Before 2015, trade & industry minister Rob Davies was a staunch critic of ArcellorMittal SA, to such an extent that he removed the 5% duty that was in place at the time.
That was done in retaliation for ArcellorMittal SA’s policy of import parity pricing and its parent group’s repatriation of billions of profits out of the country.
“So, we will continue to pursue tariff reduction in mature industries, such as steel, that produce high-value goods for downstream industries,” Davies said then.
In 2015 everything changed: a black empowerment deal was concluded involving ArcellorMittal SA and well-known individuals, 10% custom duties were introduced and 12% safeguard duties followed in 2017.
Significantly also, Davies’s view on duties made an about-turn; all of a sudden his view was that SA had “no choice” but to impose customs and safeguard tariffs on imports of certain steel products to protect the local industry. By “local industry” he must have meant ArcellorMittal SA, because everything and everybody below ArcellorMittal SA was prejudiced by these duties.
Also of significance was the meeting, prior to the above-mentioned events, between then president Jacob Zuma and the owner of ArcellorMittal SA’s parent group, Lakshmi Mittal, in 2015.
There is a strong perception in the steel industry circles that this meeting set in motion the process aimed at protecting ArcellorMittal SA by means of customs and safeguard duties, which severely prejudiced the steel downstream.
Manufacturing in SA, in particular steel manufacturing, at least partially as a result of these duties, is experiencing business closures and severe job losses, something SA cannot afford.
South Africans consequently need to know who was present during the meeting between Zuma and Mittal. In particular, was Davies present? What was discussed, specifically with regard to the steel industry? Is there a record of that meeting? And what undertakings were given, and in exchange for what?
In an article published in BusinessLive on November 1, Peter Bruce suggests that Davies must come clean at the Zondo inquiry about his interactions with the Guptas. Davies has reportedly indicated that he is ready to testify at the commission.
Thus, while Davies is at the commission, we request Paul Pretorius, the commission’s evidence leader, to interrogate him about the meeting between Zuma and Mittal, a meeting that may have changed the course of SA’s steel industry, perhaps forever — made it uncompetitive, sped up deindustrialisation, and caused business closures and job losses on a large scale — thus putting SA at risk.
The SA steel downstream pays a huge price to keep the monopolistic ArcellorMittal SA alive. Now the steel downstream (and SA) demand answers.
• Papenfus is a director of the National Employers Association of SA.
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