Nov 28 (Reuters) - ArcelorMittal South Africa on Tuesday said it plans to close its long steel operations due to weak demand and persistent infrastructure problems, potentially impacting 3,500 jobs.
The company's long steel unit produces fencing material, rail, rods and bars used in the construction, mining and manufacturing sectors. ArcelorMittal also produces foundry, flat steel and tubular products.
The South African unit of the world's No.2 steelmaker ArcelorMittal said steel consumption in Africa's most advanced economy has fallen 20% over the past 7 years, due to limited infrastructure spend and project delays.
South Africa's persistent rail logistics problems and an intensifying electricity crisis had also added costs to the business, ArcelorMittal South Africa said in a statement.
"In the circumstances, the ArcelorMittal South Africa Board and Management have had no option but to embark on a process that contemplates the wind down of the Company's Longs Business, which for now may be placed in care and maintenance," the company said.
ArcelorMittal South Africa said the 3,500 jobs that could be affected include full-time staff and contractors.
The company slumped to a 448 million rand headline loss in the first half to June 30, compared with a 3 billion rand profit in the same period of the previous year, on the back of South Africa's electricity crisis, high inflation and weak demand from key steel-consuming sectors.
(Reporting by Nelson Banya, Editing by Louise Heavens)
