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Driving Change in Steel Making: The Role of AMSA Stakeholders and Civil Society

24 May 2024 at 12:00 pm

IMMEDIATE RELEASE: Ahead of ArcelorMittal South Africa (AMSA)’s 2024 AGM, the Centre of Environmental Rights (CER) publishes a new report highlighting the responsibility of stakeholders in AMSA’s steel value chain. The report, titled “ArcelorMittal and the Responsibility of Stakeholders in the Steel Value Chain“, highlights the pivotal role of AMSA’s stakeholders across the steel value chain, in influencing steel manufacturers to address climate change risks. Importantly, the report als highlights the opportunities for AMSA to transition to green iron and steel making, highlighting the immense potential for AMSA to become a first mover on carbon-free steelmaking in the region, avoiding carbon taxes – both domestically and abroad – and addressing the harmful impacts of pollution on local communities and the environment.

“It is a crucially important time for AMSA and its stakeholders” says Leanne Govindsamy, Head of the Corporate Accountability & Transparency Programme at the CER. “Investors, financiers, and auto companies should all be asking tough questions of AMSA, demanding more urgency and ambition on climate action plans, as well as in relation to meeting pollution standards and laws. AMSA is faced with immense opportunity as it could become a world leader in zero carbon steel making, adding shareholder value while addressing climate, environmental and social concerns” says Govindsamy.

These calls for change are not new, as the CER and our local community partner, the Vaal Environmental Justice Alliance (VEJA), have participated in AMSA’s AGM for several years. However, the momentum around green steel production and the new technologies which are now available, is making it financially risky for the company to continue with business as usual. AMSA with its access to high quality iron ore and other mineral resources, availability of renewable energy sources and strategic positioning, is poised to lead the decarbonization of steel in Africa. But in order to help drive this necessary change, the ArcelorMittal Group, a 68% shareholder of AMSA, now needs to step in. It is important for the Group to provide the capital necessary for AMSA to implement these plans locally, bearing in mind that the Group will benefit from having access to green primary iron, which could be used in steel plants in Europe and elsewhere, contributing to  decarbonisation efforts, globally.

“It is no longer a matter of whether the technology is available but rather whether the ArcelorMittal Group will step up and provide the necessary funds to its subsidiaries in the Global South, instead of spending billions in share buybacks programs and dividend payments” says Armando Ayala-Robles, the CER’s Climate Finance and Sustainability Senior Researcher. “As carbon taxes, emission regulations, and legal risks continue to rise, soon, it may become more expensive for AMSA to continue business as usual than for the steelmaker to ramp up its sustainable practices and implement the necessary changes to move away from carbon” says Ayala-Robles.

In addressing issues of decarbonisation, we should not lose sight of how local communities living close to iron ore mines and steel plants have sacrificed their health and well-being, their land and even their lives for the making of steel. In recognition of these losses, the Fair Steel Coalition’s first report, “the Real Cost of Steel,” highlights the impact of mining and steelmaking in local communities in South Africa, Liberia, Mexico and Brazil, and calls for the ArcelorMittal Group to held accountable.

Civil society has long been calling for real and meaningful change from AMSA – in relation to the pollution of air, water, and soil, as well as to speed up decarbonisation efforts. Through the work of the Fair Steel Coalition, it is evident that there are systemic issues within the ArcelorMittal Group, while at the same time, the Group is not short of the finance necessary to resolve these issues while ensuring that subsidiaries are able to make steel in a fair and sustainable manner. The CER will be at AMSA’s 2024 AGM on 24 May, together with VEJA members, to engage with AMSA on its role in seeking the support and technology necessary for it to become a world leader in green iron and steelmaking.

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Contact and Spokespeople:  Leanne Govindsamy [email protected] (Tel.0767158270) & Armando Ayala-Robles [email protected]

More about the CER’s report,ArcelorMittal and the Responsibility of Stakeholders in the Steel Value Chain: The report is based on the findings of an investor chain analysis and underscores the risks and opportunities faced by ArcelorMittal South Africa and its stakeholders as global pressure to decarbonize the steel industry grows. Stakeholders across the steel value chain, including banks, steel distributors, and car manufacturers, must leverage their influence to accelerate the decarbonization of steel. AMSA, as well as its key stakeholders identified in the report, were contacted to provide comments on the draft report and to answer specific questions in relation to the report. At the time of the report’s publication, only AMSA and three out of ten identified stakeholders had responded. All responses and an updated version of the report will be made available once all replies have been obtained.

The Fair Steel Coalition is a global alliance of more than fifteen NGOs from around the world that are working towards ensuring fair and sustainable steelmaking for people and the planet. The CER is one of the founding members of the Coalition and has participated in local pollution mapping which informed the Coalition’s recent report, entitled “The Real Cost of Steel.”

The Vaal Environmental Justice Alliance (VEJA) is a non-profit voluntary association that advocates for environmental justice in South Africa. VEJA has a particular focus on air quality, waste, water pollution and climate change in the Vaal Triangle, South of Johannesburg, known for being one of the most polluted areas in South Africa.

The Centre for Environmental Rights is a non-profit organisation of activist lawyers who defend the right of communities and civil society organisations in South Africa to an environment not harmful to health or well-being for present and future generations, by advocating and litigating for environmental justice.