Posted on 12 Feb 2016
The IDC was finalising a feasibility study for the mill, chief executive officer Geoffrey Qhena said. It would make as much as 5 million tonnes of steel annually, or about 71% of South Africa’s current capacity, and comes as other producers such as the local unit of ArcelorMittal are cutting jobs and closing plants as they struggle to compete against cheap imports from China.
The Bloomberg Commodity Index of returns on raw materials slumped to a 25-year low last month, with copper, zinc and lead recently touching multi-year lows as continued weakness in the economy in China, the world’s largest metals consumer, curbs demand.
“The longer it goes, the more worried we become,” Qhena said in an interview in Cape Town on Wednesday, referring to the commodity-price rout. “There will probably be more blood than we’ve seen now.” Restructuring could entail payment holidays and converting debt into equity, he said, adding that the level of impairments the IDC had recorded in the year that ended in March was higher than it had been before.
