By Monique Vanek, Bloomberg.
South Africa said it is in talks with ArcelorMittal South Africa to avert plans to shut crucial steel mills in the country after rescue talks with the government failed and the operating environment deteriorated.
“Recognising the steel industry’s vital role in South Africa’s economic reconstruction and recovery, we would like to reassure all stakeholders that we are engaging AMSA on finding a solution to maintaining longs steel capacity in South Africa,” the Department of Trade, Industry and Competition said in a statement Monday.
AMSA last week said it will fully idle its long-steel plants in the second quarter, resulting in the loss of about 3 500 direct jobs. An initial plan to close the facilities by the end of January was postponed by a month to fulfill orders.
The one-time state steel business bought by billionaire Lakshmi Mittal’s company in 2003 expects to begin shutting down its blast furnaces in the first week of March and cease steel production by early April.
Kobus Verster, AMSA’s chief executive officer, last month said the Vereeniging and Newcastle mills, which indirectly support more than 100 000 jobs, supply between 350 000 tons and 400 000 tons of steel products that can’t currently be manufactured by any other companies in South Africa.
The planned shutdown has alarmed companies that rely on the plants to supply steel to their own operations because imports would be too costly and less reliable.