ArcelorMittal South Africa says little progress made to avert plant closure

Talks with government have so far yielded little progress to avert the closure of loss-making long steel operations at ArcelorMittal South Africa, the company said on Monday.

The South African unit of the world number two steelmaker said in November 2023 it planned to close the two plants, citing weak domestic demand, high electricity tariffs, poor freight logistics and competition from local scrap metal recycling mini-mills and imports from China.

"Regrettably, limited progress has been made to date in redressing the major structural impediments," ArcelorMittal SA said in a trading update.

It said the closure could no longer be postponed beyond September 30 unless a solution is found soon.

Trade and industry minister Parks Tau told lawmakers on July 4 government was in "firefighting mode" as it tries to avoid the closure of ArcelorMittal's operations in KwaZulu-Natal and near Johannesburg.

The closure of the plants, which supply rail, roads and bars to the construction, mining and manufacturing sectors and components for the automotive industry, has been deferred twice as the company and government sought to save the 3,500 jobs directly under threat.

In March, the steel company postponed the closures to September 30 after the state-owned Industrial Development Corporation injected R1.683bn in cash.

Imports have flooded the domestic market, taking up more than 35% of local steel demand, while freight rail service "deteriorated to its lowest levels ever, resulting in significantly elevated operating risk", the steelmaker said.

ArcelorMittal SA expects to report a headline loss per share between 89c 99c for the six months to June 30, narrowing its loss from R1 per share during the same period last year.

Sales volumes declined by about 10% in the first half of 2025 compared to last year, the company said.

ArcelorMittal SA will release its half-year financial results on July 31.

Reuters