BREAKING NEWS: ArcelorMittal South Africa today announced that 3,500 jobs will be affected by its decision to put its major Newcastle and Vereeniging long steel operations in care and maintenance due to a lack of demand. The steelmaker cited high logistical and transportation costs, energy prices and load shedding as reasons for giving up the operations. This comes after years of aggressive cost cuts to save the business, which ultimately proved fruitless as SA's steel consumption has declined 20% over the past seven years. ArcelorMittal said it tried to save the operations by aggressive cost-cutting, increased raw material cost savings and productivity initiatives over recent years. However, CEO Kobus Verster said despite these best efforts, the initiatives were unable to counteract the cumulative effect of a slowing economy and a difficult trading environment. The group's coke batteries at Newcastle, which produces metallurgical coke for use at the Vereeniging Works, will remain operative. The company said every effort will be made to manage down the number of jobs affected. It said the conclusion and number of affected posts will be finalised within a detailed wind down implementation plan that is being developed.
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