AMSA’s second blast furnace is off, again.

You may recall that the current critical shortage of steel in South Africa is as a direct result of AMSA’s deliberate decision not to start up the second blast furnace at Vanderbijlpark, following the first (hard) lockdown last year. 

AMSA has two blast furnaces at its Vanderbijlpark works and when they operate only one of them, by necessary implication, they only operate at 50% capacity, which is not sufficient to supply the South African market.

Although AMSA started up the second blast furnace in January 2021 (six months too late), it still was not capable of addressing the backlogs. The unavailability of steel sent prices skyrocketing for the now desperate steel manufacturing industry. That same ‘second’ blast furnace very recently experienced technical problems and has been out of operation for more than a week, which further aggravates the already critical shortages. 

The Steel Industry could have started importing the shortfall from last year, but the protectionist duties prevent them from doing so. Since it forces desperate manufacturers to pay exorbitant prices for raw material, the shortages suit AMSA perfectly; currently resulting in AMSA profiting to the tune of billions of Rands. 

If the penny still has not dropped for Government – that it is time to suspend all duties with immediate effect – serious doubts will be cast on the possibly sly motive for such inaction by Government.

by Gerhard Papenfus

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