ArcelorMittal Mulls Downsizing Africa's Biggest Steel Plant

ArcelorMittal South Africa Ltd. will review the viability of its Vanderbijlpark steel plant, the continent’s biggest, as it seeks to cut costs and compete with Chinese imports. AMSA will complete the study of the loss-making plant by the end of October before deciding on a restructuring plan, the company said Monday in a statement. Separately, it will consider closing part of its Vereeniging operation, which produces specialized steel products. The company will work with employees and unions to find alternatives to job cuts, AMSA said. South Africa’s steelmakers are struggling to cope with a surge of Chinese imports supplied at prices as much as 25 percent below local production costs. A government plan to put a 10 percent import tariff on some steel product "will only assist in the medium- to long-term," AMSA said.

Competitors including Evraz Plc’s local unit and Scaw Metal Group have previously announced plans to cut more than 2,000 jobs.

AMSA will look into closing the Vaal Meltshop and the Forge parts of its Vereeniging plant, a move that could affect 400 employees, it said. Vereeniging’s operating mills may also be merged with the company’s Newcastle Works.

Courtesy : Bloomberg