Integrated Annual Report 2016
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creating value for all
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How we create social and human value

As Africa’s largest primary steel producer, ArcelorMittal South Africa creates vast social and human capital. Our products – produced in South Africa by South Africans using mostly South African raw materials and skills – are at the heart of the manufacturing, construction, mining and energy sectors – sectors that employ millions and which create the infrastructural backbone underpinning our economy and the livelihoods of present and future generations.

We are committed to working with the private sector, government and labour to unlock economic growth, industrial development and job creation.

Here we present some of the many ways in which we as a company, as an employer, customer and steel producer create significant value for South Africa and its people.

Employer, job creator and
skills developer

Over 9 000 permanently employed by ArcelorMittal South Africa in 2016 of whom 64%* were ACI (African, coloured and Indian)

Skills Development

3 jobs created for every 1 000 tonnes of steel produced

Over 519 000 hours of training conducted at a cost of R184 million

R127 million spent on technical training, apprenticeships and bursaries in 2016

For details on our performance as an employer, see creating a high-performance culture

   
Local economic and social impact

Our plants are at the very heart of at least three regions which rely on them for employment and economic activity and to which we contribute through community investment and training

Social impact map

In 2016 we spent R2 018 million on maintaining and enhancing our plants, in the process ensuring our ability to sustain employment in, especially, the Vaal region, northern KwaZulu-Natal and the West Coast. Much of this maintenance work was carried out by local contractors and suppliers.

Key capital expenditure investments were:

  • Newcastle – coke oven battery N2 repair (R286 million) – ongoing to 2017
  • Vanderbijlpark – coke oven battery V4 repair (R135 million) – ongoing to 2017
  • Vanderbijlpark – standalone gas fired boiler (R138 million)
  • Saldanha – Midrex D01 tube bundle replacement and installation (R95 million)
  • Saldanha – Corex campaign extension (R73 million)

 

In 2016 ArcelorMittal South Africa:
Employed 85% of new recruits from
local communities (2015: 85%)
  Registered 470 new emerging local businesses as suppliers, bringing the total registered to 1 017   Reached 527 teachers and 20 000 individuals with our three sponsored science centres
For detail on our local economic and social impact
Invested R17.4 million in local communities through CSI
(2015: R12.6 million – (2014: R16.3 million)
  Opened a 1 600m2 incubation hub which will create an initial
77 jobs and be co-funded by the Department of Trade and Industry
  Reduced its fresh-water intake per tonne of steel to 3 100 litres per tonne – against a world average of 4 800 litres
For detail on our environmental impact

For detail on our environmental impact click here.

 

Catalyst for change
  • 17% – percentage of our shares held by Likamva Resources, a 100% black-owned company following our 2016 B-BBEE transaction
  • 5.1% – percentage of company shares given to a new employee trust, bringing to 6.6% employee and manager ownership
  • R20 million – 2016 spend on enterprise and supplier development
  • 95% – percentage of 2016’s 546 apprentices and 117 candidate artisans who were black; 93% of candidate technicians were black as were 61% of candidate engineers
  • R2 750 million – 2016 procurement spend with exempt micro-enterprises and qualifying small enterprises

 

+ Externally assured.

Economic growth engine
43 new products/new specifications being actively developed by long steel products to meet customer needs, to help them find new markets and create additional jobs   Economic growth engine
R479 million – value of strategic and value-added export rebates given to SA customers in 2016
(2015: R158 million)
  R23 billion value added by creating products which otherwise would be imported – 0.9% of direct GDP  
R5.5 billion
export revenue
  billion
spent on 3 268 suppliers
 

 

NDP enablement through benefication

The National Development Plan (NDP) contains key targets that are supported by ArcelorMittal South Africa’s activities, the key being the secure domestic supply of steel required to execute the NDP’s ambitious infrastructure plans. ArcelorMittal South Africa directly and indirectly contributes to the attainment of many of the plan’s social, economic and environmental targets.

National economic, industrial and employment impact

More than 70% of our South African sales go to four key industrial sectors which, between them, account for some 20% of South Africa’s GDP and almost two million jobs.

  Sector GDP
contribution
%
Our 2016
sales
(000 tonnes)
Employment
(000)
 
  Construction 3.6 1 673 1 300  
  Utilities (water and energy) 2.5 168 100  
  Mining 6.3 299 430  
  Automotive 7.5 241 120  

In 2016 ArcelorMittal South Africa and its first order suppliers contributed an estimated R41 billion to the national economy.

ArcelorMittal South Africa will enable the NDP by creating value through converting raw material to steel   Touching every part of the South African economy, steel is central to the achievement of the 2030 goals of the NDP
raw material to steel   Major focus of NDP 2030
1 Raw materials considered are iron ore and coking coal (excludes limestone and dolomite), export parity price as per 2015 average estimates as reported by IMF (Iron Ore) and World Bank (South African export coal).
2 2016 revenue less EPP value of iron ore and coal consumed by company.
3 Value of total production.
  Source: Steel Index at IMF, World Bank, ArcelorMittal South Africa internal data, BCG analysis.
   

 


© ArcelorMittal 2017