The company plans to lay off 4,000 employees, with the cuts affecting its flagship asset in the country

ArcelorMittal South Africa (AMSA) plans to lay off 4,000 employees, representing almost half of its workforce in the country, according to the Solidarity trade union. This was reported by Reuters.

This number is higher than initially expected. In addition, the cuts will extend to Vanderbeilpark, AMSA’s flagship flat steel production facility.

The company had previously announced plans to close its long products plants in Newcastle and Vereninging in September this year and cut 3,500 jobs, as negotiations with the government had failed to produce an alternative.

AMSA said the company is limited in its public statements given the complexity of the issues under discussion and the recently published warning notice. They added that certain processes are still ongoing.

ArcelorMittal South Africa produces about 2.4 million tons of steel per year (approximately 4% of the group’s total production). In the first half of this year, AMSA recorded losses of R1 billion ($56 million) due to persistently low sales volumes and low prices.

The company first announced its intention to close its long product plants in November 2023. AMSA twice postponed the closure of plants in Newcastle and near Johannesburg in order to negotiate with the government. Among the reasons for ArcelorMittal South Africa’s losses, the company cites unfair price discounts on scrap metal for local competitors, high electricity prices, limited protection from Chinese imports, and poor rail connections.