ArcelorMittal South Africa has delayed its decision to stop long steel production by six months. The company will continue operations until at least August 31, 2025, thanks to a ZAR 1.683 billion ( approximately USD 91.5 million) funding boost from the state's Industrial Development Corporation. The move has allowed around 3,500 workers at risk of closure to keep their jobs, albeit temporarily.
The long steel unit, which operates in Newcastle and Vereeniging, produces critical products for the construction, mining and manufacturing sectors. But it has recently suffered severe financial losses due to weak domestic demand, high energy costs, inefficient rail transportation and increased competition from mini-mills. By the end of 2024 alone, this unit's losses amounted to ZAR 1.1 billion ( approximately USD 61 million), bringing the company's total losses to more than ZAR 5.1 billion (approximately USD 285 million).
The company's decision to suspend its closure has created a critical breathing space for the sector and the economy. During this time, both the government and ArcelorMittal will sit down to find permanent solutions to structural problems. A review of scrap metal policies, import taxes and steps towards logistics infrastructure are on the agenda. However, according to experts, if this support is not complemented with permanent solutions, the future of the company is still uncertain.
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