ArcelorMittal South Africa long-steel closure delayed pending talks

ArcelorMittal South Africa has delayed the closure of its long-steel plant operations by a month pending talks with the government to try to save the business, it said on Thursday.

The company had planned to start winding down the loss-making long-steel business by the end of last month but has delayed it due to “continuing discussions with the South African government” as well as higher than expected orders, it said.

It added it would announce the talks' outcome before the end of the month.

“We have asked the government to normalise a few things, which are electricity and rail costs, and to act quicker in border protection for the steel industry,” ArcelorMittal South Africa CEO Kobus Verster told a news briefing.

“We were clear to say we are not going to carry any further losses.”

The company wants the government to reduce the discount on scrap metal offered to South African recycling mini-mills, saying this put its long-steel operations at a disadvantage.

ArcelorMittal South Africa's longs business' operational loss doubled to R1.1bn in 2024, from R600m the year before.

The company received a R380m loan from the Industrial Development Corporation, its second-largest shareholder after parent company ArcelorMittal, to facilitate the continued operations of its long-steel business.

ArcelorMittal South Africa also reported a headline loss of R5.1bn for the year ended December 31, compared with a R1.89bn headline loss in 2023.

It said the losses were driven by poor financial performance at its long-steel business, reflecting weak demand, high energy and logistics costs as well as low-cost steel imports, particularly from China.

The closure of the long-steel operations, which produce fencing material, rail, rods and bars used in the construction, mining and manufacturing sectors, has been expected since November 2023. The shutdown could affect about 3,500 direct and indirect jobs.