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In Episode 5 of IN FOCUS: Built to Last – The Future of South Africa’s Industrial Businesses, Andrew Bahlmann and Rick Grantham, joint CEOs of Deal Leaders International, look at what makes a business transaction-ready and the common mistakes that can undermine a sale, recapitali

In Episode 3 of IN FOCUS: Built to Last – The Future of South Africa’s Industrial Businesses, Paola Ferrari, head of mergers and acquisitions at mining equipment manufacturer Epiroc, and Mark Salmon, head of the Special Situations Fund at Differential Capital, examine what is dri

In Episode 2, Part 2 of IN FOCUS: Built to Last – The Future of South Africa’s Industrial Businesses, RMB Ventures CEO Amina Pahad considers what makes a business ready for outside investment or a strategic partner, including clarity around why a partner is needed, transparency a

In Part 2 of Episode 1 of IN FOCUS: Built to Last – The Future of South Africa’s Industrial Businesses, Van Zyl discusses the specialist expertise that has enabled South African mining professionals and companies to build a presence across global markets.

In Part 1 of Episode 1 of IN FOCUS: Built to Last – The Future of South Africa’s Industrial Businesses, he discusses how Multotec has structured its operations to respond to those differences, including establishing local manufacturing, assembly and service capabilities where pro

In Episode 2, Part 1 of IN FOCUS: Built to Last – The Future of South Africa’s Industrial Businesses, he looks at the transition from founder-led to professionally managed businesses, arguing that founders need to step back from day-to-day operations as companies grow and build m

Watch Episode 4 of IN FOCUS: Built to Last for more on the capabilities, strategies and market opportunities that can shape the long-term value of South Africa’s industrial businesses.

Engineering News editor Terence Creamer discusses the impact that the closure of the Newcastle Works and ArcelorMittal South Africa’s long-steel business is having downstream in the steel industry.

Eskom chairperson Dr Mteto Nyati, whose term has been extended by a further three years, says the board's top priority has shifted from guaranteeing electricity stability to ensuring affordability.

In addition, he drew a direct link between that goal and moves under way to fully separate the National Transmission Company South Africa (NTCSA) from Eskom Holdings, while questioning the prevailing view that he and the board were opposed to such restructuring.

Speaking after Electricity and Energy Minister Dr Kgosientsho Ramokgopa confirmed that Cabinet had endorsed his reappointment as from November 1, Nyati said the board would now focus on implementing the 'Eskom 2.0' strategy outlined for it by its shareholder.

The strategy has multiple objectives, but places emphasis on the need for affordable electricity for both businesses and households and to facilitate government's reindustrialisation vision.

"To make sure that we have energy that is affordable, you need to also demonstrate that you have embraced the liberalisation of the market, because competition is actually a healthy thing to drive down the costs.

"So this whole transition, this unbundling that we are part of, is part and parcel of helping us to drive down the costs," Nyati said, while arguing that Eskom's 103 years of experience meant that it was well placed to compete in a more liberalised market.

"It's for this reason that we really did not quite understand why there was always this feeling that Eskom is against this change; this change, as much as it is introducing competition, is actually a healthy thing for Eskom because it's going to be making us better."

This statement follows a period of uncertainty over whether the Eskom board was fully in support of the creation of an independent State-owned Transmission System Operator (TSO), with ownership and control of the transmission assets.

This reform had been strongly endorsed by President Cyril Ramaphosa, who set up a task team in February to oversee the creation of a TSO with the transmission assets, in direct contradiction to an earlier Eskom plan for the assets to remain in the hands of a subsidiary.

A process was now under way to appoint a transaction adviser to support government implement the unbundling of NTCSA, with a request for proposals having been released to secure such an adviser.

Nyati and Ramaphosa also recently held direct discussions on the issue, after which Nyati described government's decision to establish a fully independent TSO with ownership and control of the transmission assets as "the right policy".

Besides the focus on electricity affordability, Nyati said the Eskom board would also be prioritising growing Eskom's role in renewable energy, while expanding its role in the Southern Africa region and facilitating data-centre and minerals beneficiation investments.

The Eskom board would be holding a three-day strategy session in October, during which it would seek to finalise its approach to the Eskom 2.0 strategy objectives that had been set for it by its shareholder.

Ramokgopa said that elements of Eskom 2.0 were already in place, including the launch of Eskom Green as the group's vehicle for rolling out renewable energy.

"The board is expected to develop a single roadmap for Eskom over the next three, five and ten years.

"It must define the utility's public obligations, its future generation mix, its commercial position and the investments required to sustain them," Ramokgopa said, indicating that he saw the group playing a central role in both gas-to-power and nuclear.

The Minister also stressed that Eskom would be expected to fulfil its mandate without relying on repeated fiscal support or sustained double-digit tariff increases.

Here, resolving the municipal arrear debt problem was highlighted as crucial, with Eskom having indicated in August that the debt had increased to R119-billion.

"Municipal debt threatens the financial sustainability of electricity supply and the resources ...

The Southern African Institute of Steel Construction (SAISC) has confirmed that its fabricating members have experienced supply constraints following the closure of ArcelorMittal South Africa's Newcastle long-steel operations and is calling for temporary tariff relief as a bridging measure while alternative local supply is developed.

CEO Amanuel Gebremeskel tells Engineering News that the consequences of the closure for the downstream sector have been significant, with shortages of structural steel products having affected the ability of fabricators to price, programme and execute projects with certainty.

"In some cases, members have lost thousands of tonnes of potential fabrication work because of the risk associated with material availability," he reports.

Project designs have also had to be reconsidered or changed to accommodate available steel, introducing additional engineering, procurement and fabrication costs.

"This is particularly concerning in sectors such as infrastructure, mining, energy, logistics and commercial construction, where certainty of material supply is critical to project planning and delivery."

A key concern for the downstream industry, Gebremeskel explains, relates largely to timing.

"The loss of Newcastle production capacity coincided with the introduction of additional tariff protection on a range of long structural steel products, at a point when alternative domestic production had not yet developed sufficiently to compensate fully for the resulting market gap."

Following the first phase of a steel tariff review by the International Trade Administration Commission of South Africa (Itac), general tariffs on several long-steel imports were increased to 10% as from May.

In addition, following a separate anti-dumping investigation, imports of structural steel and steel sections from China and Thailand have, since March, been exposed to antidumping duties of 74.98% and 20.32% respectively.

New tariff rebates have been proposed but have, to date, been implemented on a limited number of tariff subheadings, and Itac has indicated that further rebates may be created only following the completion of the second phase of the tariff review.

Preliminary determinations in relation to new protection measures and new rebates arising from the second phase were Gazetted on September 18, with four weeks set aside for public comment.

For its part, SAISC has called for temporary tariff relief on affected long products as a bridging measure until alternative local supply emerges to adequately service the market.

"We support the development of sustainable domestic steelmaking capacity, but trade protection and localisation objectives need to be balanced against the practical requirements of the downstream industry," Gebremeskel argues.

"Where particular structural products cannot currently be supplied locally in the required quantities, within commercially reasonable lead times and at the appropriate quality, there needs to be an effective mechanism through which the downstream market can access the material required."

Gebremeskel believes the availability of steel should be considered using a three-pronged assessment mechanism that considers whether the required product is manufactured in South Africa, whether it is available in the required quantity within a reasonable timeframe, and whether the material meets the required quality, compliance and traceability standards.

"A product being theoretically manufactured domestically does not necessarily mean that it is practically available to a fabricator facing a project delivery deadline."

Gebremeskel insist that SAISC does not believe that localisation and downstream competitiveness should be viewed as opposing objectives.

"A strong and sustainable domestic steelmaking industry is strategically important to South Africa and to the constructional steel sector.

"At the same time, protection measures need to recognise periods where domestic capacity cannot yet meet the ful...