Patel hails court dismissal of application by metal recyclers

28 Nov 2014

Business Day, page 2
Mark Allix

ECONOMIC Development Minister Ebrahim Patel has welcomed the judgment of the North Gauteng High Court dismissing an application to interdict the implementation of the government’s new scrap-metal export regulations. The regulations were part of state efforts to set a "developmental" iron-ore and steel price. The minister said that Monday’s court decision to dismiss the application of the Metal Recyclers Association of South Africa (MRA), with costs, reaffirmed the prerogative of the executive arm of the government to make policy decisions and directives that seek to reindustrialise the economy, and create jobs.

The application for an interim interdict against the new export regulations, which came into effect on September 16, was submitted by the MRA. It was opposed by Mr Patel and SA’s International Trade Administration Commission (Itac). It was also opposed by the National Union of Metalworkers of South Africa, Trade and Industry Minister Rob Davies, and Water and Environmental Affairs Minister Edna Molewa. "I appeal to all role-players to use the new framework to rebuild the steel manufacturing industry, including the foundry sector, create more jobs and strengthen the government’s R1-trillion national infrastructure build programme," Mr Patel said.

He was referring to the first phase of the government’s R4-trillion public infrastructure roll-out plan for the next 15 years. "The government had an obligation to make policy interventions to reverse the decline in the local foundry and scrap-processing sector which resulted in over 10,000 job losses," he said. MRA executive member Bernard Maguire said on Monday the association could not respond to the minister’s statements as it was waiting for its lawyers to pass the judgment on to it.

Mr Patel had issued a policy directive on scrap-metal exports in May this year that was followed by Itac’s announcement in August of new export permit guidelines. In terms of the guidelines, exporters of scrap metal had to first offer domestic foundries, mini-mills and secondary smelters scrap metal at a price discounted by 20% to international prices, before qualifying for an export permit. This was intended to improve the security of supply of affordable and quality scrap-metal feedstock to the local metal industry, meet carbon emission targets, and support the public infrastructure plan, which relies on large steel procurements.