Industrial Development Corp., a South African state lender, is in talks with potential partners on proposals to build a steel plant to compete with ArcelorMittal South Africa Ltd. and Evraz Highveld Steel and Vanadium Ltd.
The project would have capacity of 2.5 million metric tons a year and use technology to cut output costs, Dave Cousins, the IDC executive for mining and beneficiation, told a Cape Town conference without naming the parties involved in the talks.
Most South African steel is produced using blast furnaces requiring imported hard coking coal and high-grade iron ore. The IDC has studied other technology, as prices for coking coal have outstripped those for steel, and will focus on low-cost output to meet an expected tripling in demand by 2020, Cousins said.
The IDC studied titanium blast furnaces and rotary hearth furnaces, both able to use lower-grade iron ore and locally produced coal, he said, without stating which is preferred.
“We have a solution, and we are engaging with partners,” Cousins said. “There is room for additional steel capacity.”
The IDC estimates South African capacity of 9.3 million tons a year compared with consumption of 5.4 million tons.