ArcelorMittal to mothball S Africa plant to curb loss

Bloomberg

ArcelorMittal South Africa Ltd will mothball its Saldanha Works plant to curb losses, as raw-material costs and regulated prices mean the operation can no longer effectively compete in steel export markets.
Saldanha, on South Africa’s west coast, will be placed on care and maintenance in the first quarter of 2020 and its domestic customers will be served from another plant.
The closure will affect 550 direct employees and about 400 contractors.
The company, controlled by the world’s biggest producer, ArcelorMittal, said in September it was reviewing the financial sustainability of major operations. The South African producer in July this year announced plans to cut 2,000 jobs.
The country’s steel industry faces a “dire situation,” the company said, as it faces high costs for electricity and raw materials, and weak economic growth in Africa’s most industrialised economy. The global steel industry is also struggling, and ArcelorMittal warned last week demand is continuing to weaken.
Saldanha, once an ambitious partnership between South Africa’s government and industry, is suffering severe financial losses, which are forecast to continue for the foreseeable future, the company said. “Over the years, that structural cost advantage has been eroded and Saldanha can no longer sustainably and effectively compete in these markets,”the firm said.