Sep 26, 2011
Mittal pulls back from BEE deal, confirms R1.1bn Newcastle lossBack
Newcastle|Africa|ArcelorMittal South Africa|Cleaning|Concrete|Gas|Imperial Crown Trading|Mabengela Investments|Oakbay Investments|Africa|South Africa|Newcastle Facility|Cleaning|Product|Steel|Steel Producer|Iron Ore|Prudence Mtshali|Sandile Zungu|Zico|Reinforcing
© 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 (150 word limit)
Updated 4 hours ago A global transportation price index has ranked South Africa the cheapest overall for bus, trains and aeroplane travel for every 100 km out of 51 countries. Online platform GoEuro compared the average price a 100 km of rail, road or air movements between the most...
Updated 4 hours ago The processing of the Government Shareholder Management Bill, which was yet to be tabled before Parliament by the Department of Public Enterprises (DPE), would have to be sped up, Portfolio Committee on Public Enterprises chairperson Dipuo Letsatsi-Duba said on...
Updated 5 hours ago Gautrain bus drivers went on strike on Wednesday, forcing certain bus services to be suspended, the Bombela Concession Company said. "Please note that a wildcat strike by Gautrain bus drivers in Johannesburg has resulted in the suspension of bus services from Park,...
Recent Research Reports
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...
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.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
The Built Environment unit at the Council for Scientific and Industrial Research (CSIR) has developed a cost-competitive ultrathin concrete pavement surface that, for the upgrading of unpaved roads to paved roads, is more durable than many other pavement alternatives...
The Southern African Large Telescope (SALT), based at Sutherland in the Karoo region in the Northern Cape province, is promising to become an important instrument for research into dark matter. "SALT is shaping up to be very important for answering questions about...
The South African tool, die and mouldmaking (TDM) industry is being revitalised to locally produce the tools, dies, moulds and fixtures required by the manufacturing sector. Local TDM capability is key to enable the manufacturing industry to remain competitive, says...
Misfortune often finds its roots in the smallest of things. Such as a centimetre or two. Or is that in inch? Perhaps a foot? Swedish or Dutch? The French had reason to blush in May as it became apparent that national rail operator SNCF had ordered 2 000 trains that...
The repositioning of the Fibre Processing & Manufacturing Sector Education and Training Authority (FP&M Seta) and its business processes will ensure improved performance in reaching strategic targets and in providing customer service.