ArcelorMittal SA plunges 27% after plant closures

ArcelorMittal South Africa, which announced the winding up of its long-steel business on Monday, will now refocus its efforts on its flat-steel business and new opportunities such as the restart of operations at its Thabazimbi iron ore mine in Limpopo.

- Liesl Peyper

CEO Kobus Verster told a virtual media roundtable on Monday that the loss-making steel company could no longer afford that its long-steel business "drags down" its other operations.

The company announced the closure of its long-steel production business at its Newcastle and Vereeniging plants as well as its Amras (ArcelorMittal Rail and Structures) unit in a media statement on Sens early on Monday morning.

This saw its share price plummet by more than 27%, closing at R1.09 on Monday.

‘All avenues’ explored

ArcelorMittal notes that the final number of retrenchments as a result of the closures will depend on "agreed alternatives and consultation outcomes", but it is envisaged that about 3 500 direct and indirect jobs may be affected.

Steel production at both plants is expected to stop by late January.

According to Verster, the closure of the long-steel business will "remove" around one million tons of the product from the market.