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Govt committed to securing future of South African steel sector – Davies

Source: Creamer Media's Engineering News Date: 25 April 2016

Government will pull out all the stops to ensure the sustainability of the local steel manufacturing sector, Trade and Industry Minister Dr Rob Davies stressed on Wednesday.

He noted during the Department of Trade and Industry’s Budget Vote that UK Prime Minister David Cameron recently had to cut short his holiday to attempt to find a solution to the UK’s steel crisis.

“The UK’s steel sector is battling to remain afloat amid a global steel glut and, a few weeks ago, Cameron called on UK industry to support British steel producers by buying local,” Davies pointed out.

He assured the domestic steel industry that the South African government had remained seized with working to ensure that it retained an “increasingly competitive primary steelmaking capacity” in South Africa.

In a media briefing prior to the Budget Vote, the Minister said that the objective of government was to surmount the current challenging global economic situation and ensure that South Africa’s primary steel manufacturing sector survived.

“To this end, we have had to engage in difficult negotiations with all the industry’s stakeholders to support the sector, which has resulted in the imposition and proposed imposition of new tariffs on the influx of low-cost steel imports.

“We are also studying how this measure can be linked with pricing decisions that are not going to harm downstream steel users in South Africa. This is not an easy matter,” stated Davies.

The Minister added that while government was committed to protecting the sector, a quid pro quo was required by primary steel producers regarding job retention, undertaking new investments and equitable steel pricing policies.

“If we do not protect our primary steel manufacturing sector, we will be wholly reliant on imported steel for all of our downstream industries. South Africa would be beholden to the vagaries of international markets and would likely not always be in possession of sufficient steel supplies, which could significantly hamper our manufacturing flexibility and ability to produce goods on time,” Davies contended.

He further noted that he could not think of any industrialised economy that did not possess a primary steelmaking sector.

“Additionally, South Africa is an iron-ore-producing country and it makes little sense not to have the capability to beneficiate the iron-ore locally by producing steel and instead send out raw ore and import it back as steel products,” Davies remarked.

He added that new measures would be announced to further protect and boost the country’s primary steel manufacturing sector in the coming months; however, Davies was not in a position to announce these yet.

Government will pull out all the stops to ensure the sustainability of the local steel manufacturing sector, Trade and Industry Minister Dr Rob Davies stressed on Wednesday.

He noted during the Department of Trade and Industry’s Budget Vote that UK Prime Minister David Cameron recently had to cut short his holiday to attempt to find a solution to the UK’s steel crisis.

“The UK’s steel sector is battling to remain afloat amid a global steel glut and, a few weeks ago, Cameron called on UK industry to support British steel producers by buying local,” Davies pointed out.

He assured the domestic steel industry that the South African government had remained seized with working to ensure that it retained an “increasingly competitive primary steelmaking capacity” in South Africa.

In a media briefing prior to the Budget Vote, the Minister said that the objective of government was to surmount the current challenging global economic situation and ensure that South Africa’s primary steel manufacturing sector survived.

“To this end, we have had to engage in difficult negotiations with all the industry’s stakeholders to support the sector, which has resulted in the imposition and proposed imposition of new tariffs on the influx of low-cost steel imports.

“We are also studying how this measure can be linked with pricing decisions that are not going to harm downstream steel users in South Africa. This is not an easy matter,” stated Davies.

The Minister added that while government was committed to protecting the sector, a quid pro quo was required by primary steel producers regarding job retention, undertaking new investments and equitable steel pricing policies.

“If we do not protect our primary steel manufacturing sector, we will be wholly reliant on imported steel for all of our downstream industries. South Africa would be beholden to the vagaries of international markets and would likely not always be in possession of sufficient steel supplies, which could significantly hamper our manufacturing flexibility and ability to produce goods on time,” Davies contended.

He further noted that he could not think of any industrialised economy that did not possess a primary steelmaking sector.

“Additionally, South Africa is an iron-ore-producing country and it makes little sense not to have the capability to beneficiate the iron-ore locally by producing steel and instead send out raw ore and import it back as steel products,” Davies remarked.

He added that new measures would be announced to further protect and boost the country’s primary steel manufacturing sector in the coming months; however, Davies was not in a position to announce these yet.

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