ArcelorMittal South Africa Pursues Funding to Postpone Long Steel Business Closure
ArcelorMittal South Africa is seeking government and stakeholder funding to postpone the closure of its long steel business, impacting 3,500 jobs due to previous financial losses. The company is negotiating support of R500 million and an additional R3 billion for operational maintenance, alongside appeals for favorable trade conditions.
ArcelorMittal South Africa is currently in talks to secure financial assistance from the government and other stakeholders to delay the closure of its long steel business. The company had previously announced intentions to cease operations producing fencing, rail, rods, and bars by April due to unsuccessful negotiations with the government. This closure could jeopardize 3,500 jobs and significantly disrupt multiple industries, primarily due to low demand and infrastructure challenges.
As of 2024, the operational loss of ArcelorMittal’s long steel division has surged to R1.1 billion, with an overall headline loss of R5.1 billion for the year ending December 31. ArcelorMittal stated, “ArcelorMittal South Africa is engaging with stakeholders, including government, regarding funding and related matters to enable the deferral of the wind down of the longs business.” The company emphasized that the wind down process continues, pending successful funding discussions.
Initially announced in January 2025, the closure included an immediate halt to steel production with the rest of the operations scheduled to close by the end of the first quarter of that year. Reports indicate that the South African government is proposing approximately R500 million to support steelworker salaries for six to eight months, as discussed by sources familiar with the negotiations.
Additionally, the Industrial Development Corporation (IDC) is in discussions for potential bridge financing which may lead to an increased stake in ArcelorMittal from its current 8.2%. The IDC and the government are urging the company to consider acquiring offers for two mills in Vereeniging and Newcastle, deemed crucial for boosting the economy through infrastructure projects and supporting key sectors such as automotive and mining.
To sustain the mills for another year and build inventory for manufacturers like Volkswagen and Isuzu Motors, ArcelorMittal is requesting around R3 billion. Furthermore, the company seeks the removal of export taxes on scrap metal, implementation of import duties, and reductions in electricity and freight rail costs to enhance competitiveness.
In summary, ArcelorMittal South Africa is actively negotiating funding to delay the imminent closure of its long steel operations, which poses significant job risks and disruptions to industries. The company reports escalating losses and requires both government assistance and supportive fiscal policies to maintain operations and bolster local manufacturing sectors. The outcome of these discussions will be pivotal for the future of the company’s workforce and the broader South African economy.
Original Source: www.mining-technology.com
