Evraz begins recovery from 2012 strike - CNBC Africa

Evraz begins recovery from 2012 strike


by admin 0

The steel industry. PHOTO: Getty Images

The company’s operating loss for the year ended 31 December 2013 was 293 million rand, compared to a loss of 854 million rand for 2012, mainly attributed to lower production due to the effect of the 2012 strike.

Earnings before interest, taxes, depreciation, and amortization were at a profit of 22 million rand, compared to a 697 million rand loss the prior year.

Revenue from sale of goods increased from 4,346 million to 5,190 million rand.

“Labour stability, health of the market and production stability continue to pose a threat to the operations of the company and the ability to generate profits,” said [DATA EHS:EVRAZ Highveld Steel and Vanadium Limited].

The integrated steel and vanadium slag producer's iron output increased by 3 per cent to 638 912 tonnes for the year compared to 2012 when output suffered as result of a four week strike.

Steel output rose 12 per cent from 571 787 tonnes to 642 405 tonnes in 2013 year as a result of increased iron availability and improved stability in the steel plant.

In their mining division, production of lump ore increased by 22 per cent to 1 430 346 tonnes, while fine ores rose seven percent to 651 209 tonnes for the year.

The pit mining trial that commenced in March 2013 has been completed, while first commercial pit mining is scheduled to start in the first half of 2014.

In their vanadium division, a total of 49 299 tonnes of vanadium slag was produced containing 6 675 tonnes for the year, compared to 43 132 tons slag containing 6 205 tonnes for 2012.

Despite these earnings, the company believes that the global economy remained weak in the fourth quarter of 2013 and has not reached the levels of growth needed to support a strong recovery in steel demand.

“It is predicted that global steel demand is likely to increase by 3.1 per cent to 1 475 million tonnes in 2014 following growth of only 2 per cent in 2013,” added the group.

They stated that the sub-Saharan African region however, remains a key growing market for the steel industry, driven mainly by opportunities from the widely published infrastructure projects in countries such as Nigeria, Kenya, Tanzania and Zambia, as well as mining related investments in Mozambique.

“However global producers who target this market aggressively with competitive pricing keep this market under pressure,” said Evraz.  

“A volatile labour market remains a major risk to the South African economic stability. The domestic economy remains under pressure of electricity supply concerns and notable energy tariff increases, which adversely affects the competitiveness of the domestic steel industry.”