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ArcelorMittal SA to Shut Saldanha Steel Plant

Steel News - Published on Tue, 12 Nov 2019

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Africa’s largest steelmaker ArcelorMittal SA has decided to put its Saldanha operation into care and maintenance after an operational review, with the group concluding that Saldanha has lost its structural competitive cost advantage, due mainly to high raw material costs and regulated prices. Mr Kobus Verster, Chief Executive Officer of ArcelorMittal South Africa, said “The Saldanha operations were founded and built on the premise of low input costs, which gave the operation a competitive cost advantage in export markets. Unfortunately, over the years, that structural cost advantage has been eroded and Saldanha can no longer sustainably and effectively compete in these markets, mainly due to raw material and regulated prices. Saldanha has incurred substantial losses in the past and the short- to medium-term outlook remains bleak.”

ArcelorMittal said “Despite the various initiatives that have been successfully implemented by the company to manage costs and optimise efficiencies, ArcelorMittal South Africa’s Saldanha Steel operation remains under extreme pressure. The board and management, which for some time have been considering various options to ensure the longer-term sustainability of the company, formally announced a strategic asset footprint review in September 2019. The outcome of the first phase of the review is to immediately begin the process of winding down Saldanha’s steel operations to curb any further losses. The process is expected to be completed during the first quarter of 2020.”

It added “Progress is being made with the next phase of the strategic asset footprint review, focusing on the Newcastle operations and certain of the long steel products rolling facilities with the objective of sustainably improving their structural cost position and service offering. Exploring the benefits of a concentrated operating footprint will be important during this phase of the review.”

Saldhana plant was commissioned in 1998 and has a capacity of about 1.2-million tonnes annually. The plant is distinguished by merging leading edge technologies to produce high quality ultra-thin Hot Rolled Coil of 1.6mm

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Posted By : Rabi Wangkhem on Tue, 12 Nov 2019
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