ArcelorMittal South Africa (Amsa) has announced that its longs steel business, which has been under review for closure, will remain functional, noting some progress in plugging infrastructure, logistical and funding constraints for the division.
Amsa had planned to close the Newcastle and Vereeniging longs steel manufacturing centres but after engagements with government, labour and other stakeholders decided to differ the shutdown earlier this year.
In an announcement this morning, the company said that “despite progress being slower than anticipated and with some instances of disappointment” around negotiations with labour to reduce costs among others, it had “decided that the longs business will continue” to operate.
This would allow for the full exploration of short, medium- and longer-term initiatives aimed at securing the business’ sustainability.
“Management is committed to working closely with all customers, suppliers, and stakeholders to ensure the sustainability of long steel products supply in the Southern African region,” Amsa said.
The company said that its board and management were fully aware of the impact that the closure of the longs business would have on the beneficiation and manufacturing value chain, and the overall industrialisation in South Africa.
This would be in addition to further impacts on jobs and on the local economy, especially in the KwaZulu Natal province.
In deciding to keep its longs steel manufacturing plants operational, Amsa noted that Transnet’s port and rail services had improved.
Negotiations for the rail and ports parastatal to guarantee port and rail service efficiency had “progressed well” while the company had also “obtained an additional 12-month, secured working capital facility of R1 billion” which could be used to support ongoing operations.
“The longs steel product operations have been operationally stable for H1 2024, which is particularly praise-worthy of the operating teams given the natural anxieties about the future of the business,” said the company.
However, the company’s flats steel product operations in Vanderbijlpark had experienced notable levels of instability at the blast furnaces in April and May 2024, due to chilled hearth conditions.
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