(Reuters) -Talks with the South African government have so far yielded little progress to avert the closure of loss-making long steel operations at ArcelorMittal South Africa, the company said on Monday.
The South African unit of world number two steelmaker ArcelorMittal SA initially said in November 2023 it planned to close the two plants, citing weak domestic demand, high electricity tariffs, poor freight logistics and competition from local scrap metal recycling mini-mills and imports from China.
“Regrettably, limited progress has been made to date in redressing the major structural impediments,” ArcelorMittal South Africa said in a trading update. It said the closure could no longer be postponed beyond September 30 unless a solution is found soon.
South Africa’s trade and industry minister Parks Tau told lawmakers on July 4 that the government was in “firefighting mode” as it tries to avoid the closure of ArcelorMittal’s operations in KwaZulu Natal and near Johannesburg.
The closure of the plants, which supply rail, roads and bars to the construction, mining and manufacturing sectors as well as components for the automotive industry, has been deferred twice as the company and the government sought to save the 3,500 jobs directly under threat.
In March, the steel company postponed the closures to September 30 after the state-owned Industrial Development Corporation injected 1.683 billion rand ($94.22 million) in cash.
Imports have flooded the domestic market, taking up more than 35% of local steel demand, while freight rail service “deteriorated to its lowest levels ever, resulting in significantly elevated operating risk,” the steelmaker’s statement said.
ArcelorMittal South Africa expects to report a headline loss per share between 0.89 rand and 0.99 rand ($0.0498-$0.0554) for the six months to June 30, narrowing its loss from 1 rand per share during the same period last year.
Sales volumes declined by about 10% in the first half of 2025 compared to last year, the company said.
ArcelorMittal South Africa will release its half-year financial results on July 31.
($1 = 17.8620 rand)
(Reporting by Nelson Banya)
