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A Healthy Economy Needs Healthy Steel Industry

By Charles Dednam, Secretary General of the South African Iron and Steel Institute (SAISI)

Steel is one of the world’s essential materials. It is fundamental to every aspect of our lives, from infrastructure and transport to the humble tin-plated steel can. Our largest buildings and most precise instruments are made of steel. Steel is strong, versatile, and infinitely recyclable. It has been the foundation of the last 100 years of progress, and will be equally fundamental to meeting the challenges of the next 100.

Average world steel use per capita has steadily increased, from 150kg in 2001 to around 230kg in the 2020s. South Africa’s average steel use per capita, however, has dropped by 37% from its peak in 2013 to 67kg today – less than half the global average. This reflects South Africa’s struggling economy and the decline in our manufacturing capacity. South Africa desperately needs to regain its economic momentum, and with steel being crucial to its ability to do so, it is appropriate for the government to ensure this is possible.

Steel is every developing nation’s catalyst for growth and development. Steel is essential in energy, construction, automotive and transportation, infrastructure, packaging, and machinery. Steel’s properties make innovation possible, enabling achievable ideas, employing new solutions, and possibilities to be reality. Steel has one of the highest strength-to-weight ratios of any construction material, advancing the art of engineering.

The housing and construction sector is the largest consumer of steel today, using more than 50% of the steel produced globally. The building and construction sector in South Africa will use more than 62% of all steel destined for the domestic market. New lightweight steel makes applications lighter and more flexible while retaining the required high strength. In addition, lightweight steel structures adopt technologies with a reliable quality that can bear strong wind, heavy snow and rain.

Modern steel products have never been more sophisticated, from smart car designs to high-tech computers, from cutting-edge medical equipment to state-of-the-art satellites. Architects can create any shape or span they desire and design steel structures to suit their innovative designs.

South African steelmakers can develop steel to satisfy sophisticated market demand, and South Africa has the capability and technology to excel in advanced product design. South Africa is particularly active in designing, manufacturing, and supplying lightweight steel structures.

Steel provides universally valued employment, training and development. A job in steel places you at the centre of some of the most significant technical challenges of today with an unparalleled opportunity to experience the world.

Steel companies generate jobs and substantial tax revenues which benefit the local communities in which they operate. Globally, over six million people work directly for the steel industry, some 28 000 of them in South Africa. The steel industry offers employees the opportunity to further their education and develop their skills, providing 7.18 days of training per employee in South Africa in 2020.

Those working in jobs supported by the steel sector spend their wages on consumer goods and services. This wage-funded spending supports further economic activity in the various commercial sectors with an implied ratio of 1:7 for induced jobs resulting from the activity in the primary steel sector.

The steel industry cares about the health and well-being of the people who work with us and live around us. The steel industry is committed to the goal of an injury-free workplace and organises an industry-wide safety audit on Steel Safety Day every year. The injury rate per million hours worked has decreased by 82.3% over the past 15 years.

Steel is local – we touch people’s lives and make them better. We create jobs, we build communities, and we drive a local economy for the long term. Many steel companies build roads, transport systems, schools and hospitals in the areas around their sites. Once established, steel plant sites operate for decades, providing long-term stability in terms of employment, community benefits and economic growth.

The steel industry does not compromise on its environmental responsibility. Steel is the primary material used in delivering renewable energy: solar, tidal, geothermal and wind. It is the world’s most recycled material, with around 630 Mt recycled annually. In 2020, the recovery and use of steel industry co-products reached a worldwide material efficiency rate of 97.86%. Around 90% of the water used in the steel industry is cleaned, cooled and returned to the source. Water returned to rivers and other sources is often cleaner than when extracted.

We recognise that people are interested in steel and its effect on the economy because of its critical role. Therefore, we are committed to being open, honest, and transparent in all our communications about our industry, its performance, and our impact. The steel industry publishes data on production, demand and trade at national and global levels, which is used for analysing economic performance and making forecasts. It proactively participates in OECD, IEA, and UN meetings, providing all the information required on key industry topics that impact our society. In addition, we participate in the SMP process and the NDP on a national level.

We believe there are ways to optimise installed manufacturing capacity, drive down the fixed-cost component of South African manufacturing, and deliver more competitive steel products. And we wholeheartedly believe that a revitalised local steel sector can be an effective enabler of South Africa’s desperately needed economic recovery, if we all work together to make this happen.

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