Steel producer ArcelorMittal South Africa (AMSA) on October 20 launched its newly acquired ArcelorMittal Rail and Structures (AMRAS) facility.

This follows the successful acquisition of the former Highveld Structural Mill in eMalahleni, a transaction which was effective from August.

The official launch of the AMRAS facility was presided over by Trade, Industry and Competition Minister Ebrahim Patel, who commented that, with this being the sole mainline rail production facility in South Africa and on the continent, it showcased the country and region’s ambitions to be a globally competitive player in the steel market and bring back its past mainline rail production capacity.

He congratulated all stakeholders for bringing this to fruition, especially given that the facility was slated to be lost following the closure of Highveld Steel and Vanadium.

Patel also highlighted the localisation benefits the facility would provide, being slated to produce R500-million worth of products and displace close R1-billion of products that would otherwise have been imported.

The facility already produces rail line products for sale to mining companies and the products are also set to be exported.

The importance of localisation was reiterated by AMSA CEO Kobus Verster, who said the products needed for railway infrastructure development and rolling stock could all be sourced and developed in South Africa.

Since 2017, while operating the heavy structural mill under contract, AMSA localised about 80 000 t/y of heavy structural sections, replacing about R1-billion a year of imported steel with local South African production for the past five years.

With the conclusion of this acquisition, AMSA will create about 250 quality and permanent manufacturing sector jobs.

Patel explained that this constitutes 200 temporary jobs becoming permanent ones, and 50 additional jobs being created.

Patel lauded the impact this job creation would have on individuals, as well as the positive impact this would have on building the local community.

The acquisition of this facility is posited to provide AMSA with an African edge to producing heavy-gauge mainline rail products to high-quality standards and to facilitate extended opportunities to address the critical railway infrastructure programmes in the region.

Verster said the acquisition would enable the company to deliver global research and development and best-in-class operational practices to heavy structural rolling mills in South Africa.

This would be leveraged from the group’s expertise in manufacturing heavy structural sections and rails, with global plants around the world supplying specialised structural steel products.

GROWTH PROSPECTS
Verster also touched on AMSA’s restructuring process and strategy from the past few months, noting that this was aimed at returning the company to profitability and creating sustainable operations.

He said AMSA has enjoyed reasonable success in this regard; however, this had entailed the difficult process of adjusting its footprint and closing down some operations.

Verster highlighted as positive AMSA having diversified its raw material base, which had enabled access to the network for smaller companies.  

“A sustainable and profitable steel industry, which includes several players, is vital to ensure growth of the South African economy and for it to be a key player as the country looks to reindustrialise,” he outlined.

Verster also emphasised the importance of decarbonisation to AMSA, with the company largely in alignment with the global ArcelorMittal group’s targets of a 25% reduction in carbon emissions by 2030, and to be carbon neutral by 2050.

Verster said this would entail a three-pronged approach, namely, a focus on renewable energy and energy efficiency; operational efficiency; and carbon capture.

“AMSA will look to pursue growth opportunities as they arise; and will also support South Africa in its development aims," Verster outlined.

In this vein, Patel mentioned that AMSA and AFGRI have come together to use the land surrounding the facility for productive use, with this now entailing an industrial park with about 1 900 employees engaged in a range of activities.

Patel also mentioned that employees from the Msikaba Bridge Project were on site, with steel from the facility slated for use for this project, which he said showcases the integration of the South Africa economy.