The combination of scrap metal recycling and investment in renewable energy is central to the company’s goal of becoming one of South Africa’s cleanest steel producers. This approach also underpins its R500m expansion, which includes a newly opened rolling mill in Nelson Mandela Bay.
Fedgroup chief commercial officer Rob Timmis explains: “We have enabled the business to focus on its core recycling operations, while we take care of the energy assets to reduce carbon emissions as much as possible and still provide a return to our investors. By funding renewable energy alongside steel recycling, we can help Coega Steels work towards its ambition of producing cleaner steel as the business grows.”
Strengthening regional competitiveness
The R360m rolling mill has an annual production capacity of 150,000t and is expected to create about 300 jobs. It enables Coega Steels to turn billets made from recycled scrap into reinforcing bar, angles and flat bars on site, completing the production chain at its Coega Special Economic Zone operations. This removes the need to transport billets elsewhere for processing, reducing logistics costs and strengthening the company’s ability to supply the Eastern Cape and coastal markets directly.
While on-site processing reduces logistics costs, it also increases the operation’s electricity demand, making energy costs a critical factor in translating new capacity into competitive finished products.
“Energy is one of the highest input costs in steel production. If we can lower that cost reliably and sustainably, we directly enable the businesses we fund to sustain their operations and grow. That growth can create more jobs and provide for more households in South Africa,” says Timmis.
Further 19.8 MWp solar expansion planned
To support the operation’s energy needs, Fedgroup has financed a 7MWp solar photovoltaic plant that has already generated nearly six million kWh of electricity that would otherwise have been drawn from the grid. A 50MWh battery energy storage system is nearing commissioning.
The solar plant is projected to generate around nine million kWh annually enough for 1,500 homes. Together with the battery system, it will help manage the rolling mill’s additional electricity requirements while limiting reliance on grid power.
Building on this infrastructure, Coega Steels plans to add a further 19.8MWp of solar capacity by the end of 2027 and Fedgroup hopes to support this phase through direct funding of additional income-generating energy infrastructure.
The planned investment would extend renewable energy supply as steel production grows, supporting the company’s efforts to reduce emissions per tonne and its exposure to rising electricity prices.
Funding South Africa’s ‘real economy’
For Coega Steels, the model brings dedicated energy funding alongside its investment in manufacturing capacity, with the proposed solar expansion, extending that relationship, by supporting the company’s ability to supply more locally finished steel while managing the energy costs associated with higher output.
Looking ahead, Timmis comments: “South Africa’s industrial transition needs funders who understand both the assets and the businesses they serve. At Fedgroup, we combine that operational knowledge with funding structured around how those assets generate value.
“Coega Steels demonstrates what this approach can deliver, namely investment in energy infrastructure that supports cleaner production and industrial growth, with a commercial foundation for investor returns. This is where we see private capital playing a much greater role, and where Fedgroup is helping to lead the way,” he concludes.
Media Enquiries: Luise Allemann | az.oc.puorgdef@aesiul or (082) 376-6716.
About Fedgroup
Established in 1990, Fedgroup is a diversified South African financial services group with more than R20bn in assets under management. The Group operates across investments, alternative assets, long-term insurance, lending and fiduciary services, serving individuals, advisors and institutions through a fully integrated model.
Fedgroup is recognised for its differentiated approach to asset management, combining traditional financial expertise with scaled exposure to alternative and impact investments. Through its specialist operating platforms, the Group manages a growing portfolio of properties, alongside renewable energy, agricultural and technology-enabled businesses, enabling investors to access stable, long-term returns backed by real assets.
Underpinned by strong governance, disciplined risk management and a people-first philosophy, Fedgroup continues to build a resilient, future-focused financial services business with diversified interests and a long-term view.
