ArcelorMittal reviews loss-making Saldanha plant

Loss-making ArcelorMittal is reviewing the future of a major steel export facility on the west coast due to low prices and rising electricity costs.

The ArcelorMittal unit revealed the review of its Saldanha Works on Thursday as it flagged a deeper loss for 2015.

It expects a headline loss per share of 1,250 cents for the year ended 31 December, 22 times higher than the previous year. It also said it had written down 3.6 billion rand ($228 million)on Saldanha Works, which sits on a major iron ore export line.

"The future of the operation is currently being reviewed," the company said.

Saldanha Works, which produces around 1.2 million tonnes annually with a staff of more than 500, is the company's newest plant and the only one focused on export.

story_article_left1

Shares in ArcelorMittal were up 10 percent at 7.65 rand by 1130 GMT, buoyed by reports that China plans to cut its steel manufacturing capacity.

The government in August last year agreed to a 10 percent steel import tariff as trading authorities continue to investigate several Chinese steel products on anti-dumping grounds.

ArcelorMittal said such imports were a factor in its performance.

"The local steel industry continues to be threatened by the weak international steel environment with imports primarily from China continuing to enter our local market," ArcelorMittal said in a statement.

ArcelorMittal said in a separate statement that Dean Subramanian, currently chief financial officer, has been appointed acting chief executive after the steelmaker' s chief executive Paul O'Flaherty stepped down in December after less than two years at the helm.

- Reuters