The Department of Trade and Industry understands that as a consequence of the private interim iron ore pricing agreement between Kumba Iron Ore (KIO) and Arcelor Mittal South Africa (AMSA) that the iron ore surcharge will be removed, but replaced by an increase in the base price of steel.
This increase in the base price will effectively pass through the cost of iron ore, established in the interim agreement, to steel purchasers.
The Department of Trade and Industry remains extremely concerned about the high price of steel in the South African economy, which was amongst the highest in the world prior to the introduction of the iron ore surcharge.
An inter-departmental task team, comprising the Departments of Trade and Industry, Economic Development and Mineral Resources, has been established to make recommendations on appropriate policy tools to ensure in the long run:
- the viability and cost-competitiveness of local steel production, and
- a competitive steel pricing regime to support the development and deepening of value added manufactured products in downstream industries.
This team will report back to ministers with its recommendations in the near future.
Media contact:
Sidwell Moloantoa Medupe
Cell: : 079 492 1774
E-mail: MSMedupe@thedti.gov.za
Source: Department of Trade and Industry
