More than 2 000 jobs are on the line as Africa’s largest steelmaker, ArcelorMittal SA, confirmed the immediate start of a restructuring phase at its Saldanha steel operation.
The steel manufacturing giant today decided to put its Saldanha operation into care and maintenance after an operational review concluded the plant was no longer profitable.
According to Kobus Verster, CEO of ArcelorMittal South Africa, the plant can no longer be sustained under current circumstances.
“As the country’s largest primary steelmaker, we have an obligation to ensure we play our part in ensuring the sustainability of the South African steel industry, and that means that we have to make tough decisions,” he said.
“The Saldanha operations were founded and built on the premise of low input costs, which gave the operation a competitive cost advantage in export markets.”
Additionally, Verster highlighted the rising costs of raw materials and regulated prices for the decline in operations at the Saldanha plant.
“Unfortunately, over the years that structural cost advantage has been eroded and Saldanha can no longer sustainably and effectively compete in these markets, mainly due to raw material and regulated prices. Saldanha has incurred substantial losses in the past and the short- to medium-term outlook remains bleak.”
The winding down process at the plant, which was opened in 1998 and has an annual capacity of one million tons of steel, is set to be concluded during the first quarter of 2020, with Vanderbijlpark Works set to inherit all contractual domestic sales orders from Saldanha.
