South Africa moved one step closer to the creation of a state-owned steel manufacturer on Monday with the Industrial Development Corporation's (IDC's) R3.4-billion acquisition of Anglo American's majority stake in the Scaw Metals Group.

Resources giant Anglo American said in a statement on Monday that it had finalised the sale of its 74% interest in Scaw Metals to an IDC-led consortium that included empowerment partners Izingwe Holdings, Shanduka Resources and the Southern Palace Group of Companies.

The IDC's divisional executive of mining and manufacturing, Abel Malinga, said in a statement that the acquisition "puts the IDC in a unique position to make the necessary investments to grow Scaw's operations, supporting beneficiation, infrastructure development and South Africa's economic growth".

The government has for some time criticised market leader ArcelorMittal SA for selling steel locally at export prices.

"High steel input costs inhibit the development of a robust and sustainable downstream steel fabrication industry to the detriment of job creation," Malinga said.

"It is critical to maintain and deepen the industrialisation of the economy by refocusing the beneficiation strategy to support fabrication and manufacturing."

Malinga said the IDC aimed to leverage existing strengths within the business, to grow it into a global player, taking advantage of opportunities that would be opened up by South Africa's massive state-led infrastructure drive, announced earlier this year by President Jacob Zuma.

"As a leading diversified South African fabricator, Scaw has the potential to be a key supplier to planned infrastructure and construction programmes."