantial slice of the full-size SUV market, where it will compete with the likes of the Ford Everest, Chevrolet...
South African Energy Minister Ben Martins has affirmed that the government wants the country to be globally competitive in the nuclear sector. "Our responsibility has always been ... to ensure that, in nuclear energy, South Africa can compete with the rest of the...
Mercedes-Benz South Africa (MBSA) president and CEO Dr Martin Zimmermann describes the new S-Class as “a special place to be”, with the car creating a sense of “wellness” once you are seated inside the German brand’s flagship model. It is difficult to argue...
Water scarcity and water-quality issues are broadly recognised and understood in most political, business and civil organisations in South Africa, but solving water issues will require wide and continuous action in catchments and municipalities by organisations and...
Work is well under way on the R212-million Imvutshane dam, 30 km north-west of Stanger, in KwaZulu-Natal, which is a key link in supplying people in rural Maphumulo with a reliable source of safe drinking water.