By Helena Smolak

 

ArcelorMittal in South Africa said it is contemplating winding down operations at its Newcastle and Vereeniging long-steel production sites, and a significant restructuring which could affect 3,500 jobs.

The South African subsidiary of the Luxembourg-based steelmaker said it had no option but to start contemplating the wind-down after other cost-saving initiatives couldn't outweigh weak demand and other structural problems affecting the market.

ArcelorMittal South Africa said the wind down would exclude the Newcastle site coke batteries.

"In the circumstances, the ArcelorMittal South Africa board and management have had no option but to embark on a process that contemplates the wind down of the company's longs business, which for now may be placed in care and maintenance," the company said in a statement Tuesday.

In addition, the company said that it is considering a significant restructuring which could affect 3,500 jobs.

"The remaining business, after the wind down, will be on a more sustainable financial footing and able to invest the appropriate capital in produce development and available growth prospects," ArcelorMittal South Africa CEO Kobus Verster said.

The news sent shares in South Africa tumbling down more than 7% in early trading Tuesday, their lowest level since January 2021.

 

Write to Helena Smolak at helena.smolak@wsj.com

 

(END) Dow Jones Newswires

November 28, 2023 07:42 ET (12:42 GMT)

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