The good news was announced on Tuesday by CEO Kobus Verster, who earlier this year gave a valiant reprieve – in the face of enormous economic pressure – from permanent shut down to the long steel production centres of the steel giant in Vereeniging, and Newcastle in KwaZulu/Natal (KZN).
In Emfuleni and the Vaal, home to ArcelorMittal South Africa, more than 200 full-time jobs and possibly thousands of contractor jobs will be saved in Gauteng’s most economically-depressed region.
In KZN, Newcastle has been saved from ghost-town status and almost complete economic catastrophe by the decision.
This will in turn relieve pressure on the local Emfuleni and Newcastle economy and municipal services, which are already suffering from severe revenue pressures and lagging revenue collection rates.
Verster and his top management team are said to have “moved heaven and earth” to retain their long steel production capacity, even earlier extracting a promise from National Government to remove or relieve persistent bottlenecks plaguing steel production and distribution such as Transnet.
Verster’s carefully-timed move came close on the heels of President Cyril Ramaphosa’s announcement of a Government of National Unity (GNU) over the past weekend, which has raised confidence in the South African economy domestically and internationally.
Despite a highly-adverse international steel cycle situation and very low domestic steel demand, Verster has also been given credit for also sticking to ArcelorMittal South Africa’s Social Investment strategy in Emfuleni on road maintenance, alternative energy and the environment.
Verster highlighted the following short-term sustainability factors ArcelorMittal would focus on to make its general operations and Long Steel Division more viable, including:
* Scrap Advantage: Government did not renew its ban on scrap metal exports in 2024.
* Improved Port and Rail efficiency by Transnet.
* Trade normalisation, with a 9% safeguard duty on certain hot-rolled imports expected.
* Labour Discussions – disappointingly, Verster says organised labour had not agreed to measures that would have enhanced ArcelorMittal South Africa’s competitiveness.
* Working Capital: A 12-month secured working capital facility of R1 billion was obtained to support ongoing initiatives and continued operations.
