ArcelorMittal gives government one month to save 100,000 jobs

The wind-down of ArcelorMittal South Africa’s longs business – which could lead to 100,000 job losses – has been delayed for a month.

ArcelorMittal South Africa had a very challenging year in 2024, facing its worst challenge since the 2008/09 financial crisis.

The company said this comes as international steel-to-raw material price spreads remain under pressure and countries rush to protect their steel industries against unfair trade and policy practices.

Earlier this year, the company confirmed that it will go through with plans to shutter its long steel business.

This decision was made because the business was running at significant losses and was threatening the company’s sustainability.

However, in its results released on Thursday, 6 February, ArcelorMittal said the wind-down of its longs business – initially scheduled to start by end-January 2025 – will be delayed by one month.

The company said this delay will enable:

• The fulfilment of the higher-than-anticipated outstanding order book 
• Continuing discussions with the South African government on the future of the longs business, with an announcement expected in the second half of February 2025

This extension was made possible by R380 million in funding support from the Industrial Development Corporation in the form of a shareholder loan.

ArcelorMittal’s results also revealed a 7% drop in revenue to R38.6 billion due to a 6% decline in sales volumes and a 4% drop in realised steel prices.

The company also reported an EBITDA loss of R1.8 billion, compared to a R56 million profit in 2023. Major losses were due to blast furnace instability and inventory disposals.

ArcelorMittal’s headline loss deepened to R5.1 billion from R1.89 billion in 2023. The net loss for the year was R5.8 billion, significantly worse than the R3.9 billion loss the prior year.

The company also said its longs business added R1.1 billion in operational EBITDA losses.

While there is some hope that ArcelorMittal’s longs business may be saved, the company said it does not anticipate a significant recovery in the steel market for the first half of 2025. 

“Consequently, actions by the South African Government to support the industry and protect it against unfair trade and policy practices are vital,” the company said. 

“The longs business will only continue with financial support as the company does not have the ability to bear any further financial risk associated with the continued operations of that business.”

The loss of ArcelorMittal’s longs business would be devastating to the local steel market and the economy as a whole.

ArcelorMittal is the largest steel producer on the African continent, and South Africa could lose an estimated 100,000 jobs if the company shutters its longs business.