The Daily Insider: Notoriously unproductive ArcelorMittal’s lobbying pays off

Functional economies are like jousting tournaments of yore. The best participants size up competitors, seek out weaknesses and when the opportunity presents, act swiftly to extract maximum advantage. Then there’s those who operate in the shadows, using smooth arguments (and/or cold cash) to influence referees.

South Africa is infested with the latter. These “political influencers” whose success is determined by the way they get government to do their bidding, always focused on enhancing the profit of clients. In this regard, steel-maker ArcelorMittal appears to be in a class of its own.

The Indian-controlled company enjoyed a hugely successful past year, with the notoriously unproductive business’s successful lobbying on import duties and local steel pricing. That translated into a share price which multiplied tenfold – from R1 to R10, a five year high – easily the best performer of all JSE-listed stock.

While ArcelorMittal shareholders have celebrated an astonishing year, those who consume the company’s products are not. Something looks badly out of kilter here. Or is that just my suspicious mind?

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