South Africa\u2019s government is locked in crisis talks with the local unit of ArcelorMittal SA to decide the fate of the company\u2019s loss-making construction-steel mill, people familiar with the matter said. <\/p>\n\n\n\n
The government\u2019s trade department and one of its state-development banks, the Industrial Development Corp. is in discussions with ArcelorMittal South Africa Ltd. about the potential closure of the Newcastle mill, said the people, asking not to been identified because the discussions aren\u2019t public. <\/p>\n\n\n\n
The operation located in the eastern province of KwaZulu-Natal makes steel grades used in the country\u2019s crucial automotive, mining and construction industries.<\/p>\n\n\n\n
On April 1, the company said the IDC \u2014 its biggest shareholder after its parent \u2014 would conduct a due-diligence exercise with a view to taking a bigger stake in the firm known as AMSA.<\/p>\n\n\n\n
A decision could emerge in coming days and the mill is hemorrhaging cash, with the entire group being unprofitable, the people said. <\/p>\n\n\n\n
ArcelorMittal has set a date of 30 September for its closing along with another mill in Vereeniging, which also produces so-called long products.\u00a0<\/p>\n\n\n\n
That\u2019s the latest deadline for the closure of the plants, which AMSA first said it intended to shutter in November 2023. <\/p>\n\n\n\n
This would affect 3,500 direct jobs and tens of thousands more in industries that depend on the mills. The steel grades aren\u2019t made by local competitors and would have to be imported.<\/p>\n\n\n\n
The trade department \u201chas been in ongoing discussions with Amsa on the potential closure of Newcastle,\u201d it said in a response to questions. <\/p>\n\n\n\n
\u201cSince the beginning of this process, the department\u2019s objective has been to maintain the country\u2019s long-steel capacity.\u201d<\/p>\n\n\n\n
AMSA, which didn\u2019t respond to a request for comment, on 11 August reiterated that unless a solution is found, the mills will be closed.<\/p>\n\n\n\n
The company has said unfair discounts on the price of scrap metal used by local competitors \u2014 who produce some of the more basic products made by Amsa \u2014 are among the causes of its losses. <\/p>\n\n\n\n
The steel producer has also complained about high power prices, limited protection against steel imports from China and a poorly run state-owned rail service. <\/p>\n\n\n\n
The company\u2019s stock has declined 31% this year in Johannesburg to R0.93, giving it a market value of R1.06 billion, down from a peak of R116 billion in 2008.<\/p>\n\n\n\n
In its most recent financial year, its revenue was almost R40 billion.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
South Africa\u2019s government is locked in crisis talks with the local unit of ArcelorMittal SA to decide the fate of the company\u2019s loss-making construction-steel mill, people familiar with the matter said.\u00a0<\/p>\n","protected":false},"author":59,"featured_media":805758,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[19235,625],"class_list":["post-834804","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-amsa","tag-idc"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=834804"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834804\/revisions"}],"predecessor-version":[{"id":834810,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834804\/revisions\/834810"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/805758"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=834804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=834804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=834804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}