ArcelorMittal South Africa Ltd. is seeking a R3.1 billion rescue package to stave off the closure of crucial steel mills in the country, Sunday Times reported.<\/p>\n\n\n\n
The funds from Industrial Development Corp. \u2014 a national finance institution that has a 6.4% stake in the company \u2014 would prevent the full idling of its long-steel plants slated for the second quarter, staving off the loss of about 3,500 direct and indirect jobs, the newspaper reported, citing people it didn\u2019t identify.<\/p>\n\n\n\n
The company known as AMSA initially planned to shutter the Vereeniging and Newcastle facilities at the end of January, and later postponed this by a month to fulfill orders.<\/p>\n\n\n\n
Rescue talks with the government have failed to yield results and the operating environment has deteriorated amid high power and transportation costs and cheaper imports.<\/p>\n\n\n\n
AMSA wants antitrust laws relaxed to enable it to merge with smaller mills and lower electricity prices from state-owned utility Eskom Holdings SOC Ltd., the newspaper reported, citing the people.<\/p>\n\n\n\n
The steel producer isn\u2019t in a position to communicate further on the matter, spokesperson Tami Didiza said in an emailed response to questions.<\/p>\n\n\n\n
The IDC didn\u2019t immediately respond to requests for comment outside of regular business hours.<\/p>\n\n\n\n
The Department of Trade, Industry and Competition is looking at options to retain the capacity to make long-steel products in the country should AMSA be unable to operate the plants, Sunday Times said, citing Tebogo Makube, the department\u2019s acting deputy director-general of industrial development.<\/p>\n\n\n\n
The DTIC isn\u2019t able to speak on the issue at \u201cthis critical stage\u201d of negotiations and will likely release a statement when talks conclude, spokesman Bongani Lukhele said by email.<\/p>\n\n\n\n
The government provided AMSA R380 million to keep operations running and the Newcastle plant could operate for another year should more money come, the newspaper reported, citing Makube.<\/p>\n\n\n\n
AMSA has applied to the Unemployment Insurance Fund for money to partly cover the salaries of the 3,500 affected workers, Sunday Times said, adding this would cost about R2 billion.<\/p>\n\n\n\n
The IDC provided the steel producer with R1.2 billion of working capital last month, the newspaper said, citing Tshepo Ramodibe, the lender\u2019s head of corporate affairs.<\/p>\n","protected":false},"excerpt":{"rendered":"
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