Losing the steel industry would have resulted in "massive deindustrialisation" in SA, said Trade and Industry Minister Rob Davies.
The minister on Tuesday briefed the portfolio committee on trade and industry on the department's response to the president's state of the nation address and the budget.
Davies told the committee that there was a real threat of the steel manufacturing industry ceasing to exist, a few years back. If that had happened, SA would have regressed.
"I don't know if people are aware of the disaster that would befall the country if this happened. We would have regressed to being iron ore producer, just exporting dirt out of the ground," Davies said.
Apart from losing beneficiation, Davies said SA does not have the port capacity to import steel needed by businesses in SA. "We would have had massive deindustrialisation."
Davies said hard decisions had to be taken to yield a turnaround of the industry.
Hard decisions need to be taken again, in terms of the export taxes announced in the budget, but these are needed to ensure that scrap metal-based and smelter industries are supported in the country, he added.
"Without a steel industry we will not have downstream activity."
Last year government intervened on a decision by the US to impose a 10% ad valorem tariff on imports of aluminium products, and 25% ad valorem tariff on steel products, for national security purposes.
Through engagement, the US granted SA tariff exemptions on 161 aluminium and 36 steel products.
SA’s aluminium exports to the US account for 1.6% of total aluminium imports by the US. SA’s steel exports in 2017 only accounted for 0.98% of total US steel imports, Fin24 previously reported.