Johannesburg, January 6 (IANS). Steel producing company ArcelorMittal South Africa Limited on Monday announced that it is closing its loss-making long steel business in the country. The move is likely to affect around 3,500 direct and indirect jobs.
The company had been planning to shut down operations since November due to prolonged weak economic conditions, logistics and energy challenges and cheap steel imports from China.
After this announcement by ArcelorMittal, the company’s shares fell by 15 percent.
The statement said the company is at a point where any further delay could impact the sustainability of the company and therefore the decision to cease long steel production in South Africa cannot be postponed any further. The Board and management of ArcelorMittal South Africa have an ethical and legal duty to ensure that the overall business remains sustainable in the long term.
The statement further said that the company appreciates the support received from the government and other parties and that some progress has been made in the initiatives taken to stop it, but these are not enough.
ArcelorMittal South Africa said Newcastle Works has been hurt by persistently high logistics and energy costs, inadequate policy interventions (particularly policy decisions made some time ago) related to substantial subsidies to scrap-based steelmaking operations. This has made Long’s Steel business unstable.
The company said that despite all efforts, the package of initiatives sought has not reached a level that can address the structural problems experienced by the company in the Longs business.
By the end of the year, the company had no choice but to close the longs business.
The company further said that market conditions have worsened in the fourth quarter of 2024 due to severe pressure on global steel demand and prices, which harmed the financial performance of ArcelorMittal’s South Africa business as a whole.
–IANS
ABS/ABM
