ArcelorMittal’s fate still in the balance as closure threat looms again
ArcelorMittal warns it may begin closing its Long Steel Business before September due to unresolved structural challenges.
The fate of ArcelorMittal is in the balance again, with the company reporting that talks with the government have so far yielded little progress to avert the closure of loss-making long steel operations.
ArcelorMittal initially announced the closure of the Newcastle and Vanderbijlpark plants in November 2023, which would have meant 3,500 job losses and severely impacted the Newcastle economy.
The company cited weak domestic demand, high electricity tariffs, poor freight logistics and competition from local scrap metal recycling mini-mills and imports from China.
In March, the steel company postponed the closures to September 30 after the state-owned Industrial Development Corporation injected R1.683 billion.
Imports have flooded the domestic market, taking up more than 35% of local steel demand.
At the same time, freight rail service “deteriorated to its lowest levels ever, resulting in significantly elevated operating risk,” the steelmaker’s statement said.
Despite government promises to intervene, the company confirmed that ‘limited progress has been made to date in redressing the major structural impediments.
It said the closure could no longer be postponed beyond September 30 unless a solution is found soon.
In a trading statement issued ahead of its half-year results, the company said it expects to report a reduced loss compared to the prior comparative period.
It anticipates a loss per share of between 82 cents and 93 cents, compared to a loss of R1.09 in the same period last year.
Headline earnings per share are also expected to improve from a loss of R1.00 to a loss of between 89 cents and 99 cents.
Further updates are expected as part of ArcelorMittal South Africa’s financial results for the six months to end-June 2025, which will be published on July 31.
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