ArcelorMittal South Africa is negotiating with the government for funding to delay the closure of its long steel operations, initially set for April 2024. The operational loss in this sector has increased significantly, impacting 3,500 jobs and various industries. The company seeks additional measures from the government to support its operations.
ArcelorMittal South Africa is currently negotiating with the government and stakeholders for potential funding to postpone the closure of its long steel operations. Initially announced on February 28, the closure would halt production of fencing materials, rail, rods, and bars by April due to ongoing losses. The company stated that discussions with the government have not ceased, yet the wind-down process is still underway while accommodating funding talks.
The steelmaker emphasized that without a resolution on funding, delaying the closure of the long steel unit will not be possible. Aside from financial support, ArcelorMittal has requested the removal of export taxes on scrap metal, which it believes advantages recyclers. Other government considerations include imposing import duties and reducing electricity and freight rail costs.
A representative from South Africa’s industry ministry has confirmed these discussions, citing government efforts focused on job preservation. The planned closure announced in November 2023 was attributed to weak demand and ongoing infrastructure issues. The impact may affect 3,500 jobs and disrupt supply to crucial sectors, including automotive components, mining, rail, and construction.
In its financial report, ArcelorMittal acknowledged the operational loss from its long steel sector surged to 1.1 billion rand ($60.56 million) in 2024, escalating from 600 million rand the previous year. The company also recorded a headline loss of 5.1 billion rand for the year ending December 31, compared to a loss of 1.89 billion rand in 2023, largely driven by poor performance in long steel operations and competition from low-cost imports, especially from China.
ArcelorMittal South Africa is actively pursuing funding to delay the anticipated closure of its long steel operations due to financial losses and weak market conditions. The company is engaging with the government on various support measures while balancing ongoing operational challenges. The imminent closure poses significant risks to jobs and local industries, prompting government involvement in discussions aimed at mitigating job losses and economic impacts.
Original Source: www.marketscreener.com
