The South African unit of the world's second-largest steelmaker ArcelorMittal said on Tuesday it plans to close its long steel operations due to weak demand and persistent infrastructure problems, potentially affecting 3,500 jobs.
The company's Long Products division produces fencing materials, rails and rods used in the construction, mining and manufacturing sectors. ArcelorMittal also produces cast steel, sheet steel and pipe products.
ArcelorMittal South Africa said steel consumption in Africa's most advanced economy has fallen 20% over the past seven years due to limited infrastructure spending and project delays.
“In the current circumstances, the board of directors and management of ArcelorMittal South Africa have had no choice but to embark on a process that involves winding down the company's long-bar metals mining business, which may currently be placed in receivership and service," the company said.
The company said in a statement that the 3,500 jobs that may be affected include full-time employees and contractors.
The company's total loss for the first half of the year to 30 June amounted to R448 million, compared with a profit of R3 billion in the same period the previous year, amid South Africa's energy crisis, high inflation and weak demand from key producers.
