Metals

Sector Fact Sheet

1. Sector Description
The metal industry consists of two major groups: ferrous metals and non-ferrous metals. Non-ferrous metals, which include aluminium, copper, zinc, lead, nickel and tin, are used to make alloys, castings, forgings, extrusions, wires, cables, pipes, and find their application in a number of sectors such as agriculture, infrastructure facilities like power plants, automobiles, railways, telecommunications, building and construction and in engineering and chemical plants. Ferrous metals primarily consist of iron and different varieties of steel.

2.

Overview

The world metals market stabilised in 2010 and 2011 following a steep decline in 2008 and 2009 due to the global financial crisis. Asia-Pacific represents the largest as well as fastest growing market for metals in the world. Europe represents the second largest market for metals in the world. Iron and steel commands the largest segment of the global metals market. They comprise more than half the metals industry in terms of volume, followed by aluminium. According to the World Steel Association, world crude steel production reached a record level of 1,527 million tons (Mt) in 2011, outperforming the 2010 record of 1,414 Mt, a 6.8% jump. China remains the largest steel-producing country in the world, accounting for roughly half of all global production at 46%, though its first quarter 2012 volumes were barely up from the year-earlier level. Japan, the second largest producer, posted a 4.1% decline. The United States is in third position, though its first quarter production was 9.2% higher year over year. South Africa's large, well-developed metals industry, with vast natural resources and a supportive infrastructure, represents roughly a third of all South Africa's manufacturing. It is comprised of basic iron ore and steel, basic non-ferrous metals and metal products. The iron and steel basic industries involve the manufacture of primary iron and steel products from smelting to semifinished stages. South Africa is the largest steel producer in Africa (almost 60% of Africa's total production). Primary steel products and semi-finished products include billets, blooms, slabs, forgings, reinforcing bars, railway track material, wire rod, seamless tubes and plates. The figure below shows South Africas production of steel for the period 2010 to 2014. SOUTH AFRICA'S PRODUCTION OF STEEL, 2010-2014 10000 9000 8000 Production 7000 6000 5000 4000 3000 2000 1000 0
Production ('000 tons) Growth Source: BMI International, 2012 2010 7617 1.78% 2011f 6712 -11.89% 2012f 7250 8.03% 2013f 8696 19.94% 2014f 9306 7.02%

25% 20% 15% % Growth 10% 5% 0% -5% -10% -15%

Africas working aluminium production capacity totals just under 1.75 million tonnes per annum (tpa) and is mostly located in Southern Africa, with South Africa representing 54% of capacity and Mozambique a further 32%. All the capacity in this region of Africa is operated by BHP Billitons subsidiaries.
ALUMINIUM SMELTERS IN AFRICA, 2012 COUNTRY South Africa Mozambique Egypt South Africa Ghana Nigeria Cameroon LOCATION Richards Bay, KwaZulu Natal Maputo Nag Hammadi Richards Bay, KwaZulu Natal Tema Ikot Abasi, Akwa Ibom Edea SMELTER NAME Hillside Aluminium Mozambique Aluminium (Mozal) Aluminium Company of Egypt Bayside Aluminium Volta Aluminium Co Aluminium Smelter Company of Nigeria Compagine Camerounaise de Al CAPACITY, '000 TONNES 700 530 245 210 200 193 96

Source: BMI International, 2012

3.
3.1

Trade
Global Trade of base Metals & Articles of Base Metals

The figure below shows global exports of base metals and articles of base metal for the period 2001 to 2011. Global exports of base metals and articles of base metal increased from 2003 to 2008, before decreasing in 2009 by 35%, thereafter strong growth of 14% was recorded in 2010 and 16% in 2011. GLOBAL EXPORTS OF BASE METALS & ARTICLES OF BASE METAL, 2001-2011 12 000

10 000 Value (ZARbn)

8 000

6 000

4 000

2 000

0
Value (ZARbn) Source: Trade Map, 2012

2 001 3 177

2 002 4 137

2 003 3 554

2 004 4 217

2 005 4 821

2 006 6 511

2 007 8 535

2 008 10 957

2 009 7 166

2 010 8 215

2 011 9 564

The table below shows the global trade markets for base metals and articles of base metal products in 2011. China is the largest source market for base metals and articles of base metal in 2011, valued at ZAR1trn. Germany and the United States rank second and third valued at ZAR925.6bn and ZAR585bn respectively. The United States is the largest destination market for base metals and articles of base metal in 2011, valued at ZAR856bn. China and Germany were ranked second and third valued at ZAR855bn and ZAR839bn respectively.

GLOBAL EXPORT MARKETS OF BASE METALS & ARTICLES OF BASE METAL, 2011 VALUE % RANK SOURCE MARKET 2011 GROWTH (ZARbn) 2010-2011 1 2 3 4 5 6 7 8 9 10 China Germany United States Japan Italy Republic of Korea Netherlands France Russian Belgium 1 042.1 925.6 585.0 552.6 401.8 373.0 373.0 335.4 309.5 302.9 9 563.6 29.04% 17.31% 19.31% 7.64% 20.34% 27.54% 15.67% 14.24% 7.57% 19.38% 16.42%

GLOBAL IMPORT MARKETS OF BASE METALS & ARTICLES OF BASE METAL, 2011 VALUE % RANK DESTINATION MARKET 2011 GROWTH (ZARbn) 2010-2011 1 2 3 4 5 6 7 8 9 10 United States China Germany Republic of Korea Italy France Netherlands Japan Belgium UK 855.6 854.6 839.2 396.0 395.6 379.0 348.5 292.7 270.6 242.4 9 661.3 19.19% 13.77% 23.23% 14.78% 22.15% 19.07% 19.89% 21.89% 23.29% 17.76% 16.49%

TOTAL EXPORTS

TOTAL IMPORTS

Source: Trade Map, 2012

3.2

South Africas Trade of Base Metals & Articles of Base Metals

South Africas global trade of base metals and articles of base metal has been volatile however South Africa has maintained a positive trade balance. South Africas exports of base metals and articles of base metal were valued at ZAR95.2bn in 2011 compared to ZAR92.5bn in 2010, increasing by 3%. Imports of base metals and articles of base metal were valued at ZAR34.9bn in 2011 compared to ZAR27.5bn in 2010, increasing by 119%. SOUTH AFRICAN TRADE OF BASE METALS & ARTICLES OF BASE METAL, 2001-2011 140 000 120 000

Value (ZARm)

100 000 80 000 60 000 40 000 20 000 0

2001 31 112 8 218 22 894 2002 41 997 11 490 30 507 2003 43 685 10 819 32 866 2004 57 151 12 912 44 239 2005 58 765 14 735 44 030 2006 67 365 22 822 44 542 2007 87 894 29 566 58 328 2008 116 034 36 049 79 985 2009 76 960 23 511 53 448 2010 92 543 27 509 65 034 2011 95 171 34 874 60 297

Exports (ZARm) Imports (ZARm) Trade balance

Source: Quantec, 2012 The table below shows South Africas traded products of base metals and articles of base metal for the 2011 period. Ferroalloys were South Africas largest export in 2011, valued at ZAR34.2bn. Unwrought aluminium and hot-rolled products of iron/steel were ranked second and third valued ZAR10bn and ZAR5.4bn respectively. Other top traded products were rolled stainless steel sheet (ZAR5.4bn); ferrous waste or scrap, ingots or iron or steel (ZAR4.7bn); aluminium plates, sheets and strip (ZAR4.5bn) and copper, copper alloy, waste or scrap (ZAR4.3bn). Flat-rolled iron/steel was South Africas largest import of base metals and articles of base metal in 2011, valued at ZAR1.7bn. Screws, bolts, nuts, rivets, washers and articles of iron or steel were ranked second and third valued at ZAR1.5bn and ZAR1.4bn respectively. Other top imports were iron/steel hot-rolled products (ZAR1.4bn); flat-rolled alloy steel (ZAR1.3bn); copper wire (ZAR1.2bn) and interchangeable tools and dies for hand or power tools (ZAR1.2bn). 3

SOUTH AFRICAN EXPORTS OF BASE METALS & ARTICLES OF BASE METAL, 2011 VALUE % RANK PRODUCT 2011 GROWTH (ZARm) 2010-2011 1 2 3 4 5 6 7 8 9 10 H7202: Ferro-alloys H7601: Unwrought aluminium H7208: Hot-rolled products, iron/steel, width>600mm, not clad H7219: Rolled stainless steel sheet, width > 600mm H7204: Ferrous waste or scrap, ingots or iron or steel H7606: Aluminium plates, sheets and strip, thickness > 0.2 mm H7404: Copper, copper alloy, waste or scrap H7308: Structures, parts of structures of iron or steel, H7201: Pig iron and spiegeleisen in primary forms H7210: Flat-rolled iron/steel, >600mm, clad, plated or coated 34 201.5 10 025.3 5 440.2 5 408.3 4 743.7 4 454.2 4 294.8 2 812.0 2 374.5 1 879.0 95 170.7 -0.9% 9.4% 24.2% -3.7% 44.0% 9.4% 31.8% -0.4% 15.0% -3.3% 2.8%

SOUTH AFRICAN IMPORTS OF BASE METALS & ARTICLES OF BASE METAL, 2011 VALUE % RANK PRODUCT 2011 GROWTH (ZARm) 2010-2011 H7210: Flat-rolled iron/steel, >600mm, 1 1 665.6 -9.24% clad, plated or coated H7318: Screws, bolts, nuts, rivets, 2 1 470.8 23.56% washers, iron, steel 3 4 5 6 7 8 9 10 H7326: Articles of iron or steel H7208: Hot-rolled products, iron/steel, width>600mm, not clad H7225: Flat-rolled alloy steel, width >600mm H7408: Copper wire H8207: Interchangeable tools and dies for hand or power tools H7403: Refined copper and copper alloys, unwrought H7307: Pipe fittings, of iron or steel H7601: Unwrought aluminium 1 423.3 1 366.4 1 267.4 1 237.5 1 236.0 1 155.9 1 018.7 861.7 34 873.9 28.87% 109.72% 7.82% -22.92% 29.91% 156.14% 41.94% 26.00% 26.77%

TOTAL METAL EXPORTS

TOTAL METAL IMPORTS

Source: Quantec, 2012 The table below shows South Africas trading partners for base metals and articles of base metal products in 2011. China is South Africas largest market for base metals and articles of base metal in 2011, valued at ZAR11.6bn. The United States and Japan rank second and third valued at ZAR9bn and ZAR7.3bn respectively. China was also the largest destination market for base metals and articles of base metal in 2011, valued at ZAR8.3bn. Germany and India were ranked second and third valued at ZAR3.8bn and ZAR2.1bn respectively.
SOUTH AFRICAN DESTINATION MARKETS OF BASE METALS AND ARTICLES OF BASE METALS, 2011 VALUE % RANK DESTINATION MARKETS 2011 GROWTH (ZARm) 2010-2011 1 2 3 4 5 6 7 8 9 10 China United States Japan Republic of Korea Netherlands Germany India Taiwan Italy Belgium 11 627.1 9 030.6 7 269.2 6 712.5 4 122.7 3 997.5 3 740.7 3 640.2 3 359.0 2 867.3 95 170.7 20.71% 9.00% -7.99% -4.19% 4.17% -16.62% 43.63% -8.66% -16.76% 3.07% 19.2% SOUTH AFRICAN SOURCE MARKETS OF BASE METALS AND ARTICLES OF BASE METALS, 2011 VALUE % RANK SOURCE MARKETS 2011 GROWTH (ZARm) 2010-2011 1 2 3 4 5 6 7 8 9 10 China Germany India Zambia United States Taiwan Italy Japan Sweden France 8 316.8 3 790.2 2 059.9 1 949.9 1 375.2 1 132.8 1 109.0 1 025.0 974.8 971.7 34 873.9 36.56% 11.88% 45.47% 51.06% 13.74% 15.58% 17.27% 24.35% 12.53% 15.59% 26.77%

TOTAL EXPORTS Source: Quantec, 2012

TOTAL IMPORTS

3.3

Western Cape Trade of Base Metals & Articles of Base Metals

The Western Capes exports of base metals and articles of base metal were valued at ZAR3.4bn in 2011 compared to ZAR3.9bn in 2010, decreasing by 13%, while imports of base metals and articles of base metal were valued at ZAR2.9bn in 2011 compared to ZAR2.4bn in 2010, increasing by 21%. WESTERN CAPE TRADE OF BASE METALS & ARTCILES OF BASE METALS, 2001-2011 7 000 6 000 Value (ZARm) 5 000 4 000 3 000 2 000 1 000 0
Exports (ZARm) Imports (ZARm) Trade balance Source: Quantec, 2012 2001 1 325 905 420 2002 1 815 1 176 639 2003 2 261 989 1 273 2004 2 574 1 326 1 248 2005 2 558 1 733 825 2006 3 008 2 218 790 2007 4 268 2 586 1 682 2008 5 924 2 923 3 001 2009 3 611 2 326 1 285 2010 3 919 2 395 1 524 2011 3 433 2 852 581

Copper, copper alloy, waste or scrap was the Western Capes largest export of base metals and articles of base metal in 2011, valued at ZAR857m. Flat-rolled iron/steel and ferrous waste or scrap, ingots or iron or steel were ranked second and third valued ZAR667m and ZAR215m respectively. Flat-rolled iron/steel was the Western Capes largest import of base metals and articles of base metal in 2011, valued at ZAR216m. Rolled stainless steel sheets (ZAR162m) and table, kitchen, household items of iron or steel (ZAR136m) were ranked second and third respectively.
WESTERN CAPE EXPORTS OF BASE METALS & ARTICLES OF BASE WESTERN CAPE IMPORTS OF BASE METALS & ARTICLES OF BASE METALS, 2011 METALS, 2011 VALUE % VALUE % RANK PRODUCT 2011 GROWTH RANK PRODUCT 2011 GROWTH (ZARm) 2010-2011 (ZARm) 2010-2011 H7404: Copper, copper alloy, waste or H7210: Flat-rolled iron/steel, >600mm, 1 854.2 26.00% 1 216.3 131.90% scrap clad, plated or coated H7210: Flat-rolled iron/steel, >600mm, clad, H7219: Rolled stainless steel sheet, width > 2 754.5 -20.17% 2 162.4 44.38% plated or coated 600mm H7204: Ferrous waste or scrap, ingots or H7323: Table, kitchen, household items of 3 666.7 1.69% 3 160.3 14.45% iron or steel iron or steel H7207: Semi-finished products of iron or H8309: Stoppers, caps, lids, crown corks, of 4 215.4 -46.93% 4 136.0 16.44% non-alloy steel base metal H7209: Flat-rolled iron/steel, >600mm, not H7318: Screws, bolts, nuts, rivets, washers, 5 192.2 -52.09% 5 135.5 24.95% clad, plated, iron, steel 6 7 8 9 10 H7602: Aluminium waste or scrap H7308: Structures, parts of structures of iron or steel H7326: Articles of iron or steel H8207: Interchangeable tools and dies for hand or power tools H7307: Pipe fittings, of iron or steel 151.7 120.5 39.9 27.9 21.0 3 432.7 14.83% -5.05% -13.84% 182.80% 143.60% 6 7 8 9 10 H7326: Articles of iron or steel H8301: Padlocks, locks, clasps with locks, keys H8302: Base metal fittings for furniture, doors, cars H7308: Structures, parts of structures of iron or steel H7604: Aluminium bars, rods and profiles 132.8 125.2 121.0 100.3 84.6 2 852.2 53.18% -0.87% 6.34% 71.77% 16.80% 19.10%

TOTAL EXPORTS

-12.40% TOTAL IMPORTS

Source: Quantec, 2012

China is the Western Capes largest source market for base metals and articles of base metal in 2011, valued at ZAR4230m. The Republic of Korea and Taiwan rank second and third valued at ZAR314m and ZAR230m respectively. Other top export markets were the Indonesia (ZAR204m); Vietnam (ZAR194m) and India (ZAR190m).
WESTERN CAPE DESTINATION MARKETS OF BASE METALS & ARTICLES OF BASE METALS, 2011 VALUE % % RANK DESTINATION MARKETS 2011 GROWTH SHARE (ZARm) 2010-2011 1 2 3 4 5 6 7 8 9 10 China Republic of Korea United States Taiwan Indonesia Vietnam India Brazil Belgium Zambia 473.5 313.9 230.4 206.6 203.7 194.0 190.3 173.5 154.8 142.4 3 432.7 29.41% 27.98% -10.54% -13.94% 137.33% -38.01% 31.74% -30.39% 10.45% 17.74% -12.40% 13.79% 9.14% 6.71% 6.02% 5.94% 5.65% 5.54% 5.05% 4.51% 4.15% 100%

TOTAL EXPORTS Source: Quantec, 2012

China is the Western Capes largest destination market for base metals and articles of base metal in 2011, valued at ZAR945m. Germany and Italy rank second and third valued at ZAR256m and ZAR170m respectively. Other top export markets are France (ZAR130m); India (ZAR124m) and Sweden (ZAR122m).
WESTERN CAPE SOURCE MARKETS OF BASE METALS & ARTICLES OF BASE METALS, 2011 VALUE % % RANK SOURCE MARKETS 2011 GROWTH SHARE (ZARm) 2010-2011 1 2 3 4 5 6 7 8 9 10 China Germany Italy France India Sweden United Kingdom United States Australia Finland 944.7 256.0 169.8 130.2 123.9 121.6 116.5 100.7 97.9 86.1 2 852.2 2.04% 31.02% 7.56% 21.46% 46.32% 27.61% 11.18% 15.35% 868.95% 83.92% 19.10% 33.12% 8.97% 5.95% 4.56% 4.34% 4.26% 4.08% 3.53% 3.43% 3.02% 100%

TOTAL IMPORTS Source: Quantec, 2012

4.
4.1

Investment
Global FDI

Total global FDI into the metals sector from 2003 to 2011 was valued at ZAR6.9trn, with a total of 4764 investment projects. Global FDI into the metals sector in terms of CAPEX was valued at ZAR856bn compared to ZAR822bn in 2010 increasing by 4.2%, while global FDI in terms of projects was estimated at 664 projects in 2011 compared to 552 projects in 2010, increasing by 20.3%.

GLOBAL METAL SECTOR FDI BY CAPEX & PROJECTS, 2003-2011 1 400 000 1 200 000 1 000 000 Value (ZARm) 800 000 600 000 400 000 200 000 0
CAPEX (ZARm) Projects Source: FDI Intelligence, 2012 2003 657 014 455 2004 510 610 396 2005 777 001 562 2006 610 530 474 2007 932 355 562 2008 1 155 391 686 2009 555 889 413 2010 822 110 552 2 011 856 049 664

800 700 600 Number of Projects 500 400 300 200 100 0

Steel products were the largest receiver of global FDI by projects, with a total of 1,181 investment projects from 2003 to 2011. Other fabricated metal products and gold ore and silver ore mining were ranked second and third with 690 projects and 616 projects respectively. Steel products was also the largest receiver of FDI in terms CAPEX valued at ZAR1.6m, followed by alumina and aluminium production and processing and copper, nickel, lead, and zinc mining valued at ZAR1.3m and ZAR915,170 respectively.
GLOBAL FDI INTO THE METALS SUBSECTORS, 2003-2011 RANK 1 2 4 3 5 6 8 7 9 10 11 12 14 13 15 16 17 18 19 20 TOTAL Source: FDI Intelligence, 2012 Steel products Other fabricated metal products Gold ore & silver ore mining Alumina & aluminium production and processing Copper, nickel, lead, & zinc mining Nonferrous metal production & processing Iron & steel mills & ferroalloy Architectural & structured metals Machine shops, turned products, screws, nuts & bolts Iron ore mining Other metal ore mining Spring & wire products Forging & stamping Coating, engraving, heat treating, & allied activities Foundries Other (Metals) Hardware Support Activities for Mining Other non-metallic mineral products Non-metallic mineral mining & quarrying METAL SUB-SECTORS PROJECTS 1 181 690 616 608 272 266 220 210 196 109 107 79 55 53 47 26 16 10 2 1 4 764 % PROJECTS 24.79% 14.48% 12.93% 12.76% 5.71% 5.58% 4.62% 4.41% 4.11% 2.29% 2.25% 1.66% 1.15% 1.11% 0.99% 0.55% 0.34% 0.21% 0.04% 0.02% 100% CAPEX (ZARm) 1 625 479 260 578 857 441 1 300 513 915 170 312 833 662 844 49 348 94 429 498 715 127 350 48 466 27 819 16 351 43 033 9 419 2 455 24 507 188 12 6 876 949 % CAPEX (ZARm) 23.64% 3.79% 12.47% 18.91% 13.31% 4.55% 9.64% 0.72% 1.37% 7.25% 1.85% 0.70% 0.40% 0.24% 0.63% 0.14% 0.04% 0.36% 0.00% 0.00% 100% COMPANIES 873 588 525 412 229 242 205 168 145 88 93 69 50 51 46 25 15 10 1 1 3 623 % COMPANIES 24.10% 16.23% 14.49% 11.37% 6.32% 6.68% 5.66% 4.64% 4.00% 2.43% 2.57% 1.90% 1.38% 1.41% 1.27% 0.69% 0.41% 0.28% 0.03% 0.03% 100%

The United States was the largest source market, in terms of projects, for FDI into the global metals sector for the period 2003 to 2011, with a total of 735 investment projects. Canada and Japan were ranked second and third with a total of 593 projects and 431 projects respectively.
SOURCE MARKETS FOR THE GLOBAL METALS SECTOR, 2003-2011 RANK 1 2 3 4 5 6 7 8 9 10 TOTAL Source: FDI Intelligence, 2012 SOURCE MARKETS United States Canada Japan United Kingdom Germany Australia China Luxembourg India South Korea PROJECTS 735 593 431 353 304 221 181 147 139 119 4 764 % PROJECTS 15.43% 12.45% 9.05% 7.41% 6.38% 4.64% 3.80% 3.09% 2.92% 2.50% 100% CAPEX (ZARm) 666 386 806 784 449 283 872 164 266 218 383 242 533 264 344 782 329 883 358 995 6 876 950 % CAPEX (ZARm) 9.69% 11.73% 6.53% 12.68% 3.87% 5.57% 7.75% 5.01% 4.80% 5.22% 100% COMPANIES 574 484 341 254 265 176 142 58 92 65 3 623 % COMPANIES 15.84% 13.36% 9.41% 7.01% 7.31% 4.86% 3.92% 1.60% 2.54% 1.79% 100%

The United States was the largest destination market, in terms of projects, for FDI into the metals sector for the period 2003 to 2011, with a total of 611 investment projects. China and India were ranked second and third with a total of 223 projects and 183 projects respectively.
DESTINATION MARKETS FOR THE GLOBAL METALS SECTOR, 2003-2011 RANK 1 2 3 4 5 6 7 8 9 10 TOTAL Source: FDI Intelligence, 2012 DESTINATION MARKETS United States China India Brazil Mexico Russia Vietnam Germany France Poland PROJECTS 611 515 223 183 177 144 123 122 121 118 4 765 % PROJECTS 12.82% 10.81% 4.68% 3.84% 3.71% 3.02% 2.58% 2.56% 2.54% 2.48% 100% CAPEX (ZARm) 290 072 245 661 735 469 986 433 113 889 124 235 287 507 18 046 39 593 30 026 6 876 950 % CAPEX (ZARm) 4.22% 3.57% 10.69% 14.34% 1.66% 1.81% 4.18% 0.26% 0.58% 0.44% 100% COMPANIES 548 441 179 161 163 122 115 118 106 108 4 311 % COMPANIES 12.71% 10.23% 4.15% 3.73% 3.78% 2.83% 2.67% 2.74% 2.46% 2.51% 100%

4.2

South African FDI

4.2.1 South African Outward FDI

The figure below shows South Africas FDI into the global metals sector in terms of CAPEX and projects for the period 2003 to 2011. South Africas FDI into the global metals sector from 2003 to 2011 was valued at ZAR67bn, with a total of 34 investment projects. South Africas FDI into the metals sector in terms of CAPEX was valued at ZAR37.7bn in 2011 compared to ZAR9.1bn in 2010 increasing by 314%, while FDI in terms of projects was estimated at 8 projects in 2011 compared to 3 projects in 2010, increasing by 167%.

SOUTH AFRICA'S FDI INTO THE GLOBAL METAL SECTOR BY CAPEX & PROJECTS, 2003-2011 40 000 35 000 30 000 Value (ZARm) 25 000 20 000 15 000 10 000 5 000 0
CAPEX (ZARm) Projects Source: FDI Intelligence, 2012 2003 3 682 3 2004 2 208 1 2005 4 787 5 2006 5 319 4 2007 791 2 2008 1 771 4 2009 367 4 2010 9 094 3 2011 37 684 8

9 8 7 6 5 4 3 2 1 0 Number of Projects

The table below shows inward FDI into South Africas metal industry subsectors for the period 2003 to 2011. Other metal ore mining was South Africas largest receiver of global FDI by projects, with a total of 14 investment projects from 2003 to 201 1. Nonferrous metal production and processing, and gold ore and silver ore mining were ranked second and third with 6 projects investment projects each. South Africas other metal ore mining was also the largest receiver of FDI in terms of CAPEX valued at ZAR21.3bn, followed by nonferrous metal production and processing (ZAR20.2bn) and iron and steel mills and ferroalloy steel products (ZAR15.8bn).
GLOBAL INWARD FDI INTO SOUTH AFRICAS METALS SECTOR, 2003-2011 RANK 1 2 3 4 5 6 7 8 9 10 11 12 13 TOTAL Source: FDI Intelligence, 2012 SUBSECTORS Other metal ore mining Nonferrous metal production & processing Gold ore & silver ore mining Iron & steel mills & ferroalloy Steel products Copper, nickel, lead, & zinc mining Iron ore mining Other fabricated metal products Foundries Alumina & aluminium production and processing Coating, engraving, heat treating, & allied activities Other (Metals) Support Activities for Mining PROJECTS 14 7 6 6 5 4 4 4 3 1 1 1 1 57 % PROJECTS 24.56% 12.28% 10.53% 10.53% 8.77% 7.02% 7.02% 7.02% 5.26% 1.75% 1.75% 1.75% 1.75% 100% CAPEX (ZARm) 21 298.2 20 219.1 11 210.4 15 849.4 5 421.9 4 276.5 14 159.3 1 849.6 3 355.8 17.1 34.3 1 798.4 1 798.4 101 288.4 % CAPEX (ZARm) 21.03% 19.96% 11.07% 15.65% 5.35% 4.22% 13.98% 1.83% 3.31% 0.02% 0.03% 1.78% 1.78% 100% COMPANIES 12 7 6 6 5 4 4 4 3 1 1 1 1 54 % COMPANIES 22.22% 12.96% 11.11% 11.11% 9.26% 7.41% 7.41% 7.41% 5.56% 1.85% 1.85% 1.85% 1.85% 100%

The table below shows South Africas top 10 global FDI destination markets for the global metals sector for the period 2003 to 2011. Ghana was the largest destination market, in terms of projects, for FDI into the metals sector for the period 2003 to 2011, with a total of 6 investment projects. Brazil and the United States were ranked second and third with a total of 5 projects and 4 projects respectively.

SOUTH AFRICAS DESTINATION MARKETS FOR FDI INTO THE METALS SECTOR, 2003-2011 RANK 1 2 3 4 5 6 7 8 9 10 TOTAL DESTINATION MARKETS Ghana Brazil United States Zambia Zimbabwe DRC Australia Russia Chile United Kingdom PROJECTS 6 5 4 3 3 1 2 1 1 1 34 % PROJECTS 17.65% 14.71% 11.76% 8.82% 8.82% 2.94% 5.88% 2.94% 2.94% 2.94% 100% CAPEX (ZARm) 3 971 10 470 202 2 732 5 680 3 817 6 682 451 17 191 65 703 % CAPEX (ZARm) 6.04% 15.94% 0.31% 4.16% 8.65% 5.81% 10.17% 0.69% 0.03% 0.29% 100% COMPANIES 4 2 4 3 3 1 2 1 1 1 29 % COMPANIES 13.79% 6.90% 13.79% 10.34% 10.34% 3.45% 6.90% 3.45% 3.45% 3.45% 100%

Source: FDI Intelligence, 2012

4.2.2 South African Inward FDI

The figure below shows global FDI into South Africas metals sector in terms of CAPEX and projects for the period 2003 to 2011. Global FDI into South Africas metals sector from 2003 to 2011 was valued at ZAR101bn, with a total of 57 investment projects. FDI into South Africas metals sector in terms of CAPEX was valued at ZAR8bn in 2011 compared to ZAR12bn in 2010 decreasing by 33%, while FDI in terms of projects was estimated at 2 projects in 2011 compared to 5 projects in 2010, decreasing by 60%. GLOBAL FDI INTO SOUTH AFRICA'S METALS SECTOR, 2003-2011 25 000 20 000 Value (ZARm) 15 000 10 000 5 000 0
CAPEX (ZARm) Projects Source: FDI Intelligence, 2012

14 12 10 8 6 4 2
2003 10 497 7 2004 3 936 3 2005 8 343 6 2006 21 762 8 2007 6 042 4 2008 18 919 13 2009 12 138 9 2010 11 516 5 2011 8 136 2

Number of Projects

The table below shows the top 10 source markets for FDI into South Africas metals sector for the period 2003 to 2011. The United Kingdom was the largest source market, in terms of projects, for FDI into South Africas metals sector for the period 2003 to 2011, with a total of 15 investment projects. Australia and Canada were ranked second and third with a total of 13 projects and 6 projects respectively. Other top source markets were the Switzerland (4 projects); China (3 projects) and Luxembourg (3 projects).

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SOUTH AFRICAS SOURCE MARKETS FOR FDI INTO THE METALS SECTOR, 2003-2011 RANK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 TOTAL Source: FDI Intelligence, 2012 SOURCE COUNTRY United Kingdom Australia Canada Switzerland China Luxembourg Russia Germany India United States Austria Japan Netherlands Spain PROJECTS 15 13 6 4 3 3 3 2 2 2 1 1 1 1 57 % PROJECTS 26.32% 22.81% 10.53% 7.02% 5.26% 5.26% 5.26% 3.51% 3.51% 3.51% 1.75% 1.75% 1.75% 1.75% 100% CAPEX (ZARm) 34 828.1 19 656.6 7 880.6 9 324.2 5 388.0 3 838.3 10 257.2 1 815.5 2 551.1 1 815.5 92.9 1 798.4 243.6 1 798.4 101 288.4 % CAPEX (ZARm) 34.39% 19.41% 7.78% 9.21% 5.32% 3.79% 10.13% 1.79% 2.52% 1.79% 0.09% 1.78% 0.24% 1.78% 100% COMPANIES 15 11 6 4 3 2 3 2 2 2 1 1 1 1 54 % COMPANIES 27.78% 20.37% 11.11% 7.41% 5.56% 3.70% 5.56% 3.70% 3.70% 3.70% 1.85% 1.85% 1.85% 1.85% 100%

4.3

Western Cape FDI

The table below shows inward FDI into the Western Capes metals sector for the period 2003 to 2011. The Western Cape received two investment projects from Pipe Metallurgical Company from Russia and Arcelor Mittal from South Africa valued at ZAR17m and ZAR9.6m respectively.
INWARD FDI INTIO THE WESTERN CAPES METAL SECTOR, 2003-2011 DATE Jun 2010 Dec 2008 TOTAL Source: FDI Intelligence, 2012 INVESTING COMPANY Pipe Metallurgical Company (TMK) ArcelorMittal South Africa SOURCE COUNTRY Russia Luxembourg SUB-SECTOR Steel products Steel products INDUSTRY ACTIVITY Sales, Marketing & Support Education & Training VALUE (ZARm) 17.1 9.6 26.6 JOBS 9 4 13

The table below shows the Western Capes outward FDI into the metals sector for the period 2003 to 2011. Belmet Marine was the only company from the Western Cape investing into Namibias metals sector valued at ZAR1.6bn.
WESTERN CAPES GLOBAL OUTWARD FDI INTO THE METALS SECTOR, 2003-2011 DATE Apr 2010 INVESTING COMPANY Belmet Marine PARENT COMPANY Belmet Marine DESTINATION COUNTRY Namibia SUB-SECTOR Steel products VALUE (ZARm) 1,6 JOBS 413

Source: FDI Intelligence, 2012

5.

Companies Investing

The table below shows the top 20 global companies investing into South Africas metals sector for the period Jan 2003 to May 2012. There were a total of 162 companies investing into South Africas metals sector. The following table below shows the top 20 global companies investing into South Africas metals sector for the period 2003 to 2011. There were a total of 81 global companies investing into South Africas metals sector.

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TOP 20 GLOBAL COMPANIES INVESTING INTO SOUTH AFRICAS METALS SECTOR, JAN 2003-MAY 2012 DATE Mar 2012 Jan 2012 Jan 2012 Jan 2012 Jan 2012 Dec 2011 Aug 2011 Oct 2010 Aug 2010 Jun 2010 Jun 2010 May 2010 Dec 2009 Nov 2009 Oct 2009 Sep 2009 Aug 2009 Aug 2009 Jul 2009 Apr 2009 TOTAL Source: FDI Intelligence, 2012 TOP 20 SOUTH AFRICAN COMPANIES INVESTING INTO THE GLOBAL METALS SECTOR, JAN 2003MAY 2012 DATE Apr 2012 Sep 2011 Sep 2011 Sep 2011 Sep 2011 Jun 2011 Apr 2011 Apr 2011 Mar 2011 Nov 2010 Apr 2010 Mar 2010 Oct 2009 Oct 2009 Oct 2009 Sep 2009 Dec 2008 Jun 2008 May 2008 May 2008 TOTAL Source: FDI Intelligence, 2012 INVESTING COMPANY AngloGold Ashanti Equistock AngloGold Ashanti AngloGold Ashanti AngloGold Ashanti BSi Steel Harmony Gold Macsteel Service Centers USA Zimplats AngloGold Ashanti Belmet Marine TWP Investments Moolmans Cosira Group The Scoin Shop Tsozo Refinery Macsteel Service Centers USA Macsteel AngloGold Ashanti AngloGold Ashanti SOURCE STATE Gauteng Not Specified Gauteng Gauteng Gauteng KwaZulu-Natal Gauteng Gauteng Gauteng Gauteng Western Cape Gauteng Gauteng Gauteng Gauteng Not Specified Gauteng Gauteng Gauteng Gauteng DESTINATION COUNTRY Congo (DRC) Zambia Brazil Brazil Brazil Ghana Papua New Guinea United States Zimbabwe Australia Namibia Zimbabwe Zimbabwe Chile United Kingdom Mozambique United States UAE Ghana Ghana SUB-SECTOR Gold ore & silver ore mining Nonferrous metal production & processing Gold ore & silver ore mining Gold ore & silver ore mining Gold ore & silver ore mining Iron & steel mills & ferroalloy Gold ore & silver ore mining Other fabricated metal products Other metal ore mining Gold ore & silver ore mining Steel products Gold ore & silver ore mining Other metal ore mining Steel products Other (Metals) Gold ore & silver ore mining Steel products Steel products Gold ore & silver ore mining Gold ore & silver ore mining VALUE (ZARm) 3 695.1 48.7 3 065.1 3 065.1 3 065.1 17.1 24 358.0 5.7 4 059.7 5 886.5 1 603.6 1 603.6 17.1 17.1 190.8 142.1 30.0 222.6 1 055.5 462.8 69 398 JOBS 1543 47 451 451 451 9 3000 3 858 1027 413 413 9 9 165 137 15 148 223 98 19 590 INVESTING COMPANY Safal Steel Powerway Renewable Energy Powerway Renewable Energy Powerway Renewable Energy Powerway Renewable Energy Anglo American Kurvers Piping Xstrata PLC Xstrata-Merafe Wogen Resource Pipe Metallurgical Company (TMK) Gold One International A R Brown McFarlane & Co Aquarius Platinum Lonmin ASA Metals Platinum Australia Platinum Australia LN Metals International Ltd Tata Steel SOURCE COUNTRY Mauritius China China China China United Kingdom Germany Switzerland Switzerland United Kingdom Russia Australia United Kingdom Australia United Kingdom China Australia Australia United Kingdom India DESTINATION STATE KwaZulu-Natal Northern Cape Northern Cape Northern Cape Northern Cape Northern Cape Gauteng Mpumalanga North West Gauteng Western Cape Gauteng Gauteng Not Specified Gauteng Not Specified North West Limpopo Gauteng Gauteng Steel products Other fabricated metal products Other fabricated metal products Coating, engraving, heat treating, & allied activities Iron ore mining Other fabricated metal products Nonferrous metal production & processing Nonferrous metal production & processing Other fabricated metal products Steel products Gold ore & silver ore mining Steel products Other metal ore mining Other metal ore mining Iron & steel mills & ferroalloy Other metal ore mining Other metal ore mining Other fabricated metal products Iron ore mining SUB-SECTOR Coating, engraving, heat treating, & allied activities VALUE (ZARm) 1 057.1 0.2 47.1 0.2 0.2 8 119.3 17.1 5 639.7 1 110.7 17.1 17.1 4 731.1 1 798.4 284.6 78.8 1 798.4 2 120.8 2 120.8 17.1 2 120.8 102 393 JOBS 370 333 63 333 333 1 716 9 3 000 1 069 9 9 1 000 413 60 36 413 1 543 1 543 9 1 543 49 660

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