AMSA Looking for Lowering Its Iron Ore Cost With or Without Kumba
On Friday, the chief executive at ArcelorMittal South Africa (AMSA), Paul O'Flaherty, said that if Kumba Iron Ore does not consider lowering its prices, the steel producer might consider importing cheaper iron ore.
Kumba is the biggest iron ore producer of Africa and whether or not it agrees to the terms will be seen in the near future.
AMSA has been paying Kumba sixty percent more than the present market rates for iron ore as it had no way out just like the other localized steel industries.
The steel industry is facing a flood of low-priced steel imports, mainly coming from China along with a slow economic growth. In the previous half of the year which ended in June, AMSA reported eight percent dip in its revenue to R16.4 billion when compared with the same time last year.
On Friday, during the presentation of the financial results of the company till June, O'Flaherty did not give a bright picture for the future of steel production in South Africa.
He said, "If you were in our shoes would you be buying iron ore from Kumba? Our options are to renegotiate prices with Kumba or import iron ore cheaply." He said that the company will look for solutions to lower the cost for iron- ore with Kumba or without it.
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