ArcelorMittal South Africa job cuts could rise above 4,000, union says

(Reuters) -ArcelorMittal South Africa (AMSA) is planning to lay off 4,000 workers, nearly half its workforce and more than initially expected, with cuts now set to extend to its main Vanderbijlpark plants, a union said on Monday.

The steelmaker previously announced plans to shut its long steel plants at Newcastle and Vereeniging this month, cutting 3,500 jobs, as talks with the government have failed to provide an alternative solution.

AMSA said it was "limited in what we can say in the public domain given the complexities of the matters under discussion and a cautionary announcement we issued recently", adding that "certain processes are still ongoing."

The company produces some 2.4 million metric tons of steel annually, about 4% of group output.

The Solidarity union said AMSA had told employees that it was preparing "mass retrenchments involving more than 4,000 jobs".

Its statement said the cuts had been expanded to include Vanderbijlpark - AMSA's flagship operation, making flat steel.

The company has been reporting losses since 2023 and posted a half-year headline loss of 1.0 billion rand ($56 million) on persistently low sales volumes and low prices.

AMSA has twice deferred closing its long steel operations, which are buckling under the pressure of weak local demand, high electricity tariffs, poor freight logistics, competition from local scrap recycling mills and imports from China.

The union accused the government of dragging its heels in seeking solutions.

AMSA had asked the government to lower scrap export duties, which it says give recyclers an unfair advantage, and to impose tariffs on imports. It also sought favourable electricity and freight costs from state-owned utilities.

(Reporting by Nelson Banya; Editing by Kevin Liffey)