Istanbul, Turkey — MININGREVIEW.COM — 06 October 2009 – ArcelorMittal “’ the world’s biggest steelmaker “’ has announced that it has dropped plans to build a 400 000-tonne capacity plant in Mozambique, following its review of African expansion in the wake of the global slump.
“The project has been shelved, and really there is no specific time frame in which it will be rekindled,” said Nonkululeko Nyembezi-Heita, chief executive of ArcelorMittal South Africa “’ the biggest steelmaker in Africa, “’ in an interview here. “It will all depend on how the economies of the region develop.”
She pointed out that ArcelorMittal South Africa had already closed a smaller plant in Mozambique with an annual capacity of 35000 tonnes, because of concern about slower economic growth due to the global slump.
“It’s not clear whether African countries such as Mozambique “’ which was posting annual growth rates of about 8% before the crisis “’ can again achieve that kind of pace, since the international aid that was financing their expansion has dried up,” Nyembezi-Heita said.
Bloomberg News reports that South Africa’s manufacturing industry is showing signs of recovery after its first recession in 17 years. The country’s purchasing managers’ index, which measures the orders that companies expect to place, last month posted its biggest gain since May 2008.
“ArcelorMittal South Africa’s plants are currently working at about 75% of capacity,” Nyembezi-Heita said. “That’s up from about 60% at the end of June. It’s not clear when they will return to maximum output,” she added.
Nyembezi-Heita said the company expected to learn “very shortly” whether its bid for Zimbabwe’s state steelmaker Zisco had been successful. There were at least five bidders for the company, according to the Harare-based Herald newspaper.
Expectations of a steady rise in steel prices, which were widespread in June and July, have faded and Nyembezi-Heita said “it doesn’t appear at this point that global steel prices have a fire underneath them.”