Bloomberg reported that South Africa’s Cabinet endorsed measures that seek to cut local steel prices including the possibility of new export taxes on steel and iron ore.
A group set up by the Department of Trade and Industry in 2010 to study how to put local steel prices into the “lowest quartile” of global levels to spur manufacturing and jobs recommended policies including promoting new steel projects by offering priority access to electricity.
Cabinet said that antitrust laws may also be amended to spur competition.
Melinda Moore, a bulk commodity sales executive at Standard Bank Plc in London, said by e mail said that “The Cabinet is promoting new steel investments for the country despite an existing global glut of over 500 million tons of steel. It is also encouraging the use of local electricity that is already in short supply for existing domestic ferrochrome producers.”
Additional export taxes would add to the strain on a mining industry already coping with the effect of a series of strikes that closed shafts and raised wages. Kumba Iron Ore Ltd., a unit of Anglo American Plc, produces the bulk of the country’s iron ore. ArcelorMittal South Africa Ltd. and Evraz Highveld Steel & Vanadium Ltd are the nation’s two publicly traded steelmakers.
