ArcelorMittal SA pleads for urgent government action after posting R1.2 billion loss

VAAL TRIANGLE - SA's biggest steelmaker, ArcelorMittal SA, warned this week that its hopes for a gradual recovery in the third quarter were dashed by a global downturn in steel demand. The group posted a first half loss of R1.2 billion. Chinese exports have also jumped, putting pressure on global prices, while local demand has weakened as well. In July the company agreed to defer the closure of its long steel business, including its Newcastle and Vereeniging plants, saying it would wait for promised improvements in rail and port performance. The company said while SA's government has shown commitment to supporting its struggling long steel business, this hasn't been fast enough, and it has called for urgent protective measures. AMSA said it has taken steps to avoid the closure of the longs business thus far as it will have far-reaching effects, including: a negative impact on the downstream, direct and indirect job losses, an increase in imports and a loss of critical local manufacturing and opportunities for localisation and beneficiation. However, if these issues are not addressed as a matter of urgency, it will only be a matter of time before the viability of the entire business will be at risk and the Company will need to take steps to ensure that this does not happen.

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