Africa's largest steelmaker has been battling low demand and high input costs
Arcelor Mittal SA, which has already cut 1,000 jobs, plans to shed hundreds more as it battles low steel demand and rising costs.
This adds to the country’s rising unemployment crisis. Only 42% of SA’s adults are employed, according to the Centre for Development and Enterprise’s latest report on unemployment. Speaking after the release of results for the year ended December 31, Verster said the company had decided not to close the Newcastle plant. “When we looked at the closure of Newcastle, we came to the conclusion that the impact of that would be substantial on the domestic market. Financially, you could say — shut it down. But there is still a cost problem,” he said.
However, Verster said primary steelmaking operations at the Newcastle plant would continue. Output from the plant would service the domestic and Africa markets. “The cost base of the business does not really justify exports in these market conditions. We are far from most export markets and our focus is mainly East Africa. So we are not focusing on exports,” Verster said.
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