West Coast Steel Forging Ahead

In Platinum Street in Saldanha you’ll find Duferco Steel. Drive a short way east and you’ll come across ArcellorMittal’s export-focused steel plant. Close-by is GenWest Steel and Industrial Services, and Baysteel. Travel just over 20 kilometres south and you’ll drive into a town called Yzerfontein which, of course, translates to Iron Fountain.

Iron and steel are big business on the West Coast. Close to the high-grade iron ore mines in the Northern Cape on the one side and a world-class port on the other, the region was always perfectly situated to form a vital link in the steel chain connecting South Africa’s minerals industry to the global markets. For decades, that chain has contributed greatly to South Africa’s economy.

A Downturn

Unfortunately, its contribution – together with the country’s economy – has seen a downturn. It’s not a state secret that the country has been struggling. Unemployment, load shedding and political uncertainty – together with a low grape harvest – have taken its toll that has left the normally robust steel industry with a dent in its profits.

So what’s the good news? you might be asking. Well, hold on to your hard hat because here it comes.

The Up Side

Last year, the US granted SA tariff exemptions on 161 aluminium and 36 steel products. In the Trump-era that’s great news whether you work in steel or not. And even though the exemption by itself didn’t turn things around, the following stats might just do the trick:

• Manufacturing output in SA increased by 4.6% in April 2019 compared with April 2018, with the vehicle sector manufacturing up almost 19%.  
• Wholesale trade sales rose by 5.5% in April 2019 compared with April 2018, while retail trade sales rose 2.4%.
• More units of the embattled Medupi power station are now online, and the station is now contributing 7% of South Africa’s electricity. Eskom has downgraded the country’s power-grid alert status to “yellow” from “red”, just one level above “green”.
• The rand is eyeing R14/$.

Off the Dirt Road

At the beginning of the year our tireless Minister for Trade and Industry, Rob Davies, said losing the steel industry would have resulted in “massive deindustrialisation in SA”. He added that the country “would have regressed to being iron ore producer, just exporting dirt out of the ground”. 

Strong words. However, they were spoken before the news above came to light. A lot of work has gone into preventing a calamity like the steel industry collapsing ever taking place. Here’s to hoping things will continue to look up – and the steel plants of Saldanha will continue to forge strong trade relations with the rest of the world. 

Research and Written by Hans Mackenzie
Pictures by Andrea Paarman Photography