Africa Automotive: Exploring Green Steel in South Africa - A Path to Sustainability

As global industries shift towards greener practices, South Africa is beginning to explore the potential of ‘green steel’—a low-carbon alternative to traditional steelmaking—with interest from both steel producers and automotive manufacturers. 

Image Supplied: ArcelorMittal

Green steel is produced using renewable energy and hydrogen instead of coal, significantly reducing carbon emissions. Given that steel production is a major contributor to global CO₂ emissions, the push for greener alternatives has gained momentum worldwide. In South Africa, where the steel and automotive sectors are key economic drivers, the transition could play a crucial role in maintaining competitiveness, especially as international markets impose stricter environmental regulations. 

Currently, no South African automakers are using green steel in large-scale production, but industry leaders are closely monitoring developments. Companies like Mercedes-Benz South Africa and BMW Group South Africa have committed to sustainability goals, including carbon-neutral manufacturing, which could eventually incorporate green steel. 

Image supplied: ArcelorMittal

On the production side, ArcelorMittal South Africa, the country’s largest steelmaker, has signalled interest in decarbonisation. The company has partnered with renewable energy providers and is exploring hydrogen-based steelmaking, though full-scale green steel production is not yet a reality. Similarly, South Africa’s Industrial Development Corporation (IDC) has highlighted green steel as a priority for future investment, aligning with global trends towards sustainable industrial processes. 

Experts suggest South Africa, with its abundant solar and wind resources, is well-positioned to produce green hydrogen, a key component in green steel manufacturing. However, high costs and infrastructure challenges remain barriers to rapid adoption. 

The transition to green steel is inevitable, but it will require significant investment and policy support but for South Africa to remain a player in global automotive and steel markets, it must accelerate its shift towards sustainable production methods.

While the local industry is still in the early stages, the global push for decarbonisation means green steel could soon become a critical factor in South Africa’s industrial future. For now, automakers and steel producers are watching closely, preparing for a greener transition. 

https://bit.ly/4odFyej

Testing Hino's 300 Series Hybrid Trucks: Fuel Efficiency and Emissions Reduction

Hino South Africa is broadening real-world testing of its innovative 300 Series Hybrid trucks, placing more vehicles with selected customers to rigorously assess performance and gauge local interest in new energy commercial vehicles. This expansion marks a significant step in understanding how hybrid technology fits into the South African transport landscape.

The hybrid system pairs a robust 4-litre Euro 6 turbo-diesel engine with an electric motor. This combination aims to significantly lower harmful emissions and deliver improved fuel economy compared to conventional diesel trucks. Unlike some hybrid passenger cars that reduce engine size, Hino retains the full-size diesel engine in the 300 Hybrid, prioritising long-term durability and reliability under demanding working conditions.

The electric motor is positioned between the clutch and gearbox, operating in parallel with the diesel engine. This setup provides power assistance, enhancing overall efficiency and reducing carbon dioxide output. Together, the diesel engine and electric motor generate 111 kW of power and 470 N.m of torque, with peak torque available from as low as 1 200 r/min. Power is delivered through a six-speed automated manual transmission (AMT), which drivers can manually override if needed.

These local trials build upon experience gained since 2023, when the first three Hino 300 Hybrids arrived in South Africa. These initial units have been successfully operating with Namlog Logistics from the Toyota Africa Parts Centre in Ekurhuleni, forming a key part of Toyota South Africa Motors' broader New Energy Vehicle (NEV) strategy.

This initiative reflects the long-standing commitment of Hino Motors in Japan to reduce emissions and fuel consumption, encompassing both manufacturing processes and vehicle operation. As part of its multi-pathway strategy towards carbon neutrality, Hino globally develops and tests diverse powertrain solutions, including compressed natural gas, hydrogen fuel cells, battery electric vehicles, and diesel-electric hybrids like the 300 Series.

"Itumeleng Segage, General Manager of Hino South Africa, emphasised the practical considerations driving the trials: “Finding the right balance between cost, operational range, payload capacity, maintenance requirements, and future resale value is essential. These factors determine which technology suits specific applications best. That’s precisely why we are running these local customer trials with several Hino 300 Hybrid trucks – to evaluate these critical measures under South African conditions."

Early indications from overseas markets are encouraging. In Australia, where Euro VI emission standards take effect later this year, the Hino 300 Hybrid is gaining traction. A recent 300 km test replicating urban delivery conditions around the Bathurst race circuit demonstrated notable fuel savings – approximately 24% for Wide Cab variants and 22% for Standard Cab models. Australian motor industry publication GoAuto reported similar results, achieving a 21.1% fuel saving in their independent test run.

The Hino 300 Hybrid retains the standard features expected in the 300 Series, including air conditioning, AM/FM radio, electric windows, dual airbags and daytime running lights, ensuring operator comfort and safety are not compromised.

Segage concluded, “We see considerable value in hybrid technology for many operations suited to the 300 Series, particularly urban delivery and city-to-city transport. We are keenly looking forward to the outcomes of these extended local trials and the direct feedback from the customers operating these trucks.” The results will be crucial in shaping Hino's strategy for introducing new energy vehicles to the South African market.

https://bit.ly/3GL5ddH

Africa's Mineral Leverage Amid US Trade Policies

Africa possesses substantial reserves of minerals critical to global industries, including the United States economy. During the Trump administration, Section 232 tariffs were imposed on steel and aluminium imports globally, impacting several African exporters such as South Africa. This raises the question: could African nations leverage their mineral exports to counter such US trade policies? A balanced analysis reveals significant complexity.

The Case for Potential Leverage:

- Criticality and Concentration: Minerals such as cobalt, platinum group metals (PGMs), and manganese are not only essential for advanced manufacturing (aerospace, defence, EVs, electronics) but also highly concentrated in specific African countries. The DRC dominates cobalt; South Africa dominates PGMs and chromite. This creates potential supply chokepoints.
- Limited Short-Term Substitutes: For many applications (eg, cobalt in specific battery chemistries, PGMs in catalysts), viable substitutes are either non-existent, significantly less efficient, or much more expensive in the near-to-medium term. Developing new sources takes years.
- Disruption Impact: Any significant disruption or deliberate restriction of these mineral flows could cause substantial price volatility and supply chain bottlenecks for US industries, potentially impacting economic growth and strategic sectors.

Significant Constraints on Leverage:

- Dispersed Interests: Africa is not a single actor. Mineral wealth is spread across numerous countries with differing political agendas, economic priorities, and relationships with the US. Achieving coordinated action across the continent on trade policy, especially targeting the US, is highly improbable. The African Continental Free Trade Area (AfCFTA) is nascent and focuses on intra-African trade.
- Mutual Dependence: Many African economies are heavily reliant on mineral export revenues. Restricting exports to the US (a major market) could inflict severe economic damage on the exporting countries themselves, potentially destabilising economies and governments. This creates a significant disincentive.
- US Mitigation Strategies: The US is acutely aware of these supply risks. Responses could include:
- Increased Domestic Production/Recycling: Incentivising mining within the US or allied nations (though challenging and slow).
- Stockpiling: Using the National Defense Stockpile.
- Allied Sourcing: Strengthening supply chains with friendly nations (e.g., Australia for some minerals).
- Technological Innovation: Accelerating research into alternative materials or battery chemistries (e.g., cobalt-free batteries).
- Financial/Political Pressure: Utilising tools like sanctions or leveraging international financial institutions.
- AGOA Factor: The African Growth and Opportunity Act (AGOA) grants many Sub-Saharan African countries preferential tariff access to the US market for non-mineral exports (textiles, agriculture, etc.). Threatening mineral exports could jeopardise these valuable benefits.
- Specificity of Tariffs: The Trump-era tariffs targeted specific products (steel, aluminium), not the raw minerals themselves. While tariffs hurt African aluminium exporters (like South Africa) processing bauxite, the primary bauxite producers (eg, Guinea) were less directly impacted. Leveraging unrelated minerals (like cobalt) against aluminium tariffs would be an indirect and legally/politically complex strategy.

A Balanced Perspective:

While Africa holds globally significant reserves of minerals critical to the US economy, the notion of the continent wielding this as a unified, effective bargaining chip against specific US tariffs like those imposed under Trump faces substantial hurdles.

The concentration of certain minerals provides theoretical leverage points. However, the fragmentation of African nations, their own deep economic dependence on mineral exports, the existence of mechanisms like AGOA, and the US's capacity to pursue mitigation strategies significantly weaken the practical ability to translate this mineral wealth into tangible trade concessions on unrelated tariffs.

Attempting aggressive leverage could easily backfire, harming African economies more than the US in the short-to-medium term, while accelerating US efforts to reduce dependence on African minerals in the long term – an outcome contrary to Africa's interests in sustained mineral revenue.

A More Pragmatic Path:

Rather than confrontation, the more viable strategy for African mineral-rich nations lies in:

- Value Addition: Processing minerals domestically before export (e.g., refining cobalt, manufacturing battery precursors) to capture more economic benefit and create jobs.
- Stable Investment Frameworks: Attracting responsible investment for exploration and mining through predictable, transparent regulations and reduced political risk.
- Strategic Partnerships: Negotiating mutually beneficial, long-term supply agreements with consumer nations and companies, potentially linked to infrastructure development or technology transfer, rather than reacting to specific tariffs.
- Intra-African Coordination (where possible): Collaborating on policies like environmental standards or local beneficiation goals to strengthen their collective position within global value chains.

Conclusion:

Africa's mineral wealth grants it inherent economic significance, particularly concerning specific critical minerals. However, translating this into leverage against US trade policies like the Trump tariffs is fraught with practical difficulties and significant risks for African economies. The path to maximising Africa's benefit from its resources more likely lies in internal development, value addition, and fostering stable, mutually beneficial partnerships, rather than in attempting short-term, high-stakes leverage that could undermine long-term economic stability and growth. The relationship remains one of complex interdependence, not one where Africa holds a simple, decisive upper hand.

https://bit.ly/46YDznQ

Unlocking Trade: Introducing the PAPSS African Currency Marketplace

The Pan-African Payment and Settlement System (PAPSS), working alongside African deep-tech firm Interstellar, unveiled the PAPSS African Currency Marketplace (PACM) during the recent Afreximbank Annual Meeting (AAM2025). This new Financial Market Infrastructure aims to tackle the persistent challenge of currency convertibility hindering trade within Africa.

For years, intra-African commerce has been hampered by the continent's 41 diverse currencies, varying regulations, and limited convertibility. Businesses frequently resorted to using external hard currencies like the US dollar for transactions between neighbouring nations. This practice, known as the "hard and costly currency bottleneck," is estimated to drain approximately R90 billion annually through fees, delays, and lost opportunities, impacting the competitiveness of African enterprises and slowing progress under the African Continental Free Trade Area (AfCFTA).

PAPSS CEO Mike Ogbalu III explained the new marketplace's function: "The PAPSS African Currency Marketplace is fully transparent, order book-driven, and operates with trusted counterparties, strictly adhering to local regulatory frameworks and global best practices. By creating a single, continent-wide liquidity pool, PACM serves as a key liquidity engine for intra-African commerce." 

Ogbalu noted that while PAPSS, operational since 2022, has enabled real-time payments across 17 countries, connecting over 150 banks and 14 national switches, the issue of limited currency convertibility remained. "We soon realised that solving for payments alone was not enough," he stated, highlighting problems like over R36 billion in airline revenues currently 'trapped' in certain African countries due to exchange restrictions.

The PACM, developed jointly by PAPSS and Interstellar, allows the direct exchange of African currencies without converting through hard currencies. Functioning as a transparent, peer-to-peer platform across Africa, it enables businesses to trade in local currencies in near real-time while complying with national rules. This approach aims to unlock liquidity, release trapped capital, reduce foreign exchange costs, and support financial sovereignty.

Interstellar's Founder and CEO, Ernest Mbenkum, emphasised the vision during the launch: "PACM was built from the ground up to serve Africa’s specific needs. PAPSS and Interstellar are co-architects of a new financial future... African currencies deserve a better place in the world. With this marketplace, your local currency is no longer just a medium of exchange, it becomes a vehicle of opportunity." The platform utilises Interstellar's enterprise-grade, blockchain-agnostic infrastructure for security, scalability, and rapid settlement.

Haytham El Maayergi, Executive Vice President of Afreximbank, commented: “The PAPSS African Currency Marketplace gives us the power to transform trade dramatically, bringing us to trade with each other with a key benefit that we can now accept each other’s currency.”

Initial results from a pilot phase are promising. Over 80 African corporates conducted transactions across 12 currency pairs, settling entirely in local currencies. Kenya Airways, for instance, can now directly exchange Nigerian Naira earned from ticket sales for Kenyan Shillings via PACM, bypassing a third currency. Early adopters like ZEP-RE (PTA Reinsurance Company) and Access View Africa have expressed strong support. Ogbalu added that interest is also coming from institutions outside Africa seeking to join the ecosystem.

AfCFTA Adjustment Fund Makes First Investment

In related news at AAM2025, the Credit Fund of the AfCFTA Adjustment Fund announced its first investment closure. It committed R180 million to Telecel Global Services Ltd., a subsidiary of the Mauritius-based Telecel Group, through a senior secured amortising loan.

Telecel provides wholesale voice, SMS services, and enterprise connectivity to over 250 telecom operators globally, with a significant African presence. The investment will support Telecel's expansion in Ghana and Liberia, strengthen infrastructure, and help bridge Africa’s digital divide – a critical factor for AfCFTA success.

Jean-Louis Ekra, Chairman of the Board of the AfCFTA Adjustment Fund Corporation, stated: “This R180 million investment in Telecel Global Services demonstrates how targeted capital can drive meaningful impact—accelerating digital connectivity, enabling intra-African trade, and supporting private sector-led development.” AfCFTA Secretary-General Wamkele Mene noted the deal shows the Fund starting to support State Parties and the private sector in making the Agreement "commercially meaningful."

Afreximbank President Prof. Benedict Oramah said the investment strengthens the digital economy and regional connectivity, reinforcing a commitment to transforming Africa's economic structure. Marlene Ngoyi, CEO of Fund Manager FEDA, highlighted the strategic intent to catalyse growth in vital sectors.

The Credit Fund will prioritise commercially viable investments enabling trade, diversification, and inclusive growth aligned with AfCFTA goals. Meanwhile, the PAPSS African Currency Marketplace is now open to eligible corporations, financial institutions, and market participants continent-wide.

https://bit.ly/3IasupI

Africa Automotive: South Africa's Automotive Industry Faces Production Challenges Amid Global Pressures

The suspension of C-Class sedan production at Mercedes-Benz South Africa's (MBSA) East London plant until late July underscores a deepening crisis within South Africa's vehicle assembly sector, according to Renai Moothilal, chief executive of the National Association of Automotive Component and Allied Manufacturers (Naacam). Moothilal describes production plant volume cuts as increasingly frequent over the past two years.

MBSA confirmed the planned non-production period from 24 June to 30 July, attributing it to sufficient existing stock meeting current demand and standard procedure for volume adjustments. Operations are set to resume on a two-shift basis from 1 August. Naacam indicates component suppliers received advance notice of this specific shutdown.

"This planned closure aligns with patterns observed across the South African vehicle assembly landscape for approximately two years," Moothilal stated. "While uncertainty stemming from US tariff situations presents obvious market issues, the persistent volume reductions pose a significant threat to the business sustainability of component manufacturers."

Naacam has documented numerous local component plant closures and associated job losses directly linked to assemblers failing to achieve the production volumes initially projected when vehicle platforms were launched. "This correlation is clear and has occurred at several assemblers locally since 2023," Moothilal emphasised.

He points to the anticipated 2025 policy review of the government's Automotive Production and Development Programme (APDP), led by the Department of Trade, Industry and Competition, as a critical juncture. Moothilal argues the review must urgently devise mechanisms to shield component companies from the damaging impact of volatile assembly volumes. Currently, vehicle manufacturers receive the largest portion of APDP incentives, including cash and duty rebates tied to assembly volumes and domestic value addition.

"The goals of the South Africa Automotive Masterplan 2035 (SAAM 35) concerning localisation and employment hinge on addressing this imbalance," Moothilal warned. "Failure to do so jeopardises these objectives." When SAAM 35 was drafted between 2016 and 2018, average local content in domestically assembled vehicles stood below 40%, ranging from roughly 30% for high-tech passenger cars to 45% for light commercial vehicles. Moothilal notes that nearly a decade later, this figure remains largely unchanged, despite SAAM 35 targeting 60% local content by 2035. The plan also aims to double employment within the automotive value chain, from about 112 000 to 224 000 people.

Export Reliance and Global Headwinds

MBSA's situation highlights the sector's export dependency. Over 90% of its East London output is shipped to more than 80 global markets, vital as domestic sales for premium brands like Mercedes-Benz have declined sharply. Factors include increased competition from Chinese imports and a consumer shift towards more affordable vehicles.

The parent company, Mercedes-Benz Group, faces its own challenges: a sluggish German economy, potential US tariffs, and surging Chinese competition. The company warned in April of "material impacts" on its financial results if all implemented and announced tariffs remain through 2025.

The European Union, South Africa's largest vehicle export market, presents a mixed picture. While overall EU new car registrations dipped slightly (0.6%) year-to-date until May 2025, battery-electric vehicle (BEV) market share grew to 15.4%. Chinese automakers doubled their EU market share to 5.9% in May 2025 compared to May 2024, demonstrating resilience even amidst new EU tariffs on Chinese EVs by focusing on plug-in and full hybrids. Mercedes-Benz ranked tenth among the top 25 BEV brands in the EU for May, behind Volkswagen (first) and BMW (third), both of which also manufacture in South Africa.

Contrasting African Markets and Local EV Lag

While South Africa contends with production volatility, other African markets show strong growth. Morocco's new car market surged 36.14% in the first half of 2025, selling 112 026 units. Egypt recorded a dramatic 128% year-on-year increase in total automotive sales for May 2025, reaching 14 300 units, with passenger car sales up 98%.

South Africa's automotive sector, contributing 5.2% to GDP (3.2% manufacturing, 2% retail), demonstrated resilience in June 2025 with new vehicle sales climbing 18.7% year-on-year, buoyed by interest rate cuts, controlled inflation, and affordable Chinese imports. However, exports showed signs of strain for major players.

A significant lag remains in electric vehicle adoption. While global EV sales exceeded 17 million units in 2024, growing over 25%, South Africa is a slow starter. Naamsa, the National Association of Automobile Manufacturers of South Africa, is spearheading efforts to build foundational infrastructure. It has commenced work on a national network of 120 publicly accessible EV charging stations along major routes, featuring fast chargers.

Shivani Singh, Naamsa's chief projects officer, highlighted fuel station forecourts as ideal locations due to their traffic, location, and permits. The current scarcity is stark: fewer than 400 public EV chargers compared to 4 800 licensed petrol stations. Timothy Oliver, fuel specialist at Connect Group South Africa, cited capital constraints for diversification and complexities of managing multiple sites as hurdles for retailers.

Naamsa's charging network initiative represents a concrete step towards making EV ownership viable, aiming to replace the unreliable and sparse infrastructure currently available. The success of this infrastructure push, coupled with addressing the fundamental challenges of assembly volume stability and localisation incentives highlighted by Naacam, will be crucial for the future sustainability and growth of South Africa's critical automotive industry.

https://bit.ly/44d0udy