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ArcelorMittal plant is seen in Vanderbijlpark, an industrial city south of Johannesburg, South Africa.
Arcelor Mittal South Africa has delayed the closure of its long-steel plant operations by a month pending talks with the government to try to save the business, it said on Thursday.
The company had planned to start winding down the loss-making long-steel business by the end of last month, but has delayed it due to “continuing discussions with the South African government” as well as higher than anticipated orders, it said.
It added it would announce the talks’ outcome before the end of this month.
“We have asked the government to normalise a few things, which are electricity and rail costs, and to act quicker in terms of border protection for the steel industry,” Arcelor Mittal South Africa CEO Kobus Verster told a news briefing.
“We were clear to say we are not going to carry any further losses,” Verster added.
The company wants the government to reduce the discount on scrap metal offered to South African recycling mini-mills, saying this put its long steel operations at a disadvantage.
Arcelor Mittal South Africa’s longs business operational loss doubled to R1.1 billion ($59.11 million) in 2024, from 600 million rand the year before.
VIDEO| Government officials visited the Arcelor Mittal plant in Vanderbijlpark after the announcement:
The company received a R380 million loan from the Industrial Development Corporation of South Africa, its second-largest shareholder after parent company ArcelorMittal, to facilitate the continued operations of its long-steel business.
Arcelor Mittal South Africa also reported a headline loss of R5.1 billion for the year ended December 31, compared with a R1.89 billion headline loss in 2023.
It said the losses were driven by poor financial performance in its long steel business, reflecting weak demand, high energy and logistics costs, as well as low-cost steel imports, particularly from China.
The closure of the long-steel operations, which produce fencing material, rail, rods and bars used in the construction, mining and manufacturing sectors, has been expected since November 2023. The shutdown could affect about 3,500 direct and indirect jobs in total.
VIDEO | President of the Golden Triangle Chamber of Commerce says they are waiting for exact numbers from Arcelor Mittal in terms of how many workers will be affected in Vereeniging:
