The Industrial Development Corporation (IDC) has announced it will construct a steel mill in South Africa worth US $5bn to help support infrastructure projects and urbanization in the African continent.
Steel mill in South Africa construction project is a joint venture between IDC and Hebei Iron and Steen Group, a Chinese firm will see to it that the products made from the steel mill are specifically for the local market and will be sold at a competitive price.
According to the Head of mining and metals at IDC, Abel Malinga, the new milling company would produce as much as 5 million metric tons of steel every year.
This production will be way more than what the 6.6-million tons of crude steel the nation made last year.
Due to Chinese products been much in the market resulting to prices being as much as 25 percent below the local production costs affecting the local manufacturers, some companies such as ArcelorMitta had plans to cut down on more than 2400 jobs.
Scaw Metals Group, in which IDC has 74 percent of stake lost US $0.08bn in the year through to March thus has plans to cut up to 1000 jobs.
Malinga noted that they would not let China produce steel for them. The new steel mill plant will produce steel that is cheaper through the use of iron ore and coking coal using advanced technology.
The facility which will be located near Witbank in Mpumalanga or Richards Bay in KwaZulu-Natal in South Africa will produce its first steel by 2020.