Nelson Mandela signed the new Constitution into law in 1996; that same year, the IDC and Iscor signed a deal that put Saldanha Steel on the map.

saldanhasteelsaldanhasteelIt was an historic moment for South Africa when President Nelson Mandela, amid flashing cameras and cheers from the crowd, signed into law the Constitution of South Africa on 10 December 1996. The date on which the constitution was signed also marked International Human Rights Day.

At the time there was also a significant signing for the steel industry: the Industrial Development Corporation signed a deal with steel company Iscor to establish a mini-steel project that would produce high quality, hot rolled steel coil from iron ore, a first for South Africa.

The mini-mill, which would later be called Saldanha Steel after the IDC and Iscor pooled resources to implement the project, would utilise what was at the time a unique concept of producing steel from iron ore rather than from steel scrap. This gave it a competitive edge over most mini-mills in the country, which used costly steel scrap as input.

Despite being a South African greenfields project, expected initial production was a whopping one million tons of hot rolled steel coil for export. In addition, expected revenues from these exports would grow South Africa's gross domestic product by approximately 0.84% over five years, or 0.17% a year.

The production facility of the mini-mill comprised a Corex C2000 direct smelting unit, which converted iron ore to produce 650 000 tons of liquid iron ore, plus reducing gas, a year. A shaft type direct iron ore reduction plant used the gas generated by the Corex unit to produce 804 000 tons of sponge iron a year.

The liquid iron and the sponge iron were converted into steel using an arc electric furnace. The resultant steel was cast into a continuous thin slab by an equalising furnace and a finishing hot strip rolling mill to produce 1.23 million tons of hot rolled coil a year.

Sishen, Port Elizabeth and Newcastle had been considered as possible locations for the steel mini-mill. The decision to set up in the Western Cape coastal town of Saldanha Bay, however, was a boon for residents. When it was commissioned in 1998, more than 680 people, mostly from the town, were employed at the plant.

Local business also benefited; non-core business of Saldanha Steel, such as major maintenance, off-site transportation, reclaiming of scrap and catering, were sub-contracted to local entrepreneurs.

In December 2001, Iscor's steel and mining groups were unbundled into two separately listed mining and steel companies: Kumba Resources and Iscor, respectively. By the end of 2002, Iscor had acquired full control of Saldanha Steel.