ArcelorMittal is significantly downsizing its operations in South Africa, announcing the closure of two of its facilities in 2024, putting 3,500 jobs at risk.
The start of 2024 looks grim for ArcelorMittal employees in South Africa, as two plants are set to close in January. The South African CEO of the company had previously warned against excessive salaries and a 20% decline in local steel demand over seven years.
The company’s financial results were already in poor shape, but two additional factors are further jeopardizing ArcelorMittal. Firstly, the crisis at Transnet, the state-owned freight company, is causing constant deterioration of the rail network due to cable thefts and inadequate maintenance. Ports are also congested due to poor organization.
The second crisis involves electricity shortages. Eskom, the South African state-owned company, is implementing frequent power cuts to prevent a collapse of the electrical grid. This week, electricity is being cut for up to 12 hours per day.
Kobus Verster, the CEO of ArcelorMittal, criticized the government harshly, stating, “It is clear that its mismanagement of state-owned enterprises is causing victims.” For ArcelorMittal, the focus now is on preserving the remaining 6,000 jobs.