Double Blow for South Africa's Metals Industry

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--South Africa's metals and minerals sector is facing a double hit with the loss of more than 6,400 jobs as ArcelorMittal (Luxembourg, Luxembourg) and Glencore plc (Baar, Switzerland) move ahead with plant closures and restructuring.

Job losses at ArcelorMittal's operations may hit 4,000, representing half of its South African workforce, and up from the 3,500 already confirmed as the steelmaker announced the closure of its long steel plants at Newcastle and Vereeniging. The higher figure has been revealed by the Solidarity Union, which claimed the cuts will also hit the company's flagship Vanderbijlpark flat steel production plant.

At the same time, Glencore is instigating a "retrenchment (layoff) process" at its Rustenburg ferrochrome smelter and vanadium operations in South Africa, which could lead to the loss of more than 2,400 jobs, according to Solidarity. In a statement, Glencore confirmed the start of the so-called S189 process, informing employees, unions and other stakeholders. "Glencore Ferroalloys (''Glencore'') confirms that the significant economic pressures facing its South African Ferrochrome and Vanadium operations continue, with production at the Ferrochrome smelters operated by the Glencore Merafe Chrome venture remaining suspended. Whilst we continue to focus on identifying and implementing measures to mitigate the very weak operating environment, these will only take effect once the external environment significantly improves, which is unlikely to be in the near to medium term." As part of the process, it confirmed that it will "also proceed with further streamlining and restructuring of support functions within the Mining division, at Rustenburg and Lydenburg Smelters, Head Office and Shared Services functions as anticipated."

The decisions by both companies will impact some of their planned project spending. Industrial Info is tracking 13 ArcelotMittal projects and 10 Glencore projects in South Africa worth more than US$730 million in combined investment value. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here and here for the reports.

Glencore's operations have been struggling since May, when it suspended production at the Boshoek and Wonderkop smelters and implemented a temporary suspension of the Lion smelter. Layoffs are expected to hit hardest at the Boshoek and Wonderkop operations. Willie Venter, deputy general secretary of the Solidarity union, said that 10 of Glencore's 22 furnaces are now either permanently or temporarily closed.

The closure of ArcelorMittal's long steel business and the 4,000 layoffs expected across its South Africa operations is a major blow to the steel sector. It comes as the company has had to deal with many infrastructure problems from secure power supplies to transportation. "This closure is the direct result of the government's inability to create a competitive industrial environment and to find and implement real solutions with a sense of urgency where such solutions fall within its control," Venter wrote. "For years, our steel industry has been plagued by power crises, a failed rail and ports system and a government that simply cannot make the policy decisions to protect our industries. Now the jobs and income of thousands are at stake. If major companies such as ArcelorMittal South Africa (AMSA) fail to stay afloat, the government should realise that the country is on the brink of industrial disaster."

Speaking on its decision to shut the long steel business, ArcelorMittal confirmed: "In the absence of a sustainable solution, the final wind-down of the longs business remains scheduled for 30 September 2025."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).