South Africa’s steel production output for 2024 highlights the growing contribution of secondary steel producers, commonly known as mini-mills, to the country’s economy and its efforts to curb carbon emissions.
While traditional coal-fired blast furnaces accounted for 2.59 million tonnes of steel last year, mini mills – which manufacture steel from recycled scrap metal – produced a comparable 2.11 million tonnes in the same period.
However, the significant difference lies in their environmental impact, as mini-mills emit four to five times less carbon than their primary steel-producing counterparts.
Speaking on the growing prominence of green steel, Amit Saini, a director at Gqeberha-based mini-mill Coega Steels Pty Ltd, explained the driving forces behind the shift towards sustainable steelmaking.
“This shift is driven by increasing regulatory pressures, consumer demand for eco-friendly products, and international commitments to reduce carbon emissions under pacts like the Paris Agreement on climate change,” said Saini.
Saini also noted the significant environmental advantage of green steel produced through scrap recycling. “Steelmaking through scrap recycling is the leading and foremost method of green steel production.
Recycling scrap metal significantly cuts carbon emissions compared to traditional methods,” he said.
Green steel production has gained international traction in recent years, with India emerging as a global leader in the sector.
The South Asian country has introduced guidelines classifying steel based on its carbon footprint. Steel emitting less than 1.6 tonnes of CO2 equivalent (CO2e) per tonne of finished steel (tfs) is rated as five-star green steel, with progressively lower ratings for higher emissions. According to Saini, “This landmark policy underscores the importance of setting clear guidelines to promote green steel.”
The United States and European nations have also adopted stringent green steel regulations, further strengthening the competitive advantage of environmentally friendly steel in global markets. Saini pointed out, “These developments highlight the competitive advantage of green steel, which is sold at a premium in international markets due to its lower environmental impact.”
Saini indicated South Africa’s strong potential to lead the green steel revolution on the African continent. “We have the biggest base of mineral resources compared to other African countries, valued at an estimated US$2.5 trillion (R44 trillion),” he explained. More than 90% of South Africa’s iron ore is currently exported, reflecting limited beneficiation capacity and constraints in the primary steel sector. Saini suggested that enhancing local beneficiation policies for iron ore and coal could add significant value to the domestic steel industry while reducing reliance on exports.
“To maximise the country’s potential as a continental leader, we must revitalise the primary steel sector’s manufacturing capacity. This could be achieved through targeted investments and policy incentives that support cost-effective procurement of raw materials,” said Saini.
To address potential scrap metal shortages in the future, Saini advocated for the integration of Direct Reduced Iron (DRI) into South Africa’s steel production strategy. “DRI is a viable substitute for scrap metal and aligns with the future of steel production in the country, particularly with the increasing adoption of electric arc furnaces (EAFs),” he said.
Saini further highlighted the environmental and economic benefits of DRI-based production. It produces lower carbon emissions and could support sustainable growth in steel production by mitigating scrap availability limitations. South Africa currently lacks a merchant DRI plant, but Saini stressed that affordable raw materials brought about by beneficiation policies could encourage further investment and expand domestic production capacity.
According to Saini, South Africa has received more than US$4 billion (R73 billion) in funding from bilateral and multilateral sources to support carbon reduction initiatives. He emphasised the importance of aligning steel production with these objectives. “Promoting green steel production is a practical and impactful way to meet these commitments.”
In addition to the scrap-recycling process, green steel production is driven by advanced technologies, such as Coega Steels’ induction furnaces. These efficiently melt ferrous materials using electromagnetic induction, offering a cleaner and more sustainable alternative to traditional blast furnaces, which rely on iron ore, coal, and limestone.
The rising demand for environmentally responsible steel, coupled with South Africa’s natural resource wealth, positions the country well to become a green steel leader in Africa. With focused government policies, targeted investments, and an expansion of local beneficiation, Saini said South Africa has a unique opportunity to develop a robust green steel production industry that meets international standards while driving sustainable economic growth.
