ArcelorMittal prepares for S. Africa long steel closure

ArcelorMittal South Africa (AMSA) warned that operational steps would need to be taken soon ahead of the planned September closure of its long steel business, if the government doesn’t provide further emergency support.

South Africa’s government has provided ZAR1.7bn ($90m) in emergency funding that has allowed AMSA to keep its loss-making Newcastle and Vereeniging long steel units running for the past six months. The money is due to run out at the end of August.

AMSA “may have no option but to take certain operational steps to prepare for the wind down process, well in advance of 30 September 2025,” if no further emergency support is provided, the steelmaker said on 14 July.

The business unit has struggled due to weak demand, tough domestic competition, cheaper imports, high power tariffs and logistical headaches. The situation has not improved significantly, despite government promises.

“High imports continue to flood into the domestic market,” AMSA said. “Transnet’s rail performance deteriorated to its lowest levels ever, resulting in significantly elevated operating risk and unaffordable additional cost being borne by the company.”

AMSA’s ailing operations have already trickled down to Assmang’s Beeshoek mine, AMSA’s sole iron ore supplier, which is also on the verge of closure.

AMSA, which is expected to release its latest quarterly results on 31 July, forecast headline earnings per share for the six months ending 30 June would improve slightly to around ZAR0.89-0.99 ($0.05-0.06) from ZAR1.00 ($0.06) a year ago.