Cape Town - The South African government is working closely with all stakeholders in the steel sector to secure agreement on a comprehensive package of measures to support South Africa’s primary steel production capabilities, the Department of Trade and Industry (dti) said on Friday.
The dti added that a wide range of countries belonging to the Organisation for Economic Co-operation and Development (OECD) as well as developed countries have already implemented similar tariff protection measures.
"The steel crisis results from the fact that there is a global glut of steel arising from the effects of the global recession and excess installed capacity and supply," explained the dti.
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Minister of Trade and Industry Rob Davies has assented to tariff increases for three steel products. Investigations into another eight product lines have been finalised and await government approval. This follows due process involving the International Trade Administration Council (ITAC), according to the dti.
The dti emphasised that it is extremely important that tariff protection measures for primary steel producers do not result in higher steel prices being "passed on" to downstream, steel intensive manufacturing sectors.
"These sectors are labour intensive and any measures, which might erode the competitiveness of secondary steel intensive manufacturers, must be avoided," said the dti.
"It is for this reason that government is very carefully weighing up the basket of measures under consideration and is consulting widely with all stakeholders, the downstream users included."
According to the dti Davies, Minister of Economic Development Ebrahim Patel and senior officials of both departments have held extensive talks both with executives of Arcelor-Mittal South Africa (Amsa) as well as with senior executives of the company at the recent World Economic Forum (WEF) in Davos.
"A further meeting will be convened by government in the near future to finalise the package of measures proposed by government," according to the dti.
"These measures are designed to secure the primary steel producers, safeguard downstream users and protect employment across the entire steel value chain. Government is confident that agreement will be reached in this regard," it stated.
Once final agreement is reached, an announcement setting out the package of measures to be adopted, in addition to those already implemented, will be made.
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