ArcelorMittal SA: Protect us against Chinese dumping or Vereeniging closes

A logo of ArcelorMittal steel group is seen at the Les Chantiers de l'Atlantique shipyards in Saint NazaireShares in the world’s largest producers of steel are trading around their lowest levels in more than a decade amid a global supply glut and the company has said that South Africa’s high labour costs, poor rail infrastructure and slowing economy have forced it to consider cutting back operations and jobs.

“This company has made losses for five or six years. I don’t have an open chequebook,” Chief Executive Paul O’Flaherty said.

He confirmed that steel baron Lakshmi Mittal was in South Africa in June, where he briefed President Jacob Zuma’s government on the challenges facing the industry and asked for intervention to counter cheap Chinese imports.

ArcelorMittal South Africa had applied for tariff protection of between 10 percent and 15 percent and O’Flaherty said the government appeared “sympathetic” to the company’s request.

The steelmaker said it could be forced to shut its Vereeniging mill on the outskirts of Johannesburg, which employs 1,200 workers.

“The announcement of a potential closure of Vereeniging is not putting a gun to anybody’s head. It is not a statement. It’s a reality of business,” O’Flaherty said. “When you have got bleeding, you must stop the bleed.”

ArcelorMittal rival Evraz Highveld Steel and Vanadium has applied for protection from creditors and plans to reduce its 2,200 workforce by about a half.

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