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Cape Town - Former ministers of trade and industry had to pay for allowing ArcelorMittal SA [JSE:ACL] (Amsa) to "plunder" the country for decades.
This was a request directed by a senior ANC MP, Professor Ben Turok, to the portfolio committee on trade and industry on Wednesday.
Expressing disbelief, he asked what on earth the former ministers had done in the name of our country.
The committee was discussing the crucial importance of the steel price to a developing economy – and to the manufacturing sector in particular.
In a letter to the committee Kumba Iron Ore [JSE:KIO] said that, according to information from Amsa, Amsa’s plants remained profitable even though an interim price agreement was currently in place.
Kumba said, further, that it supported the establishment of a new steel manufacturer for South Africa to meet increasing domestic demand.
From a submission by the department of trade and industry it was clear that for the past decade the department had been all talk, while Amsa had been permitted repeatedly to take unilateral decisions in determining the steel price.
Turok and other MPs reacted strongly to the department of trade and industry’s submission on the factors ultimately leading to the dispute between Amsa (Iscor’s forerunner) and Kumba Iron Ore.
In 2005 and 2009 Amsa’s steel prices had been the highest in the world, despite its advantageous agreement with Kumba.
Turok did not mention ministers by name but, since Iscor’s privatisation in 2001, after which it became Amsa, first Alec Erwin and then Mandisi Mpahlwa had been the ministers in that portfolio.
Subsequently, in the run-up to and during the electricity crisis, Erwin had become minister of public enterprises.
Nimrod Zalk, deputy director-general for industrial development at the department of trade and industry, told the committee that that history had given rise to the most comprehensive investigation into domestic steel prices in the past decade.
The advantages that Amsa had received from its access to cheap iron ore from Kumba had never been passed on to the manufacturing sector.
Instead, Amsa had made super profits. Foreign sales had doubled to 30 000 tons a year and domestic sales had remained at around 10 000 tons a year for the past 10 years.
Zalk said that the task team put together to investigate alternative policy options for determining the steel price in South Africa, while an interim price agreement between Amsa and Kumba was in place, could within the next month or two present its recommendations to, inter alia, the minister of trade and industry, Dr Rob Davies, and Ebrahim Patel, minister of economic development.
These would have to be enforceable policies because the department had learnt that “moral suasion” – to get Amsa to charge fair prices – had been ineffective.
At the meeting the ANC’s Sisa Njikelana submitted an official proposal for price regulation in the steel industry.
- Sake24.com
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