ArcelorMittal South Africa refused to close the production of long products

The company focused on developing a business viability plan

The South African division of global steel producer ArcelorMittal decided not to close steel facilities in the province of KwaZulu-Natal (South Africa), Reuters reports.

The company has now focused on developing a plan to ensure their viability.

The decision to postpone the closure of long products production facilities, which are used in construction, mining, etc., will save 3.5 thousand jobs directly, said ArcelorMittal South Africa CEO Cobus Verster.

In January of this year, the South African division of the company postponed the closure of the business for half a year. The company, in collaboration with the government and trade unions, discussed solving problems affecting profitability and preventing job cuts.

The Board of Directors and management have decided that the Long Products Division will continue to operate to ensure that short-, medium- and long-term initiatives to ensure its sustainability are fully explored.

The closure of the plant was announced in November last year. The move was to concern Newcastle Works, Vereeniging Works and rolling mills using Newcastle Works products as raw materials. Then ArcelorMittal referred to weak demand and a long infrastructure crisis in the South African economy. The company also criticized policies that favor scrap over iron ore in steel production.

Currently, ArcelorMittal South Africa has noted some improvements in power generation as well as port and rail efficiency. In addition, it was said that the non-extension of the ban on the export of scrap after its expiration in December 2023 also contributes to «greater fairness and equality in the structure of production costs» between integrated steel producers and producers of these raw materials.

As GMKC Center reported earlier, the German steel plant ArcelorMittal Eisenhüttenstadt at the end of June suspended production in connection with the maintenance of a single blast furnace 5A.