Amsa opposes carbon taxes

Johannesburg - The National Treasury's proposed carbon tax policy could have a devastating effect on ArcelorMittal SA [JSE:ACL] (Amsa) finances, CEO Nonkululeko Nyembezi-Heita said on Tuesday.

The carbon tax discussion paper published in December 2010 "could have a significant impact on the company's financial performance", she said after the release of the steel manufacturing company's annual results.

"It's a non-starter from our perspective," she said.

Chief financial officer Rudolph Torlage said based on the proposals in the document, it would have cost them 50% of earnings before interest, taxes, depreciation and amortisation (Ebitda) for 2010 in carbon tax.

ArcelorMittal SA was talking to other groups in the industry and would submit its comments on the paper to the government, Nyembezi-Heita said.

Comments had to be submitted by February 28.

Nyembezi-Heita said they were not going to panic, but use the opportunity to "engage". She said often these things in South Africa "start at one point but don't end there".

The cabinet had approved the draft carbon tax policy and it was published for comment in December 2010.

The policy presented the environmental and economic rationale for carbon tax measures to address climate change, Minister in the Presidency Collins Chabane said when announcing it had been approved.

"It focuses on the merits for carbon taxes to price carbon and seeks to (among other things) influence consumer and producer behaviour through a price mechanism," he said.

The draft policy tabled three carbon emissions tax options for consideration.

These were a direct tax on actual measured emissions, a fossil fuel input tax based on carbon content of fuels, and an output tax that could be applied to emitters where fuel was burnt.