ArcelorMittal South Africa announced on Wednesday that it was in discussions with the government and others parties about funding to delay the planned closing of its long-stack steel operation.

After discussions with the government, the steelmaker announced on February 28th that it will cease production of long steel fencing materials, rails, rods, and bars in April.

The company released a statement saying that it was in contact with all stakeholders, including the government, to discuss funding and other related issues, which would allow the winding down of the longs operations, as well the previously announced interventions.

It said that the ongoing wind-down process had not stopped but "was being managed in a way that accommodated ongoing funding discussions".

The company stated that "without agreement regarding funding and related issues, deferring the winding down of the longs' business will not be possible."

ArcelorMittal, in addition to seeking funding, has requested that the government remove an export tax for scrap metal. It claims this unfairly gives an advantage to recyclers. The company wants the government also to impose import duty and lower freight rail and electricity costs.

A spokesperson from the South African industry ministry confirmed that discussions with ArcelorMittal, and other industry participants, had taken place.

The spokesperson stated by email that the government is committed to saving jobs.

It was attributed to a lack of demand and infrastructure problems that the planned closure in November 2023 would occur.

This would affect 3,500 direct jobs and indirect ones, as well as disrupting the supply in the automotive component manufacturing sector, as well as the rail, mining and construction industries.

ArcelorMittal South Africa’s longs business operational loss has doubled from 600 million rand in the previous year to 1.1 billion Rand ($60.56m) by 2024.

The company reported an annual headline loss of 5.9 billion rands for the year ending December 31 compared to a loss of 1.89 billion rands in 2023.

The company said that the loss was due to poor performance in its long-sealing business and low-cost imports of steel, mainly from China. Reporting by Nelson Banya, Editing by Alison Williams. $1 = 18.1639 rand

(source: Reuters)