The multinational ArcelorMittal said Monday that it would close a rail production factory and two steel manufacturing facilities in South Africa, impacting about 3,500 employment.
Key items utilized in public works and construction, including cables, beams, joists, concrete bars, and railroad tracks, are at issue in this ruling.
“The Company has taken the decision to wind down the Longs Business” in South Africa, ArcelorMittal said in a statement.
The two steel plants to close are in the eastern cities of Newcastle and Vereeniging, south of Johannesburg. The AMRAS rail production subsidiary will also close.
“Newcastle’s coke-making operations will continue, though scaled back to reflect reduced demand,” ArcelorMittal added.
“It is envisaged that approximately 3,500 direct and indirect jobs will be affected.”
The company said low steel prices on international markets due to “record Chinese exports” was a major reason for the move.
“The weak domestic market for Long steel products, coupled with the overcapacity of local and international steel production, has left the business unsustainable.”
The company stated that long steel production would likely stop by the end of January, but a spokeswoman who spoke to AFP stated that other aspects of ArcelorMittal’s operations in South Africa would go on.
About one-third of ArcelorMittal’s business in South Africa is made up of long steel, while two-thirds are made up of flat steel, which is used in the home appliance, automotive, and aerospace sectors.
“Letting these plants close could be potentially catastrophic and it would spell disaster for manufacturing and industrialization of our country,” the National Union of Metalworkers in South Africa warned in a statement.
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