Africa’s largest steel producer ArcelorMittal South Africa has announced that it plans to close its long steel operations due to unfavorable market conditions.
Weak demand, limited infrastructure spending and project delays, resulting in overcapacity in the market, high transport and logistics costs as well as high energy prices and persistent rail logistics problems in the country all contributed to the decision. The affected plants will be most plants at the Newcastle Works, the Vereeniging Works, and rolling facilities, while the coke batteries will remain operative.
It is estimated that approximately 3,500 jobs will be affected by the closure of the operations.
“The ArcelorMittal South Africa board and management have reached this point after having exhausted all possible options. As difficult as these circumstances are, we have a duty to ensure that the business remains sustainable in the long term, in the interests of the company and its stakeholders. The remaining business, after the wind-down, will be on a more sustainable financial footing and be able to invest the appropriate capital in product development,” Kobus Verster, CEO of ArcelorMittal South Africa, said.
