Iscor
Encyclopedia
Mittal Steel South Africa is part of the steel company Arcelor-Mittal
. The company was originally Iscor Limited, a South African parastatal steel company. It was founded in 1928 and was first listed on the JSE Securities Exchange in 1989.
Iscor, with its first works in Pretoria
, was established as a state company in terms of the Iron and Steel Industry Act, No. 11 of 1928. The objectives of establishing the company were
to produce iron
and a range of steel
products, and to create employment opportunities.
Production at the Pretoria plant started in 1934. And on 4 April 1934 the first steel was tapped from the open-hearth furnace at the Pretoria Works. Wartime needs for steel and the local manufacture of numerous necessities brought about a sharp increase in demand. Iscor had to expand, and the Pretoria works had reached their limit of growth.
In 1941 Dr. van der Bijl and his fellow directors decided that expansion in a new area had become necessary. The idea of a new steelworks in Vereeniging was revived. For the immediate war needs it was decided to begin by building a plate rolling mill planned in such a way that it could later form part of a large integrated steelworks.
The situation of the terrain along the Vaal River
west of Vereeniging made it ideal for development. There was sufficient slope for drainage towards the river and the area was downstream from the Rand Water Board's pumping station intake. The heavy industries could be suitably sited on relatively high ground in a position where the prevailing winds would minimise the dangers of pollution. Dr. van der Bijl convinced the directors of Iscor that the area beside the Vaal River was the obvious site for Iscor's new steelworks.
After the discovery of iron ore at Thabazimbi
, the African Metals Corporation
(Amcor) was established near Vereeniging in 1937. The erection of the Plate Mill was completed in 1943 and went into production the same year. Iscor started trading in 1947.
Directly after World War I
, it was decided to build a fully integrated steel works at Vanderbijlpark, and a start was made on this early in 1947. On 4 October 1952 the Vanderbijlpark Works officially opened by His Excellency the Governor General, Dr E.G. Jansen
. Several of the new production units started up in 1953, followed by major expansion schemes in 1956, 1960. From 1964 to 1969 a second development phase started at Vanderbijlpark Works. Large extensions were added; older plants modernised to supply higher quality and value-added products such as electrolytic tinplate for the canning and beverage industries.
On 17 May 1969 the South African Government decided that Iscor's third fully integrated steelworks be erected at Newcastle. The main factor leading to this selection was to decentralise industry away from the Witwatersrand
complex and to promote industrial development in Natal, the best watered province of South Africa. Newcastle, as a border area with an adequate supply of labour, and with the Amcor ironworks that could be taken over to save on initial capital costs as well as to provide an outlet for the iron which was at that time being exported to Yawata in Japan
( the contract for which was to expire shortly), was therefore chosen.
Further factors were that Newcastle was situated on main rail and road routes between Johannesburg
and Durban
, essential services such as water and electricity were already well catered for, and the town had a basic established infrastructure with a settled community. While ore would have to be transported 1 000 km from Sishen
, coking coal was available from nearby and the overall economics were favourable. It was decided that both profile and flat products would be catered for in a plant with an ultimate capacity of 8 million tons per annum of liquid steel. Subsequent changes in steel markets has meant that extension to flat products has been delayed indefinitely and the current capacity is about 2,00 million tons of liquid steel.
From 1972 to 1977 the largest expansion period for Vanderbijlpark Works followed. Iron making facilities were extended and the steel making processes modernised by the commissioning of basic oxygen furnaces and electric arc furnaces. A colour coating line established at the South Works and a whole new works – the North Works was established to manufacture wide hot-rolled, cold-rolled and galvanised products.
1981 saw the Corporation arriving at important decisions on future strategy. The looming shortage of scrap in the country and shortage of high grade coking coals led to the decision to place an order for a coal based kiln type direct reduction plant of 720 000 tons/annum at Vanderbijlpark Works.
The metallurgical plants at Pretoria were very old and uneconomic and caused pollution; it was thus decided to phase out the coke ovens, blast furnace
s and steel conversion plants, and to replace these with a new facility initially based on scrap and electric arc furnaces with the later addition of an iron making plant. Certain of the obsolete rolling mills would also be closed down and the overall works steel making capacity would be reduced to about 900 000 tons of liquid steel/annum.
The world steel industry entered a crisis period during the end of the 1970s and early 1980s with the widespread recession, which occurred at that time. South Africa did not escape this recession and the local demand for steel fell as a result. A world oversupply situation occurred in the steel market with export prices falling to uneconomic levels. During 1982 Iscor was thus forced into the early closure of the two oldest blast furnaces at Pretoria Works, as well as the closure of the so-called South Works at Newcastle which had been taken over from Amcor only a decade earlier.
to accomplish two things: to manufacture cheap steel (to help encourage industrialization) and to create employment. The company did a reasonably good job of the first task, although it became less efficient in the 1970s as it responded less to market pressures than to the political directives of the government of the day. Approximately half of the workforce was black, and were prevented from carrying out skilled or well-paid labour. White workers were provided with subsidized housing, extensive job training, and opportunities for occupational advancement. Black labourers were given free basic accommodation in hostels so that they could be close to their workplace; however these were extremely cramped, dirty and sometimes crime-ridden. The hostels were not open to families and only males were allowed. This became a political issue during the struggle for a democratic South Africa.
After a series of strikes in the 1930s and 1940s, the company provided white workers with cheap housing, generous pensions and health insurance. After forty years of work, skilled workers were eligible for a 100% pension, including annual adjustments for inflation
. Black workers were not eligible for pensions until the 1980s. Blacks never received inflation-adjusted pensions as the company eliminated the pension scheme after it was privitized of the company in 1989.
, Vanderbijlpark, Newcastle, South Africa, Durban
, Vereeniging and Kuils River
. Iscor's mining business has been unbundled into a resource focused company, Kumba Resources.
Iscor is closing or mothballing the Pretoria steelworks and linked Corex plant. Shutting the 480,000 t/year steel slabs arc furnace operation in Pretoria will lead to about 1000 payoffs at a cost of about R70m in severance packages. The 360,000 t/year Corex plant could carry on if pig iron
exports prove feasible.
Arcelor-Mittal
ArcelorMittal S.A. is a global steel company headquartered in Avenue de la Liberté, Luxembourg, Luxembourg. It is the largest steel producing company in the world and is the market leader in steel for use in automotive, construction, household appliances and packaging. It holds sizeable captive...
. The company was originally Iscor Limited, a South African parastatal steel company. It was founded in 1928 and was first listed on the JSE Securities Exchange in 1989.
Establishment of the company
Hendrik van der Bijl, one of the most influential South Africans of the twentieth century, was the driving force behind the establishment of the South African Iron and Steel Industrial Corporation (Iscor).Iscor, with its first works in Pretoria
Pretoria
Pretoria is a city located in the northern part of Gauteng Province, South Africa. It is one of the country's three capital cities, serving as the executive and de facto national capital; the others are Cape Town, the legislative capital, and Bloemfontein, the judicial capital.Pretoria is...
, was established as a state company in terms of the Iron and Steel Industry Act, No. 11 of 1928. The objectives of establishing the company were
to produce iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...
and a range of steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
products, and to create employment opportunities.
Production at the Pretoria plant started in 1934. And on 4 April 1934 the first steel was tapped from the open-hearth furnace at the Pretoria Works. Wartime needs for steel and the local manufacture of numerous necessities brought about a sharp increase in demand. Iscor had to expand, and the Pretoria works had reached their limit of growth.
In 1941 Dr. van der Bijl and his fellow directors decided that expansion in a new area had become necessary. The idea of a new steelworks in Vereeniging was revived. For the immediate war needs it was decided to begin by building a plate rolling mill planned in such a way that it could later form part of a large integrated steelworks.
The situation of the terrain along the Vaal River
Vaal River
The Vaal River is the largest tributary of the Orange River in South Africa. The river has its source in the Drakensberg mountains in Mpumalanga, east of Johannesburg and about 30 km north of Ermelo and only about 240 km from the Indian Ocean. It then flows westwards to its conjunction...
west of Vereeniging made it ideal for development. There was sufficient slope for drainage towards the river and the area was downstream from the Rand Water Board's pumping station intake. The heavy industries could be suitably sited on relatively high ground in a position where the prevailing winds would minimise the dangers of pollution. Dr. van der Bijl convinced the directors of Iscor that the area beside the Vaal River was the obvious site for Iscor's new steelworks.
After the discovery of iron ore at Thabazimbi
Thabazimbi
Thabazimbi is an iron mining town in the Limpopo province of South Africa. The town is situated at the feet of the Ysterberg and is surrounded by the Witfonteinrand and Boshofberg with the majestic Kransberg in the background. The name Thabazimbi means mountain of iron because of the large iron ore...
, the African Metals Corporation
African Metals Corporation
African Metals Corporation is a junior Canadian mining company that undertakes exploration and development of copper and cobalt mines in the Katanga Province of the Democratic Republic of the Congo...
(Amcor) was established near Vereeniging in 1937. The erection of the Plate Mill was completed in 1943 and went into production the same year. Iscor started trading in 1947.
Directly after World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, it was decided to build a fully integrated steel works at Vanderbijlpark, and a start was made on this early in 1947. On 4 October 1952 the Vanderbijlpark Works officially opened by His Excellency the Governor General, Dr E.G. Jansen
Ernest George Jansen
Ernest George Jansen was the second-last Governor-General of the Union of South Africa, holding office from 1950 to 1959.Born in 1881, he graduated with a law degree from the University of the Cape of Good Hope in 1905, and was admitted as an advocate in 1913.An ardent champion of Afrikaner...
. Several of the new production units started up in 1953, followed by major expansion schemes in 1956, 1960. From 1964 to 1969 a second development phase started at Vanderbijlpark Works. Large extensions were added; older plants modernised to supply higher quality and value-added products such as electrolytic tinplate for the canning and beverage industries.
On 17 May 1969 the South African Government decided that Iscor's third fully integrated steelworks be erected at Newcastle. The main factor leading to this selection was to decentralise industry away from the Witwatersrand
Witwatersrand
The Witwatersrand is a low, sedimentary range of hills, at an elevation of 1700–1800 metres above sea-level, which runs in an east-west direction through Gauteng in South Africa. The word in Afrikaans means "the ridge of white waters". Geologically it is complex, but the principal formations...
complex and to promote industrial development in Natal, the best watered province of South Africa. Newcastle, as a border area with an adequate supply of labour, and with the Amcor ironworks that could be taken over to save on initial capital costs as well as to provide an outlet for the iron which was at that time being exported to Yawata in Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
( the contract for which was to expire shortly), was therefore chosen.
Further factors were that Newcastle was situated on main rail and road routes between Johannesburg
Johannesburg
Johannesburg also known as Jozi, Jo'burg or Egoli, is the largest city in South Africa, by population. Johannesburg is the provincial capital of Gauteng, the wealthiest province in South Africa, having the largest economy of any metropolitan region in Sub-Saharan Africa...
and Durban
Durban
Durban is the largest city in the South African province of KwaZulu-Natal and the third largest city in South Africa. It forms part of the eThekwini metropolitan municipality. Durban is famous for being the busiest port in South Africa. It is also seen as one of the major centres of tourism...
, essential services such as water and electricity were already well catered for, and the town had a basic established infrastructure with a settled community. While ore would have to be transported 1 000 km from Sishen
Sishen
Sishen is a town in Northern Cape, South Africa. It is the location of a large iron ore mine.- Transport :The mine is connected to the port of Saldanha Bay by the Sishen-Saldanha Railway Line. The line is electrified at 50 kV AC and the trains using this line are amongst the heaviest trains in the...
, coking coal was available from nearby and the overall economics were favourable. It was decided that both profile and flat products would be catered for in a plant with an ultimate capacity of 8 million tons per annum of liquid steel. Subsequent changes in steel markets has meant that extension to flat products has been delayed indefinitely and the current capacity is about 2,00 million tons of liquid steel.
From 1972 to 1977 the largest expansion period for Vanderbijlpark Works followed. Iron making facilities were extended and the steel making processes modernised by the commissioning of basic oxygen furnaces and electric arc furnaces. A colour coating line established at the South Works and a whole new works – the North Works was established to manufacture wide hot-rolled, cold-rolled and galvanised products.
1981 saw the Corporation arriving at important decisions on future strategy. The looming shortage of scrap in the country and shortage of high grade coking coals led to the decision to place an order for a coal based kiln type direct reduction plant of 720 000 tons/annum at Vanderbijlpark Works.
The metallurgical plants at Pretoria were very old and uneconomic and caused pollution; it was thus decided to phase out the coke ovens, blast furnace
Blast furnace
A blast furnace is a type of metallurgical furnace used for smelting to produce industrial metals, generally iron.In a blast furnace, fuel and ore and flux are continuously supplied through the top of the furnace, while air is blown into the bottom of the chamber, so that the chemical reactions...
s and steel conversion plants, and to replace these with a new facility initially based on scrap and electric arc furnaces with the later addition of an iron making plant. Certain of the obsolete rolling mills would also be closed down and the overall works steel making capacity would be reduced to about 900 000 tons of liquid steel/annum.
The world steel industry entered a crisis period during the end of the 1970s and early 1980s with the widespread recession, which occurred at that time. South Africa did not escape this recession and the local demand for steel fell as a result. A world oversupply situation occurred in the steel market with export prices falling to uneconomic levels. During 1982 Iscor was thus forced into the early closure of the two oldest blast furnaces at Pretoria Works, as well as the closure of the so-called South Works at Newcastle which had been taken over from Amcor only a decade earlier.
| Date | Event |
|---|---|
| 1911 | 15 November - Registration of The Union Steel Corporation of SA Ltd. |
| 1913 | 1 September - casting of South Africa's first steel at USCO. |
| 1916 | Pretoria Works commissioned |
| 1916 | Vereeniging Works commissioned.The Transvaal Blast Furnace Company, Limited is formed.A blast furnace is erected in Vereeniging. |
| 1920 | March - Newcastle Works commissioned. A public company - the Newcastle Iron & Steel Works, Limited formed. |
| 1928 | South African Iron and Steel Industry Act, No. 11 of 1928 passed. 5 June - The South African Iron and Steel Industrial Corporation constituted under the Act. Iscor founded as a statutory parastatal. |
| 1934 | 4 April - The first steel is tapped from the open-hearth furnace at the Pretoria Works. |
| 1937 | The African Metals Corporation (Amcor) established near Vereeniging. |
| 1942 | Iscor company established to meet the increasing demand for steel in South Africa. |
| 1943 | Commissioning of a plate mill at Vanderbijlpark Works. |
| 1942 | Acquisition of a site of 97 square kilometre on the Vaal River. |
| 1947 | Iscor starts trading. |
| 1947 to 1952 | Vanderbijlpark Works develops into a full-fledged integrated steelworks processing iron ore and other raw materials from mines throughout Southern Africa into hot-rolled, cold-rolled, galvanised and tinned sheets and coils. |
| 1952 | 4 October - Vanderbijlpark Works officially opened by His Excellency the Governor General, Dr E.G. Jansen. |
| 1969 | May - the South African Government and Iscor decide to build a third integrated works at Newcastle. |
| 1974 | 17 March - first steel was made at Newcastle Works. |
| 1980s | South African government commits itself to transferring certain state interests to the private sector. |
| 1982 | Iscor closes two oldest blast furnaces at Pretoria Works. |
| 1989 | Iscor privatised. |
| 1989 | November - Iscor Limited shares listed in the Steel and Allied sector of the Johannesburg Stock Exchange. |
| 1991 | Iscor buys USCO's steel division in mid-1991. |
| 1995 | Iscor, together with the Industrial Development Corporation (IDC), decides to pursue the Saldanha Steel project in the Western Cape. |
| 1998 | Saldanha Steel commissioned |
| 2001 | Iscor unbundled to form the steel group, - called Iscor, and a mining company called Kumba Resources. |
| 2001 | 22 November - Iscor enters into a three-year business assistance agreement (BAA) with Anglo-Dutch steel producer LNM Holdings N.V. |
| 2002 | 15 January - Iscor Limited shareholders approve the business assistance agreement with LNM. |
| 2003 | 12 February - Minority shareholders in Iscor Ltd give LNM the go-ahead to proceed with a R1.8-billion partial offer. |
| 2004 | 17 August - LNM acquires controlling stake in Iscor. Iscor Limited renamed Ispat Iscor Limited and registered with the Registrar of Companies. |
| 2004 | December - Ispat International NV acquires LNM Holdings NV, the parent company of Ispat Iscor. Merged company’s rename Mittal Steel Company NV. Mittal Steel merger with International Steel Group of the US, to create the world’s largest steel-maker. |
| 2005 | 14 March - Ispat commences trading under the name Mittal Steel Limited. |
Race relations
The company was created by an act of the Parliament of South AfricaParliament of South Africa
The Parliament of South Africa is South Africa's legislature and under the country's current Constitution is composed of the National Assembly and the National Council of Provinces....
to accomplish two things: to manufacture cheap steel (to help encourage industrialization) and to create employment. The company did a reasonably good job of the first task, although it became less efficient in the 1970s as it responded less to market pressures than to the political directives of the government of the day. Approximately half of the workforce was black, and were prevented from carrying out skilled or well-paid labour. White workers were provided with subsidized housing, extensive job training, and opportunities for occupational advancement. Black labourers were given free basic accommodation in hostels so that they could be close to their workplace; however these were extremely cramped, dirty and sometimes crime-ridden. The hostels were not open to families and only males were allowed. This became a political issue during the struggle for a democratic South Africa.
After a series of strikes in the 1930s and 1940s, the company provided white workers with cheap housing, generous pensions and health insurance. After forty years of work, skilled workers were eligible for a 100% pension, including annual adjustments for inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
. Black workers were not eligible for pensions until the 1980s. Blacks never received inflation-adjusted pensions as the company eliminated the pension scheme after it was privitized of the company in 1989.
Operations
Iscor has become a primary iron and steel producer, with works at PretoriaPretoria
Pretoria is a city located in the northern part of Gauteng Province, South Africa. It is one of the country's three capital cities, serving as the executive and de facto national capital; the others are Cape Town, the legislative capital, and Bloemfontein, the judicial capital.Pretoria is...
, Vanderbijlpark, Newcastle, South Africa, Durban
Durban
Durban is the largest city in the South African province of KwaZulu-Natal and the third largest city in South Africa. It forms part of the eThekwini metropolitan municipality. Durban is famous for being the busiest port in South Africa. It is also seen as one of the major centres of tourism...
, Vereeniging and Kuils River
Kuils River
Kuils River is a town in the Western Cape province, South Africa. It is a level 2 administrative region, and is close to Cape Town's wine routes. It is located near the intersection of the M12 and the R102....
. Iscor's mining business has been unbundled into a resource focused company, Kumba Resources.
Iscor is closing or mothballing the Pretoria steelworks and linked Corex plant. Shutting the 480,000 t/year steel slabs arc furnace operation in Pretoria will lead to about 1000 payoffs at a cost of about R70m in severance packages. The 360,000 t/year Corex plant could carry on if pig iron
Pig iron
Pig iron is the intermediate product of smelting iron ore with a high-carbon fuel such as coke, usually with limestone as a flux. Charcoal and anthracite have also been used as fuel...
exports prove feasible.