ArcelorMittal South Africa welcomes designation of local steel for rail sector

ArcelorMittal South Africa welcomes the decision by the Department of Trade and Industry (dti) to regulate the designation of locally produced services and goods or locally manufactured goods with a stipulated minimum threshold for local production and content in the Rail Permanent Way sector.

“This is great news for both primary steel producers and the downstream steel industry as it will drive demand for locally produced steel content and locally manufactured steel products in state-funded rail projects, a key focus area in Government’s infrastructure development plans,” says Wim de Klerk, ArcelorMittal South Africa’s Chief Executive Office who stepped down at the end of January 2018.

“This is another definite and positive step forward in ensuring the sustainability of the South African steel industry. It is also a further demonstration of the Government’s commitment to protecting local manufacturing capacity. It is only through a collaborative effort between both public and private sector, and a combination of initiatives at many levels that we will stem the flow of cheap imports into the local steel market and reignite local manufacturing demand.”

According to the recently released Government circular, a ‘permanent way’ is the structure, consisting of the rails, fasteners, railroad ties (sleepers) and ballast or slab track, plus the underlying subgrade, which enables the trains to move. All primary steel products, including plates, coils, seamless tubes, round bars, angles, sections and wire related products, form part of this designation.

Castings and forgings
Furthermore, all castings and forgings related to the assembly and manufacture of the Rail Permanent Way sector are included in this designation and must be manufactured and sourced locally.

Stipulated minimum local content for rail permanent way sector is 100% for rails and rail joints, ballasts, ballastless, turnouts/switches and crossings, railway sleepers, rail fastening and accessories and assembly and testing of fully built units. For railway maintenance of way plant and equipment it is 70%.

In the past year, Government has taken several positive steps to support the local steel industry, including the implementation of 10% import duties on heavy sections, designation of locally produced steel products in the construction sector, and the implementation of safeguards on hot rolled coil and plate.