The company’s EBITDA decreased from a profit of R167 million to a loss of R1 256 million.
“On the back of a demanding 2019, the first half of 2020 proved to be incredibly difficult with the widespread health, social and business impact brought about by the global Covid-19 pandemic,” explains Kobus Verster, Chief Executive Officer of ArcelorMittal South Africa. “The global threat of the fast-spreading virus had already started reducing demand before Covid-19 hit our shores, while at the same time we anticipated another sovereign downgrade.”
The impact of the pandemic on economic activity was abrupt and the business response needed to be sharp and decisive. The unprecedented and rapid shutdown of ArcelorMittal South Africa’s assets was done safely and in a manner that would enable a swift but well-controlled restart.
“Taking lessons from other parts of the ArcelorMittal group allowed us to rapidly implement a response plan to protect our people, assets and financial lifelines,” says Verster.

After reassessing its strategic asset footprint, ArcelorMittal South Africa has modified its operational capacity with some parts of the business remaining idle until demand recovers.
Anticipating that steel demand will, for the foreseeable future, remain at between 70% to 75% of levels planned before the lockdown, the company announced a large-scale labour reorganisation in terms of Section 189(3) of the Labour Relations Act 66 of 1995 on 18 June 2020. Although the number of positions affected is subject to a formal consultation process, the company aims to negotiate a multi-faceted, flexible solution in response to the temporary idling of some operations.

ArcelorMittal South Africa continues to make good progress with its intended acquisition of the Highveld Structural Mill. The business also continues to look for opportunities to improve the cost structure of certain strategic raw materials and to monetise its by-products streams through joint venture arrangements. Although taking longer than intended due to the pandemic, the project to seek a co-investor for the commercial market coke business continues. ArcelorMittal South Africa has also shortlisted potential partners for a joint venture to establish a logistics hub using the available land and infrastructure of the Saldanha Works.

“Our best practice response to the Covid-19 pandemic emphasised that the wellbeing and safety of our employees remains our number one priority,” says Verster. The business provides first-line care internally and refers more severe suspected cases of infection to external healthcare providers.
Although the company’s lost-time injury frequency rate (LTIFR) increased to 0.55 from 0.38, the total injury frequency rate (TIFR) of 6.56 reflected an improvement from 7.31 in the comparable period.
In support of surrounding communities, the ArcelorMittal Foundation, through Thusong Projects, is providing 800 litres of soup and 445 loaves of bread each day to local communities. ArcelorMittal South Africa provided 600 food parcels to vulnerable farm communities in Overvaal. The company’s requirement of 15 000 face masks was awarded to a B-BBEE SMME using local skills and 1 000 masks were donated to local NGO workers who care for vulnerable members of the community.

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