adminCAPE TOWN – South Africa will put pressure on steel producer ArcelorMittal SA and petrochemicals firm Sasol to reduce prices and help cut input costs in the steel, platinum and polymer industries by up to 15 percent, a government minister said.
The government in Africa’s second largest economy is pushing to revitalise industrial capacity by encouraging companies to add value to minerals; a process referred to as “beneficiation” locally; before exporting them.
“We’ve got to ensure that the mineral inputs are available at a competitive price, a lower price in South Africa than it is available outside of this country,” Trade and Industry Minister Rob Davies said in parliament this week.
“If ArcelorMittal were able to reduce current prices by 10 percent then I think that would amount to a very significant injection into industries using steel products,” he said.
A similar 10-15 percent discount for polymers at Sasol would also benefit downstream manufacturers, he added.
Competition authorities fined the petrochemicals group 543 million rand ($51 million) in June for excessively pricing its propylene and polypropylene products.
Both are key ingredients in the making of plastic buckets and motor car parts.
Sasol is appealing the fine.
Meanwhile, Swiss-based miner and commodities trader Glencore still wants to sell its 25 percent stake in platinum producer Lonmin [JSE:LON], but at “the right time,” chief executive Ivan Glasenberg said yesterday.
There has been some market speculation in recent weeks that Glencore was considering raising its stake in Lonmin, given the fall in the platinum miner’s share price this year.
Lonmin’s operations were paralysed for months by South Africa’s longest and costliest mining strike which ended in June. Its shares have fallen by about a quarter this year.
The company is trying to ramp up production after losing some 400 000 ounces of platinum output because of the strike – worth almost $600m at current prices.
Glencore, a major producer and trader of metals such as copper and zinc, has said it is not too familiar with the platinum business and would prefer to sell its Lonmin stake.
Glasenberg also told a media briefing in Johannesburg that the company’s talks with Brazil’s Vale over combining their nickel assets in Canada were “struggling”, but he did not believe they had broken down.
Reuters reported on Tuesday that the talks over linking nickel mining and processing facilities in the Sudbury basin in Canada broke down partly due to disagreement over how to share the costs and savings, and to a recovery in the nickel price.- Fin24.
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