Johannesburg, South Africa — MININGREVIEW.COM — 28 September 2009 – South Africa’s Industrial Development Corporation (IDC) is in the process of completing a study on the viability of constructing a new steel mill in the country in about nine months’ time.
Quoting Business Day, Reuters reports that the mill, which was expected to cost between US$2.7 (R21 billion) and US$2.9 billion (R23 billion) “’ would help increase competition in the domestic steel market, boosted by a buoyant construction sector ahead of the 2010 soccer world cup. It could also supply the rest of Africa.
The agency cited IDC head of mining Abel Malinga as saying the study would seek to establish whether there were sufficient reserves in South Africa to supply a steel plant with an output of 3 to 4 million tpa over 30 years. The preferred site for the plant would be along South Africa’s coast, as this would allow the mill to sell excess capacity to the international market.
Reuters reports that global steel production has tumbled as demand in key steel consuming sectors such as construction and automotive manufacturing has shrunk, forcing steelmakers to sharply reduce capacity usage and causing inventories to balloon.