Iscor Limited
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ArcelorMittal South Africa is part of the steel company Arcelor-Mittal. The company was originally Iscor Ltd., a
South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...
n
parastatal A state-owned enterprise (SOE) is a business entity created or owned by a national or local government, either through an executive order or legislation. SOEs aim to generate profit for the government, prevent private sector monopolies, provide goo ...
steel company. It was founded in 1928 and was first listed on the
JSE Securities Exchange JSE Limited (previously the JSE Securities Exchange and the Johannesburg Stock Exchange) is the largest stock exchange in Africa. It is located in Sandton, Johannesburg, South Africa, after it moved from downtown Johannesburg in 2000. In 2003 ...
in 1989. In January 2025 it announced that it would be shutting down steel operations in Newcastle and Vereeniging.


History


Establishment of the company

Hendrik van der Bijl Hendrik Johannes van der Bijl FRS (23 November 1887 – 2 December 1948) was a South African electrical engineer and industrialist and is regarded as one of the greatest South Africans for his contribution to the country's development. He was t ...
, one of the most influential South Africans of the twentieth century, together with Dr. Fredrik "Frikkie" Meyer, (a student of Albert Einstein while studying in Berlin), and others, were the main driving force behind the establishment of the South African Iron and Steel Industrial Corp. (Iscor). Iscor, with its first works in
Pretoria Pretoria ( ; ) is the Capital of South Africa, administrative capital of South Africa, serving as the seat of the Executive (government), executive branch of government, and as the host to all foreign embassies to the country. Pretoria strad ...
built by the German
Demag Demag (In German ''Deutsche Maschinenbau-Aktiengesellschaft'') was a German heavy equipment industrial group whose individual companies are now scattered. The Demag name can be today found for example as the Demag Cranes and Components and Sum ...
, 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 is a chemical element; it has symbol Fe () and atomic number 26. It is a metal that belongs to the first transition series and group 8 of the periodic table. It is, by mass, the most common element on Earth, forming much of Earth's o ...
and a range of
steel Steel is an alloy of iron and carbon that demonstrates improved mechanical properties compared to the pure form of iron. Due to steel's high Young's modulus, elastic modulus, Yield (engineering), yield strength, Fracture, fracture strength a ...
products, and to create employment opportunities. Production at the Pretoria plant started in 1934. 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 Vereeniging ( ; ) is a city located in the south of Gauteng province, South Africa, situated where the Klip River empties into the northern loop of the Vaal River. It is also one of the constituent parts of the Vaal Triangle region and was forme ...
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 The Vaal River ( ; Khoemana: ) is the largest tributary of the Orange River in South Africa. The river has its source near Breyten in Mpumalanga province, east of Johannesburg and about north of Ermelo and only about from the Indian Oce ...
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 is an iron mining town in the Limpopo province of South Africa. The town is 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 ' ...
, the African Metals Corp. (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 II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
, it was decided to build a fully integrated steel works at
Vanderbijlpark Vanderbijlpark is an industrial city with approximately 95,000 inhabitants, situated on the Vaal River in the south of Gauteng province, South Africa. The city is named after Hendrik van der Bijl, an electrical engineer and industrialist. V ...
, 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 Newcastle usually refers to: *Newcastle upon Tyne, a city and metropolitan borough in Tyne and Wear, England, United Kingdom *Newcastle-under-Lyme, a town in Staffordshire, England, United Kingdom *Newcastle, New South Wales, a metropolitan area ...
. The main factor leading to this selection was to decentralise industry away from the
Witwatersrand The Witwatersrand (, ; ; locally the Rand or, less commonly, the Reef) is a , north-facing scarp in South Africa. It consists of a hard, erosion-resistant quartzite metamorphic rock, over which several north-flowing rivers form waterfalls, w ...
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 is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...
( 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 ( , , ; Zulu language, Zulu and Xhosa language, Xhosa: eGoli ) (colloquially known as Jozi, Joburg, Jo'burg or "The City of Gold") is the most populous city in South Africa. With 5,538,596 people in the City of Johannesburg alon ...
and
Durban Durban ( ; , from meaning "bay, lagoon") is the third-most populous city in South Africa, after Johannesburg and Cape Town, and the largest city in the Provinces of South Africa, province of KwaZulu-Natal. Situated on the east coast of South ...
, 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 oven Coke is a grey, hard, and porous coal-based fuel with a high carbon content. It is made by heating coal or petroleum in the absence of air. Coke is an important industrial product, used mainly in iron ore smelting, but also as a fuel in stove ...
s,
blast furnace A blast furnace is a type of metallurgical furnace used for smelting to produce industrial metals, generally pig iron, but also others such as lead or copper. ''Blast'' refers to the combustion air being supplied above atmospheric pressure. In a ...
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.


Race relations

The company was created by an act of the
Parliament of South Africa The Parliament of the Republic of South Africa is South Africa's legislature. It is located in Cape Town; the country's legislative capital city, capital. Under the present Constitution of South Africa, the bicameralism, bicameral Parliamen ...
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 Subsidized housing is a subsidy aimed towards alleviating housing costs and expenses for impoverished people with low to moderate incomes. In the United States, subsidized housing is often called "affordable housing". Forms of subsidies include d ...
, extensive job training, and opportunities for occupational advancement. Black labourers were given free basic accommodation in
hostels A hostel is a form of low-cost, short-term shared sociable lodging where guests can rent a bed, usually a bunk bed in a dormitory sleeping 4–20 people, with shared use of a lounge and usually a kitchen. Rooms can be private or shared - mixe ...
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 In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
. 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 privatized of the company in 1989.


References


External links


Mittal Steel South Africa
{{Authority control Steel companies of South Africa ArcelorMittal