PETER BRUCE: Steel yourselves for China’s white elephant
Factor in the politics: China needs to reduce its pollution and metallurgy is energy hungry; Ramaphosa needs Limpopo on side
I can’t shake this story. I think it started about four years ago as a Chinese plan to build an integrated steel plant in Limpopo. At the time the steelmaker would be Hebei Iron & Steel Group, state owned, the second-biggest producer in China and the fourth-largest in the world, with the capacity to produce about 46Mt a year. It used to say it was planning to make 5Mt of steel a year from 2017. I remember mocking the news. Steel, as it is produced on a continuous casting machine in a raw slab, is a commodity. There is at any moment about 10Mt of it afloat on the high seas, looking for buyers. There’s a glut of steel in the world. It’s easy to make but it is a dirty business, from the coal used in blast furnaces capable of making liquid steel to the clatter and noise of rolling it, extruding it, turning it into lengths and plates and pipes. And it doesn’t employ a lot of people. And I remember patting myself on the back more than a year ago when I heard Hebei had shelved the idea. Ap...
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