ArcelorMittal puts focus on protection
Steel markets still subdued despite 10% import tariff
ArcelorMittal SA is planning to step up its efforts to protect the local steel industry from cheap Chinese imports.
Speaking at the company’s results presentation on Friday, ArcelorMittal SA CEO Wim de Klerk said a concentrated effort by all the stakeholders in the steel industry was needed.
"We’ve seen the poultry sector take a collective stand and I believe that is what we should do as well. We will work tirelessly with unions, government and the downstream industry to protect the sector from imports. There will be a big effort and focus on this issue this year," said De Klerk.
He said the domestic and export markets in which the company operated continued to be subdued because of
There is a 10% import tariff on steel. Despite this, 1.2-million tonnes were imported into the country. De Klerk said this reflected the need for safeguard measures for primary steel manufacturers to address the surge in imports.
Concerning the rehabilitation of the Thabazimbi mine in Limpopo, De Klerk said the company would be able to provide more details about its future once a due diligence report had been completed.
ArcelorMittal SA will take full management control of the processes and costs related to the rehabilitation of Thabazimbi, which is to be transferred by the Sishen Iron Ore Company (SIOC) in April.
Until 2014, Thabazimbi was a captive mine owned and run by SIOC, supplying ore exclusively to and funded by ArcelorMittal. As a result, ArcelorMittal SA is accountable for 96% of the mine’s current rehabilitation liability. SIOC is responsible for the site’s management and the remaining liability. Mining operations at Thabazimbi ceased in September 2016.
"The transfer is us wanting to manage our own destiny. We won’t mine the way Kumba has mined. Maybe there is a way to do it differently. We owe it to the Thabazimbi community to try. We are doing due diligence. Hopefully, when we meet next we will have more information," said De Klerk.
In the year to December 2016, ArcelorMittal SA narrowed its operating loss to R1.1bn from R4.7bn in the year earlier period.
An 8% increase to R7,282/tonne in the average selling price of steel helped the company grow revenue 5% to R32.7bn, despite the volume of liquid steel it produced declining slightly to 4.77-million tonnes.
Thanks to a rights issue, supported mainly by its Luxembourg-listed parent, ArcelorMittal SA slashed its debt of nearly R3bn to R290m.
Chief financial officer Dean Subramanian said 2016 had been a significant year as the company changed its thinking on how it managed cash flow and its capital requirements.
ArcelorMittal SA said the outlook remained subdued due to low economic growth and lack of infrastructure spend.