CashNews.co
KUALA LUMPUR (Sept 20): The Ministry of Investment, Trade and Industry (Miti) will be focusing on addressing the financial and ecological sustainability of the Malaysian iron and steel industry, as it seeks to rechart the industry’s direction in line with the New Industrial Master Plan (NIMP) 2030, said its deputy minister Liew Chin Tong.
This comes more than a year after Miti implemented the two-year moratorium, beginning Aug 15, 2023, on the expansion and diversification of the country’s steel-making industry to allow for reassessments to address the challenges faced by the industry.
Liew said an independent committee for the local iron and steel industry, appointed by Miti minister Tengku Datuk Seri Zafrul Abdul Aziz in January, will present the full report of its findings on the industry within the next “several weeks”.
“Once the independent committee presents its report to the minister, the minister will base it on the report, to decide on the future of the moratorium,” he told reporters after witnessing the signing of a memorandum of understanding between Mycron Steel Bhd (KL:MYCRON) and Japanese steel manufacturer JFE Steel Corp, to drive the adoption of green steel solutions in Malaysia.
The moratorium in the steel-making industry covers all inquiries, assessments of current applications, new applications, licence transfers, expansions, regularisations and diversifications for manufacturing licences in the iron and steel industry.
It also involves a freeze in the issuance of certificates for exemption from manufacturing licence (ICA10) under the Industrial Coordination Act 1975 for manufacturing activities, including non-ferrous recycling activities.
“The two most important questions or terms of reference of the committee is to look at the twin sustainability of the Malaysian steel industry, that is to look at the financial sustainability and the ecological sustainability, and to look at them simultaneously. I think that is the main framing of questions for the committee,” Liew said.
The independent committee, chaired by HSBC Bank Malaysia chief executive officer Datuk Omar Siddiq, was tasked to review and provide proposals on the short, medium and long term roadmap for the entire value chain of the iron and steel industry in accordance with NIMP 2030, and provide a blueprint for the green transition of the steel industry.
It was also set up to provide guidance on how to expand the domestic steel industry to include higher value-added products, which are currently not being produced domestically, as well as to study and provide inputs on how to improve the current governance structure of the iron and steel sector in the country.
Liew stressed that the issue of overcapacity in the steel-manufacturing sector, is not just a Malaysian issue, but “at least an Asean issue, if not a global issue”.
“It has a lot to do with [the subdued] demand for steel in China, as well as the rapid increase in capacity in Southeast Asia, some of which came from investments from China,” he said.
“So we are hoping that we can [use] the report of the independent committee to initiate some constructive discussions with Asean countries.
“I understand that this is not easy, but we think that at some point we will have to deal with the question of rapid building up of capacity in Southeast Asia which eventually is not to anyone’s benefit,” Liew added.
According to the deputy minister, the capacity of steel production in Southeast Asia is expected to increase from 75.3 million tonnes in 2021 to 151.9 million tonnes in 2026 if all potential investments materialise.
Under its MOU with JFE Steel, Mycron Steel will integrate the Japanese company’s JGreeX green steel into its production process. JGreeX employs a mass-balance approach to reduce carbon dioxide emissions across the entire steel production chain, allocating the emission reductions to specific products.
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