By Lehlohonolo Lehana.
@Bloomberg.
ArcelorMittal South Africa (AMSA) has delayed the closure of its long-steel plant operations by a month pending talks with the government, it said on Thursday.
The company had planned to start winding down the loss-making long-steel business by the end of last month, but has delayed it due to “continuing discussions with the government” as well as higher than anticipated orders, it said.
It added it would announce the talks’ outcome before the end of this month.
“We have asked the government to normalise a few things, which are electricity and rail costs, and to act quicker in terms of border protection for the steel industry,” ArcelorMittal South Africa CEO Kobus Verster told a news briefing.
“We were clear to say we are not going to carry any further losses,” Verster added.
The company wants the government to reduce the discount on scrap metal offered to South African recycling mini-mills, saying this put its long steel operations at a disadvantage.
Steel imports increased 9.4% to 1.4 million tonnes in 2024, which will increase dramatically in the current year unless further tariff protections are implemented. Amsa says some 60% of these imports could be made locally.
Amsa’s share price – already a tenth of its peak in 2022 – dropped 12% on Thursday after the results were released.
ArcelorMittal South Africa’s longs business’ operational loss doubled to 1.1 billion rand ($59.11 million) in 2024, from 600 million rand the year before.
The company received a 380 million rand loan from the Industrial Development Corporation of South Africa, its second-largest shareholder after parent company ArcelorMittal, to facilitate the continued operations of its long-steel business.
ArcelorMittal South Africa also reported a headline loss of 5.1 billion rand for the year ended December 31, compared with a 1.89 billion rand headline loss in 2023.