24314_steel_09

October 2009
SOUTH AFRICA’S
STEEL INDUSTRY

www.researchchannel.co.za
South Africa’s steel industry 2009 October 2009
Contents
Global market 2
Production 2
Major steel producing countries 2
Major steel producers 4
Iron-ore supply to the steel industry 4
Stainless steel 6
Consumption 6
South African market 7
Production 7
Products 7
Employment 7
Consumption 7
Trade 8
Price fixing 8
Environmental issues 9
Primary carbon steel producers in South Africa 10
ArcelorMittal South Africa 10
Highveld Steel & Vanadium 14
Scaw Metals 16
Cape Gate 18
Cape Town Iron & Steel Works 19
Stainless steel producers in South Africa 20
Columbus Stainless 20
Main sources 21
The material contained in this report was compiled by Martin Zhuwakinyu and the Research Unit of Creamer Media (Pty) Ltd, based
in Johannesburg, South Africa. To contact Creamer Media call +27 11 622 3744 or email subscriptions@creamermedia.co.za.

1
Abbreviations
BEE black economic empowerment
Bric Brazil, Russia, India and China
Capex capital expenditure
Cisco Cape Town Iron & Steel Works
DRI Direct reduction iron
EU European Union
ISSF International Stainless Steel Forum
KIO Kumba Iron Ore
Nafta North American Free Trade Agreement
Saisi South African Iron and Steel Institute
US United States

2
Global market
Production
World crude steel output in 2008 amounted to
1 326,5-million tons, down from 1351,3-million tons
in 2007. This was largely due to the global industry
responding to the economic downturn with production
cuts, to ensure that supply matched demand. Although
this represented a 1,2% decline on the previous year’s
production, this was the second consecutive year that
production had exceeded the 1,3-billion-ton mark.
Nearly all the major steel producing regions, including
the European Union, North America, South Africa and
the Commonwealth of Independent States reported
declines. However, the Middle East and Asia, particu-
larly China showed positive growth during 2008.
Major steel producing countries
China is the world’s biggest steelmaker and, in 2008,
became the first country to surpass the 500-million-ton
mark, producing 500,5-million tons in the year up from
the 494,9-million tons produced in 2007, bringing the
country’s share of global steel production in 2008 to
38%.
Since April 2009, Chinese production has shown a
steady month-on-month increase. In July 2009, the
country produced 50,7-million tons of steel, 12,6%
up on July 2008’s figure. This was the first time that
the Asian giant produced more than 50-million tons
in a month, accounting for almost 50% of global
production.
International pressure in recent years had seen China
taking measures to curb steel exports, including a
slew of export rebate cuts and export tax increases.
However, falling world demand and declining exports
saw the Chinese government reversing direction. In
April 2009, it increased export rebates to 13% on a
range of higher-value products, mostly flat products,
cold-rolled products and coated sheets, and stainless
steel. June 2009 saw further products – including hot-
rolled coil, hot-rolled plate and heavy sections – receive
an export rebate of 9%.
According to World Steel Association statistics, Japan,
the US, Russia and India maintained their positions in
the top-five bracket in 2008, producing 118,7-million
tons; 91,4-million tons; 68,5-million tons and 55,2-
million tons, respectively. However, all these countries,
except India, produced less crude steel in 2008 than
they did in 2007.
The period from January 2009 to June 2009 – when
production fell by nearly 41%, to 37-million tons – was
the worst half-year for the Japanese steel industry in
more than four decades, but there appears to have
been an uptick, fuelled by exports to China. The June
2009 production figure of 6,89-million tons represents
a 6,3% increase on the previous month’s figure of
6,48-million tons, although it reflects a 33,6% drop,
compared with the June 2008 production figure of
10,4-million tons.
The US produced 24,5-million tons during the half-year
to the end of June 2009. A 51,8% drop on the previ-
ous year’s figure of 50,9-million tons. Few steelmakers
expect a return to 2008 output levels in the next five
years. The US Metals Report for the third quarter of
2009, released in July 2009, notes that the return of
relative stability to the US automotive industry is a
cause for optimism, but hastens to add that sentiment
cannot be said to be bullish.
In Russia, where production for the first half of 2009
slumped by 30%, to 26,8-million tons, the steel indus-
try continues to struggle. However, in July 2009, Prime
Minister Vladimir Putin gave the assurance that govern-
ment “will try [its] best to stimulate demand for metals
…. We will place orders with construction companies,
automakers and other traditional [steel] consumers”.
India has experienced steady growth in the steel
industry since independence from Britain more than
five decades ago and, in the first six months of 2009,
produced 27,6-million tons of steel, a slight increase
from the 27,2-million tons produced in the six months
to June in 2008.
Other significant producers in the steel industry
are South Korea, which produced 53,5-million
tons in 2008, Germany (45,7-million tons), Ukraine
(37,1-million tons), Brazil (33,7-million tons) and Italy
(10-million tons).
China’s crude steel output has more than doubled since
2002, when 222-million tons were produced.

3
Major steel-producing countries 2007 and 2008
Country 2008 2007
China 1 500,5 1 494,9
Japan 2 118,7 2 120,2
United States 3 91,4 3 98,1
Russia 4 68,5 4 72,4
India (e) 5 55,2 5 53,1
South Korea 6 53,6 6 51,5
Germany 7 45,8 7 48,6
Ukraine 8 37,1 8 42,8
Brazil 9 33,7 9 33,8
Italy 10 30,6 10 31,6
Turkey 11 26,8 11 25,8
Taiwan, China 12 19,9 12 20,9
Spain 13 18,6 14 19,0
France 14 17,9 13 19,2
Mexico 15 17,2 15 17,6
Canada 16 14,8 16 15,6
United Kingdom 17 13,5 17 14,3
Belgium 18 10,7 18 10,7
Iran 19 10,0 20 10,1
Poland 20 9,7 19 10,6
South Africa 21 8,3 21 9,1
Australia 22 7,6 22 7,9
Austria 23 7,6 23 7,6
Netherlands 24 6,9 24 7,4
Czech Republic 25 6,4 25 7,1
Egypt 26 6,2 28 6,2
Malaysia (e) 27 6,1 26 6,9
Argentina 28 5,5 31 5,4
Thailand (e) 29 5,5 30 5,6
Sweden 30 5,2 29 5,7
Romania 31 5,0 27 6,3
Saudi Arabia 32 4,7 35 4,6
Slovak Republic 33 4,5 32 5,1
Finland 34 4,4 36 4,4
Kazakhstan 35 4,3 34 4,8
Venezuela 36 4,2 33 5,0
Indonesia (e) 37 3,6 37 4,0
Luxembourg 38 2,6 38 2,9
Belarus 39 2,6 40 2,4
Greece 40 2,5 39 2,6
Vietnam (e) 41 2,2 42 2,0
Hungary 42 2,1 41 2,2
Others 24,3 24,3
World 1 326,5 1 351,3
(e): estimate
Source: World Steel Association

4
Major steel producers
There has been significant consolidation in the global
steel industry during the last few years, with the
$38,3-billion merger between pan-European company
Arcelor and Indian company Mittal in 2006. In 2008,
ArcelorMittal was ranked as the top steel-producing
company, accounting for about 103-million tons of
global steel production.
In April 2007, the second-largest merger, entailing the
acquisition of Anglo-Dutch steel firm Corus by India’s
Tata Steel for $12-billion, was concluded. The company
was the world’s eighth-largest steel producer in 2008,
producing 24,4-million tons of steel.
Other Indian companies have also expanded in recent
years, including Essar, which acquired Canada’s
Algoma for C$1,8-billion in 2007. In 2008, Essar
produced 3,4-million tons of steel. In the same year,
in the US, Gerdau-America completed its $4,2-billion
purchase of Chaparral Steel. The company produced
20,4-million tons in 2008.
In 2008, Russia’s Severstal bought into the US steel
industry, taking over Sparrows Point and WCI for $80-
million and $140-million, respectively. The company’s
steel production totalled 19,2-million tons in 2008.
In China, Tangshan and Hangang merged, in June
2008, to form the Hebei Steel group. The group is the
biggest steelmaker in China and in 2008 produced
33,3-million tons.
The biggest merger story at the beginning of 2009,
was the proposed Russian mega merger involving
State-owned nickel-miner Norilsk and several steel
producers, including Metalloinvest, Evraz, Mechel and
Uralkali, prompted by a need for the companies to
refinance their debts. Such a merger would create a
company with a market capitalisation of $70-billion to
$100-billion.
In spite of all this activity, many commentators insist
that the industry is still too fragmented and expect
more acquisitions, mergers and alliances to take place
as producers seek horizontal integration with other
mills and vertical integration with raw material suppliers
and steel distributors to secure their futures.
Iron-ore supply to the steel industry
The largest exporters of iron-ore – the key steelmak-
ing ingredient – are Australia, which exported 295-
million tons in 2007, Brazil (275-million tons), India
(100-million tons), South Africa (28-million tons) and
Canada (27-million tons).
Brazilian company Vale; Anglo-Australian group
Rio-Tinto and Australia-headquartered BHP Billiton are
the world’s biggest iron-ore-mining companies and are
currently spending tens of billions of dollars to expand
production capacity.
In Brazil’s Pará state, Vale is developing the Carajás
Serra Sul project, which, when it comes on stream in
early 2012, will boost the group’s output by 90-million
tons a year. The project’s price tag is $10,1-billion.
In February 2008, BHP Billiton announced the $4,8-
billion Rapid Growth Project 5, in Western Australia, as
the next step in its phased growth drive. Production is
scheduled to start in the second half of 2011, raising
output from 50-million tons to 205-million tons.
In July 2008, Rio Tinto announced plans to invest
$2,15-billion in a project to increase production at
the Corumbá mine, in Brazil, from two-million tons a
year to 12,8-million tons a year. However, the project,
initially intended to enter into production in the last
quarter of 2010, was delayed owing to weak demand.
Subsequently, in January 2009, Rio Tinto entered
into an agreement to sell the mine to Brazil’s Vale for
$750-million. The acquisition of the iron-ore mining
operations was completed in September 2009.
Rio Tinto continues to expand production at its Pilbara
operations, in Western Australia, targeting an initial
yearly output of 220-million tons, with this figure ex-
pected to eventually rise to 600-million tons.
In the longer-term, Rio Tinto plans to an iron-ore in
mine Simandow, Guinea, which it calls the world’s
largest undeveloped iron-ore province. The resources
giant reported in December 2008, however, that it
would delay its planned $6-billion investment in the
project. Production was scheduled to start in 2013, at
eight-million tons a year, ramping up to 70-million tons
by 2018.
Despite the challenges in the global economy South
Africa’s Kumba Iron Ore (KIO) is sticking to the group’s
strategy to grow export iron-ore volumes to 44-million
tons by 2013, with the development of its opencast
Sishen South mine, in the Northern Cape. Production
is expected to start in the first half of 2012 and is
expected to peak in 2013. The project, will cost an
estimated R8,5-billion.

5
Top steel-producing companies 2007 and 2008
2008 2007 2008 2007
1 103,3 1 116,4 ArcelorMittal 41 6,9 40 7,4 Jiuquan Steel
2 37,5 2 35,7 Nippon Steel1
42 6,9 41 7,3 Salzgitter5
3 35,4 5 28,6 Baosteel Group 43 6,8 43 6,9 Voestalpine
4 34,7 4 31,1 POSCO 44 6,5 39 7,8 Jianlong Group
5 33,3 NA 31,1 Hebei Steel Group 45 6,5 44 6,8 BlueScope
6 33,0 3 34,0 JFE 46 6,4 46 6,4 Metalloinvest
7 27,7 11 20,2 Wuhan Steel Group 47 6,4 47 6,4 Beitei Steel
8 24,4 6 26,5 Tata Steel2
48 6,1 60 5,2 Guofeng Steel
9 23,3 8 22,9 Jiangsu Shagang Group 49 6,1 51 6,1 SSAB
10 23,2 10 21,5 US Steel 50 6,0 58 5,4 Erdemir
11 21,8 NA 23,8 Shandong Steel Group 51 5,9 54 5,9 AK Steel
12 20,4 12 20,0 Nucor 52 5,9 52 6,1 Mechel
13 20,4 13 18,6 Gerdau 53 5,7 53 6,0 Nanjing Steel
14 19,2 15 17,3 Severstal 54 5,6 42 7,0 Ilyich
15 17,7 17 16,2 Evraz 55 5,4 61 5,0 Tonghua Steel
16 16,9 14 17,9 Riva 56 5,3 56 5,6 Xinyu Steel
17 16,0 NA 16,2 Anshan Steel 57 5,2 57 5,5 HKM6
18 15,9 16 17,0 ThyssenKrupp3
58 5,1 NA 4,5 Sanming Steel
19 15,0 18 14,2 Maanshan Steel 59 5,0 59 5,3 CSN
20 14,1 20 13,8 Sumitomo Metal Ind 60 4,7 63 4,6 HADEED
21 13,7 19 13,9 SAIL 61 4,5 68 4,4 Tianjin Tiantie Group
22 12,2 23 12,9 Shougang Group 62 4,4 72 4,0 Hebei Jinxi Group
23 12,0 21 13,3 Magnitogorsk 63 4,3 62 5,0 Steel Dynamics
24 11,3 30 9,7 Novolipetsk 64 4,3 69 4,1 Pingxiang Steel
25 11,3 26 11,1 Hunan Valin Group 65 4,3 65 4,5 Ezz Group
26 11,0 27 10,9 China Steel Corporation 66 4,0 71 4,1 Nisshin
27 10,4 22 13,1 Techint4
67 4,0 70 4,1 Tianjin Steel Pipe
28 10,0 28 10,1 IMIDRO 68 3,9 64 4,6 Zaporizhstahl
29 9,9 NA 11,6 Industrial Union of Donbass 69 3,8 NA 3,0 JSW Steel
30 9,9 29 10,0 Hyundai Steel 70 3,7 73 4,0 Lion Group
31 9,8 34 8,8 Baotou Steel 71 3,7 75 3,5 AHMSA
32 9,2 31 9,3 Taiyuan Steel 72 3,7 NA 3,0 ICDAS
33 9,0 33 9,0 Anyang Steel 73 3,6 NA 4,3 SIDOR6
34 8,2 32 9,1 Metinvest 74 3,6 78 3,5 Hangzhou Steel
35 8,2 37 8,1 Celsa 75 3,5 NA 2,7 Hebei Jingye Steel
36 8,1 38 8,1 Kobe Steel 76 3,5 77 3,5 Chongqing Steel
37 8,0 35 8,7 Usiminas 77 3,4 NA 2,7 Commercial Metals
38 7,5 45 6,6 Panzhihua Steel 78 3,4 74 3,6 Essar Steel
39 7,5 50 6,2 Rizhao Steel 79 3,4 79 3,5 Tokyo Steel
40 7,4 NA 7,6 Benxi Steel 80 3,1 NA 3,2 Vizag Steel
(1) - includes part of Usiminas
(2) - includes Corus
(3) - 50% of HKM included in ThyssenKrupp
(4) - includes partial tonnage of SIDOR
(5) - includes part of HKM
(6) - total production
NA: not applicable

6
KIO also reported in July 2009 that it planned on
spending R4-billion a year on its capital projects going
forward.
Stainless steel
World stainless steel production in 2008 fell by 6,9% on
the 2007 figure, to 25,9-million tons, the second year
in a row that that world stainless steel production de-
creased. The International Stainless Steel forum has at-
tributed this decline to the global economic slowdown.
Overall stainless steel production in Asia without China
– the largest producing region – declined by 10,3%,
to 8,1-million. Asia without China and China now ac-
count for about 31% and 27% of global production,
respectively. China has been the driving force behind
stainless steel production during the past few years,
but the country’s production during 2008 declined by
3,6%, to 6,9-million.
In the second-biggest producing region, comprising
Western Europe and Africa, production in 2008 dipped
by 4,8%, to 8,3-million tons, while the Americas re-
gion decreased stainless crude melting by 11,1%, to
2,3-million tons.
Production in Central and Eastern Europe dipped by
8,6%, to 333 000 t.
Over the past few years, the stainless steel market has
seen major changes in the types of stainless produced.
The sharp increase in nickel prices during 2006 and
2007 saw a shift away from chromium-nickel grades
to low nickel or nickel-free grades. Consequently,
chromium stainless steels and chromium-manganese
grades have become increasingly important.
Consumption
According to the World Steel Association, apparent
steel consumption is forecast to decline by 14,9% du-
ring 2009, to 1,02-billion tons, compared with a decline
of 1,4%, to 1,198-million tons, in 2008.
However, the association expects that demand for
steel will stabilise in the latter part of 2009, leading to a
mild recovery in 2010.
In the North American Free Trade Agreement (Nafta)
region, the biggest decline in steel demand this year is
expected to take place in the US, where apparent steel
use is expected to fall by 36,6%.
Outside Nafta, Europe will be the most affected region,
with a 28,8% decline in the 27-member European
Union, or EU27.
Japanese steel use is forecast to fall by 20,4% in 2009.
India is projected to increase apparent steel use by 2%
in 2009, and consumption in the Bric countries (Brazil,
Russia, India and China) is expected to contract by 5,9%.
Projected apparent steel use for the world, excluding
Bric, is down 22,3% in 2009.
China is expected to witness negative growth of 5% in
apparent use in 2009, as the prevailing global economic
crisis hits the country’s exports, and also as a result of
the country’s slowing economy. The last time China’s
apparent steel consumption contracted was in 1995,
when a decline of 17,2% was recorded, following the
real estate bubble burst.
Stainless steel, also known as inox steel or inox, is defined
as a steel alloy with a minimum of 11% chromium content
by mass. It is this metal chromium added to ordinary steel
that gives it a bright shiny gloss and which makes it highly
resistant to tarnishing and rusting. This rust-resisting
property, which we call “corrosion resistance” is what sets
stainless steel apart from most other forms of steel.
Stainless and heat-resisting crude steel
production 2007 and 2008 (‘000 metric tons)
Region 2007 2008
Western Europe/Africa 8 669 8 272
Central and Eastern Europe 364 333
The Americas 2 604 2 315
Asia (with China) 16 000 -
Asia (without China) - 8 068
China - 6 943
World 27 836 25 930
Source: International Stainless Steel Forum
Apparent steel use 2002–2008
(million tons of finished steel products)
2006 2007 2008
Apparent global steel
consumption
1 134 1 214,8 1 198,1

7
South African market
South Africa boasts five primary carbon steel pro-
ducers: ArcelorMittal South Africa, Highveld Steel &
Vanadium, Scaw Metals, Cape Gate, and Cape Town
Iron & Steel Works (Cisco). The country also has one
primary stainless steel producer, Columbus Stainless.
The primary steel industry is a significant contributor
to the South African economy and earns considerable
amounts of foreign exchange. In 2008, the country
was ranked twenty-first in terms of global crude steel
production, by the World Steel Association.
Production
South Africa is the continent’s largest steel producer, ac-
counting for 48% of total crude steel production in 2008.
Total South African crude steel production, as re-
ported by members of the South African Iron and
Steel Institute (Saisi), amounted to an estimated 8,176-
million tons in 2008, a decline of 9% when compared
with the 8,986-million tons produced in 2007, repre-
senting about 0,6% of world production. Of this about
5,5-million tons is consumed domestically.
Carbon steel deliveries by the country’s primary steel
industry amounted to an estimated 6,535-million in
2008, a decline of 10,6% on 2007. A total of 5,415-
million tons was sold on the local market, representing
an increase of 1,7% on the preceding year’s produc-
tion. Exports amounted to 1,12-million, a decrease of
43,6% on the 2007 figure.
A total of 1,27-million tons of ferrous scrap was ex-
ported in 2008, while 0,086-million tons was imported.
Products
The primary carbon steel products and semifinished
products manufactured in South Africa include billets;
blooms; slabs; forgings; light, medium and heavy sec-
tions and bars; reinforcing bar; railway track material;
wire rod, seamless tubes; plates; hot- and cold-rolled
coils and sheets; electrolytic galvanised coils and
sheets; tinplate; and prepainted coils and sheets.
The primary stainless steel products and semifinished
products manufactured in South Africa include slabs,
plates and hot- and cold-rolled coils and sheets.
Employment
Employment statistics for 2008 have not been
made available, but Saisi reports that, at the end
of 2007, its member companies employed 16 482
people permanently. They also employed 16 438
contractors.
Consumption
The biggest South African consumer of steel pro-
ducts is the manufacturing sector, which absorbed
2 529 873 t of the total production for the first nine
months of 2008. Within the manufacturing sector, the
major subsectors in terms of steel product consumption
are the structural steel subsector, which accounted for
904 920 t from January to September 2008, compared
with 986 215 t for the whole of 2004 and 1 138 192 t
for the whole of 2007. The cables, wire products and
gates subsector is also a significant component of the
manufacturing sector from a steel products consump-
tion point of view, accounting for 599 473 t during the
first three quarters of 2008. The automotive subsector
consumed 257 829 t during the nine-month period – it
consumed 349 464 t in 2007.
The second biggest consumer is the building and
construction sector, which accounted for 1 220 352 t
during the nine-month period.
The mining sector is also a significant consumer of
steel products, with its consumption increasing from
146 396 t in 2004 to 164 132 t in 2005, 211 121 t in
2006 and 235 783 t in 2007. Consumption for the first
nine months of 2008 came in at 197 717 t. The increase
in steel consumption over the last few years is attribut-
able to the significant capital investment that has taken
place in the sector.
Given the delay or suspension of mining projects, ne-
cessitated by the current global economic slowdown,
it is expected that the mining sector’s steel demand in
2009 will be dented.
In fact, several manufacturing subsectors will be
affected by the economic squeeze, with the automotive
subsector, for instance, having said vehicle production
and, therefore, demand for steel products, will decline
in 2009.

8
Trade
South Africa is a net exporter of steel products, with
the rest of Africa accounting for 37% of total exports in
2008, according to Saisi. Other major export markets
are the Far East and the EU27, each of which accounted
for 22% in 2008, South America (5%), the Middle East
(6%), and Nafta countries and African island nations
(4% each).
A staggering 50% of the carbon, alloy and stain-
less steel products imported into South Africa in
2008 emanated from the Far East, with the EU27
accounting for 43%, the Middle East 3%, and the
Nafta member countries 2%. Eastern Europe, the
former Soviet Union and the rest of Africa accounted
for 1% each.
Price fixing
Following an investigation into potential collusion in
the steel industry, which was initiated in April 2008, the
Competition Commission has recommended that the
Competition Tribunal impose administrative penalties
against ArcelorMittal South Africa, Cape Gate and
Cape Town Iron & Steel Works.
The three steel producers could face penalties totalling
10% of their annual turnover in South Africa and their
Sales of primary carbon steel products to industrial groups (metric tons)
2004 2005 2006 2007 2008 (9 months)
Mining 146 396 164 132 211 121 235 783 197 717
Total manufacturing 2 534 169 2 327 706 2 889 090 3 065 929 2 529 873
Packaging 260 673 256 443 264 036 256 744 190 088
Structural steel 986 215 895 524 1 117 162 1 138 192 904 920
Agricultural 38 555 33 048 44 061 57 091 49 044
Automotive 314 152 290 375 362 006 349 464 257 829
Electrical apparatus/white goods 49 481 47 294 66 199 74 500 60 075
Cables, wire products and gates 647 089 588 843 713 227 711 286 599 473
Fasteners 57 113 50 576 67 205 75 643 62 310
Other 180 913 165 603 255 194 403 009 406 134
Building and construction 967 913 955 102 1 235 743 1 422 824 1 220 352
Unallocated 866 075 791 714 1 007 569 612 532 584 503
Total 4 514 553 4 238 653 5 343 523 5 336 888 4 532 445
Source: South African Iron and Steel Institute (Note that Saisi was unable to provide statistics for the last three months of 2008 because of the price-fixing investigation
that has been initiated against its members.
South Africa’s primary steel imports
per region – 2008
Source: South African Iron and Steel Institute
Africa
1%
E Europe & FSU
1%EU 27
43%
Far East
Islands (Africa)
0%
Middle East
3%
Nafta
2%
Other W Europe
0%
South
America
Unspecified
0%
50%
South Africa’s primary steel exports
per region – 2008
Source: South African Iron and Steel Institute
Africa
38%
E Europe & FSU
0%
FarEast
Islands (Africa)
Middle East
6%
Nafta
3%
Other W Europe
0%
Unspecified
0%
4%
22%
South America
5%
EU27
22%

9
exports from the country in the preceding financial
year.
ResearchconductedbytheCommissionhassuggested
that the steel mills have been charging local customers
at around import parity price levels since 2002, despite
the fact that South Africa is a net exporter of steel.
A fourth steel producer, Scaw South Africa, following
a search-and-seizure operation, applied for corporate
leniency for price fixing and market allocation in relation
to rebar and wire rod.
Environmental issues
Both ArcelorMittal South Africa’s Vereeniging plant and
Highveld Steel & Vanadium’s operations were, in 2007,
found by government inspectors to be noncompliant
with environmental legislation. However, ArcelorMittal
reported, in February 2008, that its board had ap-
proved projects with a price tag of R150-million aimed
at reducing dust emissions. The company said it was
already complying with a government directive to stop
dumping material waste into an unlined dump site and
was now disposing of its waste at Holfontein, an ap-
proved disposal site.
At Highveld Steel & Vanadium South Africa’s
environmental management inspectors, the
Green Scorpions, found “serious environmental
transgressions” at its Vanchem operation. The
inspection found excessive sulphur dioxide and
ammonia emissions, as well as contamination of
groundwater.
ArcelorMittal South Africa has reached an agreement with gold producers Harmony and DRDGold regarding the settlement of
their long-running dispute around the pricing of flat steel products in the South African market.
The agreement between the parties was reached without any admission of liability on the part of
ArcelorMittal South Africa, and the parties have agreed to keep the terms of the settlement confidential.
There will be no further hearings at the Competition Tribunal about the case, following the settlement.
DRDGold and Harmony have said in a joint statement that the settlement agreement reached will permit the goldminers to focus
their energies and resources on their core businesses, and represents a satisfactory outcome tothe matter for them
The complaint was initially lodged with the Competition Commission in 2002, with the gold miners claiming that ArcelorMittal
South Africa had abused its dominant position in the country’s flat steel market by charging excessive prices, to the detriment
of consumers.
The case has been before the Competition Tribunal since 2004, with a finding delivered in 2007, which pinned ArcelorMittal South
Africa with an R691,8-million fine.
However, the steelmaker appealed against the decision, which led to the Competition Appeal Court referring the case back to
the Competition Tribunal.
The Competition Tribunal has also said that it is likely that the case at the Tribunal will be withdrawn, as there are no respondents
left to pursue the case.
ArcelorMittal South Africa excessive pricing case

10
Primary carbon steel producers in South Africa
ArcelorMittal South Africa
ArcelorMittal South Africa is the biggest producer
of steel on the African continent, with a production
capacity of about eight-million tons of liquid steel a
year. About 65% of the company’s stock is held by
foreign investors, including ArcelorMittal group, with
a 52% interest. The largest domestic shareholders are
the Public Investment Corporation and the Industrial
Development Corporation, with 8,95% and 8,79%
respectively at the end of 2008.
ArcelorMittal South Africa has four major steel op-
erations. The Vanderbijlpark and Saldanha facilities
produce flat steel products, of which the company is
the largest supplier in Africa. The other two operations,
at Newcastle and Vereeniging, produce long steel pro-
ducts. The company has also recently acquired two
mills in Mozambique.
KIO supplies ArcelorMittal South Africa with about
90% of its iron-ore requirements on a cost-plus basis,
in terms of a 25-year preferential supply agreement.
This agreement followed the 2001 unbundling of Iscor’s
iron-ore mines to form JSE-listed Kumba Resources,
now KIO. The balance of AreclorMittal South Africa’s
iron-ore requirements are acquired through commercial
arrangements. ArcelorMittal South Africa also has the
right to participate in Kumba’s expansion projects, as
long as it can demonstrate that it can use the ore in its
South African mills.
ArcelorMittal South Africa is currently locked in a
confidential arbitration process with KIO regarding its
participation in the miner’s Sishen South project.
The arbitration process to participate in KIO’s Sishen
South mine is expected to be concluded by late this
year or early in 2010. The two companies agreed to
the confidential arbitration process to resolve “key
differences of interpretation” regarding a 2007 Sishen
supply agreement. The hearings into the matter started
in June 2009.
ArcelorMittal South Africa is hoping to source about
four-million tons a year of the nine-million tons a year
project. If the company is successful in its arbitration,
ArcelorMittal South Africa will have to fund a percent-
age of the mine development capital expenditure, equal
to its four-million tons a year share of the project.
ArcelorMittal’s capital expenditure
programme
ArcelorMittal South Africa has cut back on its capital
expenditure (capex) plans in the wake of the impact
that the economic crisis has had on demand for steel
products, both globally and in South Africa. The com-
pany had planned to boost its output of liquid steel
from its current nameplate capacity of eight-million
tons to ten-million tons by 2013.
These plans have now been postponed and will only be
revisited when the market for steel returns to a sustain-
able growth situation. Even then, each project will be
re-evaluated on whether it is still needed in a post-crisis
market environment. The company has not given any
timelines for a resumption of the growth plan given the
continued volatility in global and domestic steel markets.
The biggest project that will have to be re-evaluated is
the N6 blast furnace at Newcastle, the cost of which has
been estimated at between R2,5-billion and R3-billion.
Other projects that have been postponed include galva-
nising and colour lines at Newcastle and Vanderbijlpark.
The global economic downturn has had implications for ArcelorMittal’s proposed capex project.
The cost of the company’s capex programme in 2008 was stated at R11,8-billion. In addition to the growth orientated projects
the company had also planned to generate its own electricity in gas-powered cogeneration power stations at a cost of about
R4-billion.
However, owing to the global economic crisis ArcelorMittal South Africa will now limit its capital investment strategy to projects
that improve the safety of the operation or that are required in terms of its environmental commitments. In 2009, its total capex
budget has been set at R1-billion, which also includes maintenance expenditure. In 2008 and 2007 the company had spent just
over R1,8 billion each year on capital projects.
ArcelorMittal’s capex

11
However, most of the projects that had been started as
part of the capex programme were completed in 2008
or are nearing completion. They include the construc-
tion of two new direct reduction iron, or DRI, kilns at
Vanderbijlpark, which were completed in June 2009.
They are responsible for the bulk of the R800-million
spent at Vanderbijlpark over the past year and a half.
The rest was spent on a sinter off-gas treatment plant.
On the environmental front, the R110-million installa-
tion of dust extraction systems at Vereeniging Works’
steelmaking plant is on track for completion in 2010,
and the Coke Gas and Water Cleaning project at
Vanderbijlpark, which has experienced some commis-
sioning delays, will be operational before the end of
2009 and reduce sulphur-dioxide emissions by 46% at
the operation.
Black economic empowerment
In June 2009, ArcelorMittal South Africa launched a
pilot R30-million three-year preferential procurement
initiative and stated that this should not be read as
a signal that it was concentrating on the nonowner-
ship elements of South Africa’s empowerment codes
and that it was possible that a corporate-level black
economic-empowerment (BEE) transaction could still
be pursued.
Any future BEE deal, however, will be as broad based
as possible and could include staff, surrounding
communities and a possible strategic empowerment
partner.
The R30-million scheme will be used to procure en-
gineering and manufacturing goods and services from
small and medium-sized companies, with particular
focus on black-owned companies in the communities
in which the company operates. It will be launched at
the group’s Vanderbijlpark works and then rolled out to
its other business units in Saldanha Bay, Vereeniging
and Newcastle.
Three suppliers have already been selected for the
first initiative, including Commit Engineering, a black-
women-owned company specialising in medium to
heavy general engineering and fabrication, as well
as the installation and maintenance of air-filtration
systems and conveyors; Tunnel Engineering, a black-
owned general engineering firm with expertise in turn-
ing, milling, drilling, hydraulics and welding; and Hencill
Engineering, a supplier of services and products related
to steel fabrication, steel manufacturing and repairs.
The company says it is committed to expanding the
procurement programme beyond engineering services,
and to territories outside Gauteng.
Associated skills training and other support measures
will also be deployed by the steelmaker as it expands
the scheme, with the aim of increasing the number of
black-empowered suppliers, promoting supplier com-
petitiveness and removing supply constraints.
In the meantime, the group will continue to pursue
a range of initiatives to improve its overall rating
under government’s broad-based black economic-
empowerment codes of good practice, where pre-
ferential procurement is a key component. The other
elements are management control, employment equity,
skills development, enterprise development and socio-
economic development.
Steel prices
ArcelorMittal South Africa has, since the middle of
2009, introduced steady increases in steel prices, after
steel prices fell by more than 60% at the onset of the
global economic crisis in September 2008.
In August 2009, the steelmaker announced that the
prices of its flat steel products would increase by be-
tween 2% and 4% in October 2009, while the prices of
its long products would remain unchanged.
The steelmaker increased prices by between 3% and
5% in July and August 2009, while the prices of only
some of its flat steel products increased by between
R250/t and R750/t in September 2009.
Operations
The company has four major steel operations in South
Africa, namely Vanderbijlpark, Saldanha, Newcastle
and Vereeniging. The Vanderbijlprk and Saldanha
flat steel products plants together are capable of
producing 5,6-million tons of liquid steel a year, mak-
ing them the largest suppliers of this commodity in
Africa. The company’s Newcastle and Vereeniging
operations service some 50% of the local market for
long steel products, while also exporting products inter-
nationally. The two mills have capacity for total yearly
sales of 2,2-million tons, 20% of which is exported. Of
the remainder, about 1,6-million tons comprises rolled
profile products, 90 000 t seamless tube and 20 000 t
forged products.
ArcelorMittal also owns a coke-and-chemicals plant in
South Africa and two steel mills in Mozambique.

12
The company’s steel products are marketed interna-
tionally through Macsteel International, a joint venture
with the Macsteel group, in which ArcelorMittal South
Africa holds a 50% interest.
Offices in major centres in Europe, North America,
South America, Asia, the Middle East and Africa pro-
vide the company with a worldwide infrastructure for
the marketing and distribution of its products.
Vanderbjilpark
The Vanderbijlpark operation, in Gauteng province,
is one of the world’s largest inland steel mills and the
largest supplier of flat steel products in sub-Saharan
Africa. The ISO 9002- and ISO 14001-accredited plant
employs some 4 500 people.
The plant’s steel products are manufactured in an inte-
grated process. Raw materials such as iron-ore, coke
and dolomite are charged to blast furnaces, where they
are converted into liquid iron. The liquid iron is refined
in basic oxygen furnaces and electric arc furnaces to
produce liquid steel. The liquid steel is cast into slabs,
which are hot-rolled into heavy plate in a plate mill, or
into coils in a strip mill. The coils are either sold as hot-
rolled sheets in coil or processed further into cold-rolled
and coated products, such as hot-dip galvanised,
electrogalvanised and prepainted sheet and tinplate.
The Vanderbijlpark plant boasts two blast furnaces,
three electric arc furnaces and three basic oxygen
furnaces.
Saldanha
The Saldanha plant, a largely export-focused plant, is
in close proximity to the deep-sea port of Saldanha
and employs 568 staff. The plant produced its first
hot-rolled coil in late 1998 and is currently producing
at its nameplate capacity of 1,2-million tons a year. The
ISO 9002- and ISO 14001-accredited plant is the only
steel mill in the world to have successfully combined
the Corex/Midrex process into a continuous chain–
replacing the need for coke ovens and blast furnaces,
and making the plant a world leader in emission control
and environmental management.
Facilities and technologies at the Saldanha plant were
specifically designed to produce ‘clean’ steel, with vir-
tually no impurities like tin and copper. The continuous
production chain is exceptionally short, taking only 16
hours from the time iron-ore enters the Corex or Midrex
units to the rolled product.
Vereeniging
The Vereeniging operation is the country’s major sup-
plier of speciality steel products, seamless tube and
forge products. The ISO 14001-certified plant employs
908 staff and produces 400 000 t/y of final product, of
which some 32% is exported. It supplies input mate-
rial for the manufacture of safety-critical components
for the automotive industry, seamless tube for the
petrochemicals, oil and gas industries and wire rod for
fencing and hoisting rope used in deep-shaft mining.
The manufacturing facility consists of a rotary hearth
furnace, a cone-type rotary piercer and a multistrand
pipe mill. In addition, it has a 22-strand stretch reducer
followed by two straighteners, cutting and bevelling
facilities, as well as an EMI and ultrasonic testing unit.
Forge products include an extensive range in sizes from
90 mm to 1 400 mm. The Vereeniging plant produces
rounds, squares, flats, thick-wall tubes, step-forgings,
rings, disks and blocks. Products are supplied in the
‘as-forged’ condition or heat-treated to specification.
Special profiles, which are produced at a scaled-down
Pretoria operation, include a range of window sections
used for making residential and industrial windows.
Other products include Y and I standard fencing posts,
T-section droppers and palisade fencing sections.
The Vereeniging operation uses an electric arc furnace
in its manufacturing of profile products from scrap and
directly reduced iron.
Newcastle
The Newcastle plant, located in the northern part of
South Africa’s KwaZulu-Natal province, is the coun-
try’s foremost supplier of profile products. It employs
1 850 people and produces 1,6-million tons of final
product, of which a fluctuating percentage is exported
to international markets. The profile products pro-
duced include low- and medium-carbon commercial
grades, low-carbon rimming steel substitutes, sulphur
containing free-cutting steels, microalloyed steels,
high-carbon wire-rod steels and low-, medium- and
high-alloy steels.
Sizeable capital expenditure has been invested for the
extensive refurbishment of the plant and to introduce

13
sophisticated information systems. This has optimised
operations and sustained global competitiveness at all
levels.
This ISO 9002-, 14001- and 18001-listed plant is an in-
tegrated operation that produces rolled steel from iron-
ore through a blast furnace route. The plant has three
coke oven batteries, one sinter plant, one blast furnace,
two basic oxygen furnaces and four rolling mills.
ArcelorMittal Coke & Chemicals
ArcelorMittal Coke & Chemicals’ core business is the
production of commercial coke for the ferroalloys
industry from coke batteries located in Pretoria,
Newcastle and Vanderbijlpark. The business also ben-
eficiates metallurgical and steel by-products, which,
besides others, include coal tar. All ArcelorMittal Coke
& Chemicals plants are ISO 9001, ISO 14001 and
OHSAS 18001 listed.
Mozambique steel mill
The depressed economic climate led to the closure,
in September 2009, of the ArcelorMittal South Africa
mill in Maputo. The steelmaker also said high raw
material costs and electricity tariffs made the operation
unviable. The company had opened the refurbished
rod mill in June 2008, as part of its strategy to grow a
sub-Saharan Africa footprint and to ensure a presence
in the fast expanding Mozambican economy. During
the 2008 financial year, the mill produced only 5 150 t at
a significant loss to the company.
The mill is one of the two mills acquired by ArcelorMittal
South Africa from the Mozambican government for
$11,4-million in 2006.
ArcelorMittal South Africa’s Mozambican customers
will now be supplied through the company’s South
African operations, particularly the Newcastle plant.
Shareholding structure
About 65% of ArcelorMittal South Africa’s stock is held
by foreign investors, including ArcelorMittal’s 52,02%
interest. The biggest domestic shareholders are the Public
Investment Corporation, with 8,95%, and the Industrial
Development Corporation, with 8,79%.
Group revenue
R39,9-billion (December 2008).
Group profit
Leadership
Nonkululeko Nyembezi-Heita, CEO BSc (Hons) (Elec Eng),
MSc (Elec Eng), MBA.
Luc Bonte, president, MSc (Elec Eng), PhD (Applied
Sciences), MBA.
Khotso Mokhele, nonexecutive chairperson BSc (Agric),
MS (Food Science), PhD (Microbiology).
Nonexecutive Directors
Davinder Chugh, BA LLB, BSc (Hons), MBA (India).
Christophe Cornier, MSc (Ecole Polytechnique), MSc
(Ecole des Mines).
Eric Diack, BAcc, CA (SA), AMP (Harvard).
Lumkile Mondi, BCom (Hons, Economics), MA (Economics)
(Eastern Illinois University).
Chris Murray, BCom, CA, MBL.
Johnson Njeke, BCom, BCompt (Hons), CA (SA),
Higher Dip in Tax Law.
Sudhir Maheswari, BCom (Hons), CA CS.
Noluthando Orleyn, BJuris, BProc, LLB, PhD Hons.
Arnaud Poupart-Lafarge, BEng, MSc (Economics).
Executive Directors
Kobus Verster, executive director: finance
BCom, Bcom (Hons), MBL, EMP (Darden).
Contact details
Postal address
PO Box 2
Vanderbijlpark
1900
South Africa
Telephone:
+27 16 889 9111
Fax:
+27 16 889 2472
Website:
arcelormittalsa.co.za
ArcelorMittal South Africa

14
Highveld Steel & Vanadium
Highveld Steel & Vanadium, which is now almost
85%-owned by Russia’s Evraz group, is South Africa’s
second-largest producer of carbon steel. The European
competition body approved the merger between
Highveld Steel & Vanadium and Evraz in 2007, on
condition that Highveld dispose of part of its stake in
the Mapochs iron-ore and vanadium mine as well as its
Vanchem operation, to avoid competition concerns at
all levels of the vanadium value chain.
South Africa’s Competition Tribunal has since approved
the sale of Highveld’s Vanchem operations to Swiss
firm Duferco Investment Partners’ Vanchem Vanadium
Products. Vanchem Vanadium Products has also
acquired Highveld’s 50% stake in South Africa Japan
Vanadium and 350 ordinary shares in the Mapochs
mine, which produces titaniferous magnetic ore for
Highveld and ore fines for Vanchem.
Operations
Iron and steelworks
The steelworks, near Witbank, consists of an iron-
making division and a steel plant. Steel is converted into
a variety of hot-rolled steel products, including plate,
coil, structural sections, slabs and billets. Vanadium-
bearing slag is coproduced with iron from magnetite
iron-ore. Highveld Steel & Vanadium’s products are sold
locally and abroad, and the major export markets are
Austria, which accounted for 42% of export revenue
in 2008, followed by the US (24%), the UK (12%), the
Netherlands (5%), the United Arab Emirates (3%), and
Belgium, Brazil and Canada, each of which contributed
2% to export revenue.
During 2008, Highveld Steel & Vanadium produced
299 522 t of plate (compared with 197 630 t in 2007),
153 237 t of coil (2007: 208 825 t), 207 172 t of sec-
tions (2007: 330 076 t) and 65 725 t of vanadium slag
(2007: 65 673 t).
Mapochs mine
The Mapochs mine, in Mpumalanga, is an opencast
operation that produces titaniferous magnetic ore and
ore fines. Hitherto an independently managed division
of Highveld, the mine is to be transferred into ‘Mapochs
Newco’ following a R540-million empowerment deal in
terms of which Umnotho we Sizwe is to acquire a 26%
interest in the mine.
The deal is in line with South Africa’s Mineral and
Petroleum Resources Development Act, which stipu-
lates that previously disadvantaged South Africans
participate in the ownership of mining operations seek-
ing mineral and mining rights.
The transaction is still subject to certain conditions, and
will involve the sale of a 23% stake in Mapochs Newco
to Lakhka 81, the name of which is to be changed to
the Umnotho Iron & Vanadium special-purpose vehicle,
with the remaining 3% going to the Mapochs Mine
Community Trust.
The transaction will come into effect on July 1, 2010, or
on the last business day of the calendar month in which
the conditions are fulfilled.
Highveld Steel & Vanadium announced in March 2009 that it was revising its production and capital expenditure plans for the
year, owing to slowing global steel consumption. However, the extent of the production and capex cuts was not stated.
In its 2007 annual report, Highveld stated that it intended to raise its capex from about R750-million, with this expenditure directed
towards increasing steel production to the mill’s one-million-ton-a-year nameplate. The capex programme was to also entail envi-
ronmental projects to ensure full compliance with air and water quality legislation.
Highveld Steel & Vanadium capital projects

15
Shareholding
Evraz (85,11%) (majority shareholder).
Group revenue
Group profit
2,5-billion (December 2008).
Leadership
Walter Balandino (CEO).
T Shongwe, chairperson BA (Econ), MBA, ACIS, FCIBM,
LDP.
Independent Directors
CB Brayshaw, CA (SA), FCA (England and Wales).
Nonexecutive Directors
GC Baizini, (Italian), MA (Hons) (Physics),
Summer MBA, Diploma in Industrial Engineering.
JW Campbell, BSc (Mathematical Physics),
MA (Engineering Management).
AV Frolov, (Russian), Hons Nuclear Physics,
PhD Physics and Mathematics.
GA Mannina (Swiss), Major in Business Administration.
PS Tatyanin, (Russian) Master’s in Economics.
Executive Directors
BE de Beer, Chief financial officer, BCompt, financial director.
CI Lewis, company secretary, BLC, BA, BProc, LLB, LLM
(Law of Contract), LLM (Corporate Law), Certificate in
Environmental Law.
Contact details
Postal address:
PO Box 111
Witbank
1035
South Africa
Telephone:
+27 13 690 9033/32
Website:
www.highveldsteel.co.za
Highveld Steel & Vanadium

16
Scaw Metals
A wholly owned Anglo American subsidiary, Scaw
Metals group is a manufacturer of a wide range of steel
products, with operations in South Africa, Namibia,
Zambia, Zimbabwe, Canada, Australia and North
America. These operations are housed in two compa-
nies, Scaw South Africa and Scaw International.
Scaw Metals also owns Ozz Industries, in South Africa;
Moly-Cop, which produces forged sheet heat-treated
grinding media in several locations across the globe;
Canada’s AltaSteel, a scrap-based mini mill operation
with melting and continuous casting facilities, a bar
rolling mill and a grinding rod heat-treating facility;
Consolidated Wire Industries, a 50:50 joint venture with
ArcelorMittal that produces mild steel wire in both black
and galvanised finish; and a 50% stake in Chile-based
cast steel grinding media manufacturer Proacer.
Operations
Rolled products
Scaw’s operation in Germiston, east of Johannesburg,
South Africa, boasts two rolling mills: one producing
low- and high-carbon wire rod and merchant bar, and
the other light and medium sections.
The combination bar mill has a 100-t/h walking beam
reheat furnace, 21 stands in line and two outlets, a
cooling bar for straight products of up to 76 mm in
diameter and a ten-stand high-speed wire rod mill with
controlled cooling facilities for wire rod of up to 18-mm
diameter.
The section mill has a three-high tilting table break-
down mill and one two-high sizing mill that feeds either
a medium section train that produces channels and
equal and unequal angles or a ten-stand continuous
small section and bar train for small angles and flats.
Steel is produced in an 85-t ultrahigh power-eccentric
bottom tapping type arc furnace and ladle furnace
combination that feeds a three-stand, high-speed
continuous billet-casting machine. The caster is
equipped with convex water-cooled moulds that allow
for high casting speeds and electromagnetic stirring
systems. The melt shop uses a high proportion of
directly reduced iron (DRI) in its furnace charge. The
DRI is produced from three coal-based rotary kilns at
the Germiston operation.
Grinding media
Scaw has a specialised foundry facility at the Germiston
operation that produces heat-treated high-carbon,
high-chromium iron grinding media for use in platinum,
copper, coal, gold and regrind applications, as well as
a forged steel grinding media plant. The company’s
grinding media operations in Chile, Peru, Mexico and
Canada produce a range of forged steel, heat-treated
grinding media and have a total installed capacity of
more than 700 000 t/y.
Cast products
The foundry at the Germiston operation, one of the big-
gest foundries in the southern hemisphere, produces
castings with a finished weight of up to 30 t. It is a lead-
ing supplier of single-piece, thin-walled locomotive and
passenger frames, freight car components and high-
integrity cast steel railway wheels. The facility holds
the American Association of Railroads’ approval for the
manufacture of freight car side frames, bolsters and
cast steel wheels. Other products include large gear
segments, high-carbon, high-chromium, abrasion-
resisting coal grinding elements for coal-fired power
stations, high-chromium iron mill liners and impact
crushing parts, stainless-steel coiler drums, and slag
ladles for the metal processing industry.
Arc furnace melting units and a 25-t-capacity ladle
vacuum degassing unit serve the foundry where steels
can be produced with lower sulphur, nitrogen, oxygen
and hydrogen contents, particularly necessary for the
manufacture of high-strength, low-alloy steels.
Scaw’s other South African foundry, in Benoni, manu-
factures a wide range of earthmoving components
under licence from Esco Corporation of the US and
general engineering products in plain and low-alloy
steels of up to 8 t finished mass. Other products include
manganese wear components for gyratory crushers.
Wire rod products
Scaw’s wire rod plants are located in South Africa,
Zimbabwe, Zambia and Australia. The main Steel
Wire Rope operation, in Johannesburg, is an inte-
grated wire mill and ropery plant that manufactures
specialised ropes. Smaller factories are in Zimbabwe
and Zambia.
In October 2009, Anglo American announced that it will
sell noncore assets, including Scaw Metals, to focus on
its core mining activities.

17
The Wire and Strand operation in Germiston has three
major product lines: prestressed concrete wire and
strand, mining commodity rope and high-carbon wire.
Synthetic and natural fibre ropes are manufactured at
the Fibre Products factory in Durban, South Africa, for
use as cores in steel wire rope and for mining, marine
and agricultural applications.
The chain operations in South Africa and Australia pro-
duce a range of carbon and alloy steel chains and fittings
used extensively in mining, forestry, agriculture, fishing,
offshore oil exploration and other industrial applications.
The Jupiter Steel Wire Rope operation is the world’s
largest integrated wire mill and ropery plant, manufac-
turing a wide range of the Haggie brand of specialised
ropes.
Scrap processing
Steel scrap is delivered to Scaw South Africa’s Union
Junction operation, where it is cleaned, shredded and
processed before being passed on for manufacture
and conversion into a wide range of value-added steel
products.
Scaw South Africa’s shareholders include a BEE
consortium that holds 21% and an employee share
ownership trust that holds 5%. Anglo American holds the
balance of the shares.
Leadership
Norman Mbazima (CEO).
Christopher Davis, chief financial officer.
Contact details
Postal Address:
P O Box 61721
Marshalltown
2107
South Africa
Telephone:
+27 11 621 1555
Fax:
+27 11 621 1590
Website: www.scaw.co.za
Scaw Metals

18
Cape Gate
Cape Gate is a manufacturer and distributor of steel,
wire and wire products that serves the mining, agricul-
ture, industrial, civil engineering and construction and
commercial sectors, both in South Africa and abroad.
Since its inception in 1962, the company has grown
into a producer of wire and steel products with its own
source of raw materials.
Operations
Davsteel
Davsteel, which is based in Vanderbijlpark, operates
two steel shredding units, and the finished products
are wire rod, reinforcing bar, mild steel rounds, bars for
mine roof bolts, angles, flats and squares.
Sharon Wire Mill
Sharon Wire Mill processes wire rod into hard drawn
wire, annealed wire, hexagonal wire netting, diamond
mesh, gabions, barbed wire, spooled baling wire,
field fence, straightened and cut galvanised and
uncoated wire, prepackaged wire products and mini
coils.
Orenwire
Orenwire manufactures medium- and high-carbon wire
and a range of steel wire ropes.
Leadership
Nathan Friedman, chairman.
Erwin Baldé, co-chairperson, group financial director.
Pikkie Coetzee, CEO.
Nonexecutive directors
Boudewyn Eras.
Oren Kaplan.
Robert Kaplan.
Executive directors
Martin Friedman, steel.
Cedric Harris, operations, steel.
Geoff Homes, technical.
Mendel Kaplan.
Dawie Oberholzer, operations, steel.
Coen Otto, wire.
Contact details
Postal address
PO Box 54
Vanderbijlpark
1900
South Africa
Telephone:
+27 16 980 2307
Fax:
+27 16 980 2467
Website:
capegate.co.za
Cape Gate

19
Cape Town Iron & Steel Works
Cape Town Iron & Steel Works (Cisco), a wholly
owned subsidiary of JSE-listed engineering and con-
struction group Murray & Roberts, is a scrap-based
mini mill producing reinforcing steel in billet and bar
forms.
The company has been in existence for about 40 years,
operating from its original site in Cape Town.
It manufactures and supplies reinforcing billets and bar
to the Southern African region and to selected interna-
tional markets.
Operations
Cisco’s melt shop has a rated capacity of 300 000 t/y
of billets. Its rolling mill provides production flexibility
and consistent product quality, meeting recognised
international specifications and standards.
Leadership
Jimmy Windt (GM).
Contact details
Postal address
PO Box 121
Kuilsrivier
7579
South Africa
Telephone:
+27 21 903 2141
Fax:
+27 21 903 9495
Website:
www.cisco.co.za
Cape Town Iron & Steel Works

20
Stainless steel producers in South Africa
Columbus Stainless
Stainless steel producer Columbus Stainless, which
is based in South Africa’s Mpumalanga province,
is 76%-owned by Spain’s Acerinox, with the re-
mainder held by Samancor (a joint venture between
Anglo American and BHP Billiton) and the Industrial
Development Corporation of South Africa.
Operations
Columbus Stainless’s fully integrated, single-site
plant boasts a steel plant, hot-rolling facilities, cold-
processing facilities, a plate section and finishing lines.
The plant has an electric arc furnace with a liquid metal
capacity of 850 000 t/y and hot-rolling and cold-rolling
millcapacitiesof70000t/mand36000t/mrespectively.
Columbus Stainless is expanding its cold-rolling mill
capacity by 25%, to 45 000 t/m, to enable it to process
more of its current excess hot-rolled coils by installing a
new mill designed for thin gauge, bright anneal quality
stainless steel, cold rolled coil and installing a degreasing
section on the final annealing and pickling line for
improved surface quality of the cold rolled coils.
Columbus Steel capital projects
Leadership
David Martin (CEO).
Acerinox 76%.
Samancor 12%.
Industrial Development Corporation 12%.
Contact details
Postal address
PO Box 133
Middelburg
1050
South Africa
Telephone:
+27 13 247-9111
Fax:
+27 13 246-1681
Website:
www.columbus.co.za
Columbus Stainless

21
Main sources
ArcelorMittal press release: ArcelorMittal SA confirms closure of its Maputo rolling mill on 4/9/2009 (September 11,
2009).
Associated Press. Putin promises help for Russian steel industry (July 24, 2009).
Engineering News. ArcelorMittal SA to increase flat steel prices in October (August 31, 2009).
Engineering News. ArcelorMittal SA settles excessive pricing case with gold-miners (September 14, 2009).
Engineering News. Corporate-level BEE still under consideration at steel giant (June 12, 2009).
Engineering News. Court sends excessive pricing ruling back to Competition Tribunal (July 10, 2009).
Engineering News. Environmental standards improvement projects under way at Vereeniging plant (July 11, 2008).
Engineering News. Green Scorpions found ‘noncompliances’ at ArcelorMittal’s Vereeniging plant (July 19, 2007).
Engineering News. Harmony, DRDGold settle steel case with ArcelorMittal SA (September 14, 2009).
Engineering News. Highveld Duferco deal clears final competition hurdle (August 22, 2008).
Engineering News. Highveld Steel guilty of ‘serious’ environmental noncompliance – Deat (October 4, 2007).
Engineering News. Highveld unveils R540m empowerment deal for Mapochs mine (9 April, 2009).
Engineering News. Steel giant to spend R150m on cutting Vereeniging’s dust emissions (February 29, 2008).
Engineering News. Highveld Steel guilty of serious noncompliance – Deat (October 4, 2007).
Engineering News. Steel producer revises production and capex plans as slowdown bites (March 23, 2009).
Engineering News. Steel producers may face fine for price fixing – Competition Commission (September 1, 2009).
Highveld Steel & Vanadium annual report, 2007
Highveld Steel & vanadium annual report, 2008
International Stainless Steel Forum (ISSF). Press release: World economic crisis drives 2008 world stainless production
lower (March 12, 2009).
Mining Weekly. Kumba set to spend R4bn a year in ongoing iron-ore capex (July 31, 2009).
Mining Weekly. Sishen South on course for first production in 2012 – CEO (July 31, 2009).
Research Channel Africa. Columbus Stainless cold-rolling mill capacity expansion project, South Africa (July 4, 2008).
Reuters. Global iron-ore mine expansion/output plans (January 12, 2009).
Steelnews. Quarter 4 of 2008
United States Metals Report Q3 2009
World Steel in Figures 2009
www.arcelormittalsa.co.za
www.capegate.co.za
www.cisco.co.za
www.columbus.co.za
economywatch.com/business-and-economy/steel-industry.html
www.highveldsteel.co.za
www.issb.co.uk
www.saisi.co.za
www.scaw.co.za
www.worldstainless.org
worldsteel.org

South Africa’s Steel Industry 2009
The material contained in this report was compiled by the Research
Unit of Creamer Media (Pty) Ltd, based in Johannesburg, South
Africa. The information contained in this report has been compiled
from sources believed to be reliable, but no warranty is made as to
the accuracy of such information. This document is designed to be
used as a source of information for subscribers to Creamer Media’s
Research Channel Online and is not to be reproduced or published for
any other purpose.
The reports draw on information published in Engineering News and
Mining Weekly as well as from a range of other sources, and should
provide an invaluable, and easy-to-read snapshot of key industrial
sectors.
© Copyright Creamer Media (Pty) Ltd

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