433369666-The-Case-for-Investing-in-South-Africa

68 |
BASE METALS AND METALS FABRICATION SECTORS
• South Africa has the most established metals sector in Africa, hosting major international, vertically-integrated
mining firms such as Anglo American and South 32, as well as ArcelorMittal SA in the steel value chain.
• The country’s non-ferrous metals production capacity includes:
- Non-ferrous base metals from raw and recycled materials, including aluminium (South Africa is Africa’s top
producer of aluminium, accounting for about 1% of global production), lead, zinc and tin;
- Unwrought non-ferrous base metals;
- Production of mattes of nickel and copper; and
- Semi-finished metal products via rolling, drawing and extruding to produce powders, flakes, foil, plates,
sheets or strips, bars, rods or profiles, wire, tubes, pipes and pipe fittings.
• The basic non-ferrous metals industry accounted for about 3.3% of overall merchandise exports in 2018.
• The industry is supported by strategic policy support programmes targeting local components supply in the
automotive value chain. This has enhanced its prospects and the scope for increasing local beneficiation.
GROWTH AND EXPORT PERFORMANCE OF THE
BASE METALS AND METAL FABRICATION SECTORS
• The basic iron and steel sector has recorded an average annual growth rate of 2.4% since the 2009 recession
year. Its GDP has returned to pre-Global Financial Crisis (GFC) levels in real terms.
• Sustained surpluses in the global steel market, protectionism and tension in the world’s trading environment,
alongside import penetration in the South African market, particularly from low-cost steel producers, have been
posing significant threats to this recovery momentum.
• The value-add of the metal products sector, which has a high export propensity, has now exceeded pre-GFC
levels in real terms.
• South Africa has developed a competitive advantage in primary aluminium fabrication, despite not being
endowed with bauxite resources. The export orientation of the sector positions it well to leverage on regional
market growth opportunities.
• Export competitiveness to be supported by South Africa’s renewable energy and rail capacity expansion plans.
BASE METALS AND METALS FABRICATION SECTORS:
GDP TRENDS
BASE METALS AND METALS FABRICATION SECTORS:
GDP TRENDS
30
90
Basic iron and steel exports
80
Basic non-ferrous metals exports
ZAR billion at 2010 basic prices
ZAR billion at constant 2010 prices
25
20
15
10
5
Basic iron and steel GDP
Basic non-ferrous metals GDP
Metal products excluding machinery GDP
ZAR billion at 2010 basic prices
ZAR billion at 2010 basic prices
70
60
50
40
30
20
10
Metal products (excl. machinery) exports
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018