JOHANNESBURG (Reuters) -Steel producer ArcelorMittal South Africa’s shares fell more than 15% on Monday after the company said it would proceed with the closure of its loss-making long steel business.
The closure of the operations has been on the cards since November 2023 amid prolonged weak economic conditions, logistics and energy challenges and competition from low-cost imports.
The company said shutting the plant, which produces fencing material, rail, rods and bars used in the construction, mining and manufacturing sectors, could affect about 3,500 direct and indirect jobs.
“The company is at a point where any further delay could affect the sustainability of the company and therefore, a decision cannot be pushed back any further,” Luxembourg-based ArcelorMittal SA’s South African division said in a statement.
Last July, the company shelved plans to close the long steel operations as it pursued initiatives to restore profitability. Initial signs of recovery in international steel prices following Chinese stimulus measures were short-lived, it said.
The company expects a headline loss per share of between 4.06 rand ($0.2164) and 4.41 rand for the year ended Dec. 31, from a 1.70 rand loss one year earlier.
($1 = 18.7628 rand)
(Reporting by Tannur Anders, Sfundo Parakozov and Nelson Banya, Editing by Louise Heavens and Bernadette Baum)
