Edson Baraukwa | Africa Guardian
ArcelorMittal South Africa, a subsidiary of Luxembourg-based ArcelorMittal, announced on Monday its decision to shut down its long-steel business, a move that will affect approximately 3,500 direct and indirect jobs.
The company cited ongoing challenges such as sluggish economic growth, rising logistics and energy costs, and a surge in low-cost steel imports, especially from China, as key factors behind the decision.
Operations in the long-steel segment will transition into care and maintenance, with steel production set to halt by late January 2025. The remaining production processes are expected to wind down fully during the first quarter of the year, the company said.
This decision is anticipated to have significant economic repercussions, particularly in South Africa’s Newcastle region, where many jobs are tied to the steel sector.
ArcelorMittal South Africa also revealed it is restructuring its R1 billion ($54 million) working capital facility, secured in 2024, to facilitate the transition.
The company has forecast a challenging financial outlook for the 2024 fiscal year, predicting a net loss between R5.48 and R6.21 per share, a steep drop from the previous year’s loss of R3.52 per share. Headline earnings per share are also expected to decline, with a projected loss between R4.06 and R4.41, compared to the prior year’s R1.70 loss.
Annual revenue is forecast to drop by over 5% compared to 2023, driven by weaker net realized prices, reduced asset utilization, and the challenges within the long-steel business.
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