ArcelorMittal South Africa’s Saldanha Steel Plant Restart Unlikely

Moneyweb reported that South African energy supplier Eskom has approached energy regulator Nersa for approval of a special pricing agreement that could lead to the reopening of the ArcelorMittal South Africa’s Saldanha Steel plant on the Cape West Coast of South Africa. ArcelorMittal South Africa’s request for a three-year special pricing agreement has been processed by Eskom and now just needs Nersa’s approval to implement it. Nersa has published the application for public comment. But, Nersa’s approval is however only one of the hurdles AMSA will have to clear. The other essential requirement is tariff support for rail and port logistics from Transnet Freight Rail, as well as a commitment by ArcelorMittal South Africa for the required capacity & a reliable service.ArcelorMittal South Africa requested this assistance from Transnet Freight Rail in 2020 but received an unfavorable response. Transnet Freight Rail responded that it does not have the capacity to service the logistic requirement of the steel mill and cannot offer a reduced tariff. The two parties are still trying to find a solution, but the timeline is unclear.ArcelorMittal South Africa’s Saldanha Steel closed down in 2020 when it was unable to compete internationally with other producers & 900 people working for lost their jobs. Since then, the plant has been in care and maintenance. ArcelorMittal South Africa resolved that it could utilize the plant for the processing of scrap metal to produce 600,000 tonnes of ultra-thin steel products, provided it gets the required concessions from Eskom and Transnet as well as support from the Saldanha Bay local municipality and the Western Cape government.