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South Africa’s steel industry continues to take a knock as ArcelorMittal South Africa (AMSA) has confirmed that it will be undertaking an orderly and commercial wind-down of steel operations at Saldanha Works, ultimately placing the operation on care and maintenance.

AMSA states that Saldanha Works, which has lost its structural competitive cost advantage to effectively compete in the export market, mainly due to raw material and regulated prices, is suffering severe financial losses and these are forecast to continue for the foreseeable future.

The process of winding down Saldanha’s steel operations to a state of care and maintenance will begin immediately and is anticipated to be completed during the first quarter of 2020,” – AMSA.

ArcelorMittal South Africa’s Saldanha Works operation.

“This difficult decision was taken in the context of constructive ongoing engagements with key stakeholders, including government and organised labour, to find alternative solutions to the dire situation in the South African steel industry.”

Realising the importance of Saldanha to the region, and as far as reasonably possible, the company will make every effort to minimise the impact of the orderly and commercial wind-down.

It states that contractual domestic sales orders from Saldanha will now be fulfilled from its Vanderbijlpark Works.

“Progress is being made with the next phase of the strategic assset 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. Exploration of the benefits of a concentrated operating footprint will be of foundational importance during this phase of the review.”

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