(Reuters) – ArcelorMittal South Africa will cease long steel production by April this year after discussions with the government failed to avert the plant’s closure, the company said on Friday.
The planned closure of the loss-making long steel operations, blamed on weak domestic demand and competition from local scrap metal recylcing mini-mills and imports from China, is set to impact 3,500 direct and indirect jobs.
ArcelorMittal South Africa’s long steel operations produce fencing material, rail, rods and bars used in the construction, mining and manufacturing sectors.
The South African unit of world number two steelmaker ArcelorMittal SA said it would start shutting down its blast furnaces in the first week of March. The last steel will be produced in late March or early April, it added.
The final wind-down into care and maintenance will be fully implemented in the second quarter of 2025.
On February 6 the company unveiled a delay in the closure of long steel operations, citing talks with the government.
“The structural elements leading to the wind-down of the long steel business remain unaddressed despite extensive discussions,” it said in a statement.
“We were unable to avoid what will be a significant negative impact on the economy.”
ArcelorMittal South Africa wanted the government to remove a tax on scrap metal exports it said favoured recyclers. It also wanted the government to impose import duties and sought to negotiate lower electricity and freight rail costs.
Its operations loss from the longs business doubled to 1.1 billion rand ($59.46 million) in 2024, from 600 million rand the year before.
ArcelorMittal South Africa reported a wider 5.1 billion headline loss in 2024, from 1.89 billion rand the year before.
($1=18.4996 rand)
(Reporting by Nelson Banya; Editing by David Evans and Clarence Fernandez)
