http://www.businessweek.com/news/2013-02-14/africa-s-biggest-steel-plant-to-partially-shut-a-unit

Bloomberg News

Africa’s Biggest Steel Plant to Partially Shut a Unit

February 14, 2013

ArcelorMittal South Africa Ltd. will shut steelmaking operations at Africa’s biggest plant producing the metal for three months after a fire, a union official said.

The shuttering of operations at the Vanderbijlpark plant south of Johannesburg won’t lead to layoffs as workers will be redeployed, Deon Reyneke, the head of metal and engineering at the Solidarity labor union, said in an e-mailed response to questions after meeting with company officials.

The Vanderbijlpark-based steelmaker declared force majeure after the Feb. 9 blaze, meaning it’s unable to meet obligations to clients. It’s seeking supplies from its other plants. Julian Gwillim, a spokesman, wasn’t able to comment on any shutdown.

“An assessment of the plant still has to be concluded,” he said, adding that he couldn’t say when it would be completed. “There are sections of the plant that are operational. We will work with the unions to mitigate any impact on employees.”

Vanderbijlpark Works has two blast furnaces, three electric arc furnaces and three basic oxygen furnaces, according to ArcelorMittal South Africa’s website. Arc furnaces that were closed last year at Vanderbijlpark remain offline, Gwillim said.

The plant employed 4,797 workers and produced 72 percent of flat steel shipped by the company in 2011, or about 2.5 million metric tons, a presentation to investors shows. The company’s Saldanha Works in the Western Cape manufactured 941,000 tons.

Steel Imports

South African steel may be in short supply for about two months because of the incident, Southern African Institute of Steel Construction Executive Director Hennie de Clercq said on Johannesburg-based Talk Radio 702 yesterday.

“Stock levels in the industry are not very high,” De Clercq said. “A lot of steel is coming in by way of imports because of technical problems and reliability of supply.”

Avior Research (Pty) Ltd. cut its estimate for 2013 flat- steel sales at ArcelorMittal South Africa by 22 percent to 2.5 million tons, analyst Sean Ungerer said in a note yesterday. BNP Paribas Cadiz Securities cut the company to hold from buy.

ArcelorMittal rose 0.2 percent to 32.20 rand by the close of Johannesburg trading, reversing earlier losses.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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