ArcelorMittal SA will begin ramping down long steel operations during January

VAAL TRIANGLE - ArcelorMittal South Africa (AMSA) says formal Section 189 negotiations, with regard to the closure of its long steel operations in Vereeniging and Newcastle, were likely to start either later this week or early next week. CEO Kobus Verster says operations will begin ramping down during January, when they are scheduled to stop receiving steelmaking materials, such as iron-ore. Verster provided this bleak assessment following the JSE-listed company’s announcement that it would be initiating consultations with unions and customers on the closure of its operations in Newcastle and Vereeniging, as well as ArcelorMittal Rail and Structural, which relies on intermediate products currently produced at Newcastle. Verster told Engineering News that contact had also been made with the leadership of the company’s two recognised unions, being the National Union of Metalworkers and Solidarity, and indicated that formal negotiations were likely to start either later this week or early next week, with Section 189 retrenchment notices expected within days. Verster argued that, while high electricity and logistics costs and the unreliability of both utilities were aggravating factors, the competitiveness of the long-products business had been eroded by weak demand and a structural over-supply. It had been further amplified by what he described as an artificial competitive advantage provided to electric-arc furnaces (EAFs) because of government’s prevailing scrap policy.

PHOTO: (Moneyweb - Kobus Verster)