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ArcelorMittal South Africa says little progress made to avert plant closure

ArcelorMittal South Africa said that discussions with the South African Government have not yet yielded much progress in preventing the closure of its loss-making long-steel operations.

In November 2023, the South African division of ArcelorMittal SA, world's number two steelmaker, announced that it would close two plants. It cited weak domestic demand and high electricity rates, poor logistics, and competition from mini-mills for recycling scrap metal and imports from China.

ArcelorMittal South Africa stated in an update on trading that "regrettably" there has only been limited progress in resolving major structural obstacles. The company said that the closure of the plant could not be delayed beyond September 30, unless a quick solution was found.

Parks Tau, South Africa's Trade and Industry Minister, told lawmakers that on July 4, the government is in "firefighting" mode as it attempts to prevent the closure of ArcelorMittal operations in KwaZulu Natal near Johannesburg and in KwaZulu Natal.

The company and government have tried to save 3,500 jobs that were directly threatened by the closure of these plants. These plants supply rails, roads, and bars for construction, mining, manufacturing, and automotive industries.

The state-owned Industrial Development Corporation, which owns the steel company, injected cash of 1.683 billion Rand ($94.22 millions) to the steel firm in March.

The steelmaker said that imports had flooded the market, accounting for more than 35%. Meanwhile, freight rail service has "deteriorated to its lowest level ever," resulting in a significantly increased operating risk.

ArcelorMittal South Africa is expecting to report a headline per share loss between 0.89 and 0.99 rands ($0.0498 to $0.0554) in the six-month period ending June 30. This will be a reduction from the 1 rand loss per share reported during the same time last year.

The company reported that sales volumes had declined by 10% in the first six months of 2025, compared with last year.

ArcelorMittal South Africa is scheduled to release its financial results for the first half of the year on July 31.

(source: Reuters)