The Manufacturing Circle expresses its support for government in respect of its efforts to improve scrap metal supply to South African foundries. While we agree that 'n negotiated agreement between metal recyclers and the foundry industry may be preferable to export regulations, there are no indications that such negotiations are currently being pursued. We therefore remain supportive of the proposed regulations, subject to the necessary consultation with impacted industries.

We regret the proposed court action by the Metal Recyclers' Association to oppose the proposed export regulations, especially since the regulations provided for by the Department of Trade and Industry are less onerous than those of many competing economies and expressly seek to promote better supply of scrap metal local industries, rather than to shelter them from international competition.

Scrap metal is an important input in steel manufacturing to assist in keeping the cost of production down. We concur with government that that rapid increase in scrap metal exports has undermined local industry, with adverse consequences for economic growth and job creation. We believe the predatory posture of certain noncompliant scrap metal importers (who probably fall outside of the membership of credible organisations such as the MRA) has also contributed significantly to the theft of public goods such as steel road barriers and drain lids.

We believe the proposed regulations would particularly support foundries, which have found it hard to compete, both in the global and domestic market, due to lower demand and the proliferation of unfairly incentivised and illegal imports, particularly from China.This being said, the positive impact of any improvements in scrap metal supply is likely to be undermined by a range of other challenges that remain unaddressed, which include the rapid, bunched-up increases in administered prices over the few years, the security of electricity and water supply and a labour dispensation that does not promote industrial peace and incentivises attendance rather than productivity.