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The final step in a package of trade-offs with ArcelorMittal SA (Amsa) will be for the department of trade & industry (DTI) to designate locally made steel for state infrastructure projects.

Amsa’s deal with the competition commission — to pay R1.5bn to settle all outstanding matters under investigation, limit its profit margin on flat steel products and invest R4.6bn in its operations — follows other concessions on both sides. The DTI has put import tariff protection in place for 10 steel products.

Amsa CEO Wim de Klerk says government’s designation of local steel for state infrastructure projects will only increase tonnages by about 120,000/year, but there is more significance in designating local steel for the construction industry.

Paolo Trinchero, CEO of the Southern African Institute of Steel Construction, representing mills and downstream manufacturers alike, says if local steel is designated it includes all the downstream products that are made from it. In theory this benefits upstream mills and downstream fabricators.

But designation is not simple, he says. It is hard to ensure it is implemented and substantial work goes into an application to designate a product.