With South Africa’s Government seemingly incapable of removing structural barriers destroying the domestic steel industry, ArcelorMittal SA has said it has no option but to again consider the early closure of its Long Steel divisions in Vereeniging and Newcastle.

Currently, a 6-month closure deferral process is in place until September 30. However, the Company may need to make preparations for shuttering and closure beyond this date.

This was despite ArcelorMittal SA receiving a R1.6 billion funding facility from the Industrial Development Corporation (IDC)  to keep its long steel operations going whilst Government was supposed to address logistical, input costs such as electricity and other impediments to the steel industry from a structural perspective.

“Transnet’s rail performance deteriorated to its lowest levels ever resulting in significantly elevated operating risk and unaffordable additional cost being borne by the Company,” says ArcelorMittal SA.

Closure of the two long steel plants in Vereeniging and Newcastle will result in the loss of at least  3 500 permanent and contractor jobs in two economically depressed regions of South Africa’s industrial and steel heartlands.

In reaction, the Golden Triangle Chamber of Commerce (GTCoC) said any close-down would be the direct result of the Government of National Unity (GNU) failing to address policy and structural issues confronting the domestic steel industry.

“Financing on its own only leads to kicking the can down the road,” says GTCoC spokesperson Jaco Verwey.

Acute uncertainty has now returned to steel communities in the Vaal and Newcastle following the announcement.