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ArcelorMittal South Africa could face job losses of over 4,000 people, according to a union.

A union has announced that ArcelorMittal South Africa is planning to cut 4,000 jobs, which is nearly half of its current workforce. This was more than originally expected. The cuts will now extend to the main Vanderbijlpark plant, the union added.

Steelmaker announced previously that it would shut down its long-steel plants in Newcastle and Vereeniging, resulting in the loss of 3,500 jobs. This is because talks with government failed to produce an alternative solution.

AMSA stated that it is "limited in our ability to say anything in the public domain due to the complexity of the issues under discussion and the cautionary announcements we made recently", adding "certain processes are ongoing."

About 4% of the group's output is produced by this company, which produces 2.4 million tons of steel per year.

Solidarity said AMSA told its employees it was planning "mass layoffs of more than 4,000 workers".

The statement stated that the cuts were expanded to Vanderbijlpark, AMSA's flagship facility for flat steel.

The company reports losses since 2023. It posted a headline loss of 1 billion rand (56 million dollars) in the first half of this year due to low sales and prices.

AMSA has delayed the closure of its long-running steel operations twice. The operation is buckling due to a weak local market, high electricity rates, poor logistics, and competition from local scrap recycling plants as well as imports from China.

The union claimed that the government was dragging its feet in finding solutions.

AMSA asked the government for a reduction in scrap export duties that it claims give recyclers a unfair advantage. It also requested tariffs to be imposed on imports. The group also asked for favourable freight and electricity costs from the state-owned utilities. (Reporting and editing by Kevin Liffey; Nelson Banya)

(source: Reuters)