Johannesburg, Feb 24 (PTI) The South African government today lauded leading NRI billionaire Lakshmi Mittal’s steel unit in the country for its initiative to move products via rail instead of road transport.

ArcelorMittal South Africa’s (AMSA) initiative to remove cargo from the road network and transferring it to rail transport was in line with the government’s national economic development objectives, Minister of Trade and Industry Rob Davies said at the opening of AMSA’s Isando Distribution Centre near O R Tambo international airport here.

The centre was established to migrate AMSA’s final product steel dispatches from road to rail from its production facilities in Newcastle in KwaZulu-Natal province and Saldanha in the Western Cape province to its customers in the economic hub of Gauteng province.

“We welcome this project because it ticks a number of boxes in regard to the economic development objectives that government has set itself,” Davies said.

The government had identified the crucial role that transport and rail in particular plays in achieving the strategic objectives of competitive and sustainable industry development leading to job creation, poverty alleviation and positioning South Africa as the investment destination of choice in Africa, he said.

According to AMSA Chief Executive Officer Wim de Klerk, the establishment of the centre is the first stage in a long- term strategic initiative to migrate all domestic steel dispatches from road to rail.

The second stage of the initiative will entail the migration of steel dispatches into sub Saharan Africa from road to rail, through the establishment of distribution hubs in various locations in the region.

AMSA was born out of the ailing former state-owned steel manufacturer Iscor which Mittal first rescued almost two decades ago before he bought it out to become part of his global company.

After threats of closure and huge job losses in the past a few years amid the global downturn in the steel industry, and cheaper Chinese imports, government intervention has given AMSA a new lease of life.

This is published unedited from the PTI feed.