Government’s substantial infrastructure programme outlined in the National Development Plan is expected to drive demand for steel over the next decade, said Trade and Industry Deputy Minister Mzwandile Masina.

He told over 250 delegates to the Organisation for Economic Cooperation and Development (OECD)/South Africa Workshop on Steelmaking Raw Materials, in Cape Town, that he expected steel demand, both upstream and downstream, to grow between 6% and 10% over the next decade.

This was on the back of the government’s 18 strategic infrastructure projects, ranging from rail and energy to education, water and sanitation, which would create a demand stimulus for the steel industry.

Masina said government considered the steel industry a key part of South Africa’s industrial development, as well as a significant job creator and foreign exchange earner, particularly through exports to the rest of the continent.

“While we remain the largest primary steel producer on the continent, the downstream segment of the industry holds enormous potential for investment injection, growth and development,” he commented.

He said this included the rail, energy, construction, automotive, white goods, general engineering and petrochemical industries.

Masina added that the iron-ore and steel value chain was considered a priority sector to bring about industrial development, job creation and economic transformation.

Current demand for South African steel had been slow owing to low economic growth. ArcelorMittal South Africa (AMSA) CEO Paul O’ Flaherty said, despite this, his company remained a valuable player in the economy.

“ArcelorMittal has added 1.1% to the gross domestic product of South Africa and paid $150-million in taxes,” he told delegates from OECD countries.

He said his company was committed to working very closely with government in public–private partnerships in a bid to create more jobs and drive investment. He also supported govern- ment’s call for more beneficiation in the industry.

South African Iron and Steel Institute secretary-general Johann Nel added that the primary steel industry in South Africa provided employment to more than 25 000 people, with substantial jobs being created in the indirect economy through suppliers.

However, he said there had been no significant increase in the number of people being employed by the steel mills.

With demand for steel currently lower in South Africa, AMSA had been able to export more, particularly into Africa, where, O’Flaherty said, there was significant demand and much opportunity.

South Africa had a significant steel- making industry, relative to the size of its economy, compared with similar global economies.

Only 16-million tons of steel is produced on the African continent, seven-million tons of which comes from South Africa. The country is ranked nineteenth in global steel production. Egypt is the other main steel producer in Africa. According to the World Steel Association, over 1.53-billion tons of steel is produced yearly.

O’Flaherty said reliable and affordable electri-city, skilled labour and working out how to maximise beneficiation were a few key challenges in the South African steel industry.