ArcelorMittal South Africa said on Monday that they will engage with government and unions to try and stop the closure of its long steel business operations.
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ArcelorMittal share price was not great and was valued at R1.46 on Monday.
At 9.40am on Tuesday the share price was valued at R1.40.
Over the last seven days, the share price has lost around 5.19%; over the last 30 days, the share price has lost around 10.98% in value.
In late November the steel giant said that it planned to shut down operations due to a lack of demand and infrastructure issues, including load shedding.
The company said that over the last seven years, demand for its steel products fell by 20%.
“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,” ArcelorMittal said back in November.
The 3,500 possible job losses will be felt at its Newcastle and Vereeniging steel manufacturing operations.
The firm’s long steel unit produces fencing material, rails, bars and rods that are needed in the mining, construction and manufacturing industries.
In a trading update on Monday, the steel giant said that government, its customers and labour unions have expressed concern over the closure.
“Consultations to avert the closure had been constructive and are ongoing.”
The company went on to say that "finding solutions to the structural shortcomings is complex".
"Reversing the closure decision holds substantial risks and requires the commitment of, at a minimum, the company, its customers and suppliers, the government, state-owned enterprises and our employees," it said.
ArcelorMittal South Africa reiterated that it did not need any preferential treatment or subsidies.
The company said that it “required government to ensure that a level playing field exists for South Africa's primary steel producers, by addressing the structural constraints affecting the steel industry”.
10,000 JOBS COULD BE LOST IN THE MINING SECTOR
In late November, the National Union of Mineworkers (NUM) said the country could face major job losses in the coming months.
The union said that it was shattered and disappointed by the high levels of possible job losses due to retrenchments in some of the companies, in particular mining.
“To this date, close to 10,000 jobs stand to be lost between now and January 2024,” NUM said.
This is a huge blow, according to the union, given how much unemployment the country is facing.
A number of precious mental mining companies have been looking at cutting thousands of jobs in SA.
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