About 3,500 people will lose their jobs, as a result of a cut in ArcelorMittal’s Longs Business.
This includes operations at the Newcastle and
Vereeniging Works, and AMRAS (the rail and structural subsidiary).
ArcelorMittal announced a cut to its Longs Business at the start of the year.
The company said despite extensive
consultation with Government and stakeholders to find viable solutions to sustain the Longs Business, progress was insufficient to avert the wind down.
In addition, it said it faced challenges as a result of weak economic growth, high logistics and energy costs, as well as an influx of low-cost steel imports, particularly from China.
Persistent high logistics and energy costs, combined with insufficient policy interventions (especially those policy decisions made some time ago (namely, the Price Preference System [PPS] and Export Scrap tax) relating to
the substantial subsidisation of scrap-based steelmaking operations to the detriment of the Newcastle Works – which beneficiates South African-sourced raw materials), have left the Longs Business unsustainable.
The Company will now transition the Longs Business into care and maintenance.
Steel production is anticipated to cease by late January 2025, with the wind-down of the remaining production processes completed in Q1 2025.
Kobus Verster, CEO of ArcelorMittal SA, said “it is with deep regret that we must take this difficult decision.
Over the past year, our employees and dedicated management team have shown remarkable commitment and resilience in the face of serious uncertainty. Unfortunately, despite everyone’s best efforts, including significant
engagement with stakeholders, the structural challenges in the Longs Business were not resolved. While this outcome
is deeply disappointing, especially given the economic challenges facing South Africa, we remain focused on securing a sustainable future for the remaining operations.”
Newcastle’s coke-making operations are set to continue, though scaled back to reflect reduced demand.
The company has begun its formal Section 189(3) labour consultation process.
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