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ArcelorMittal Closes Maputo Rolling Mill
09/15/2009 - ArcelorMittal South Africa confirms the closure of its Maputo rolling mill on September 4. In the 2008 financial year, ArcelorMittal Maputo produced 5150 tonnes at a significant loss for the company.
ArcelorMittal South Africa confirmed the closure of its Maputo rolling mill on September 4.
The company acquired the mill in May 2007 and made considerable investments to refurbish the operations, but ArcelorMittal says that production there never reached sufficient quantities and at appropriate profit margins to justify the relatively high cost of operations. The current high input prices of raw materials and costly electricity tariffs also made the operation unviable, stated the company.
In the 2008 financial year, ArcelorMittal Maputo produced 5150 tonnes at a significant loss for the company.
The closure resulted in 78 jobs being lost at the mill. The process of consultation with the labor authorities, the Plant Workers Committee, affected employees, and their representative trade union was finalized in accordance with the relevant articles of Mozambique’s labor law 23/2007.
ArcelorMittal’s Mozambican customers will be supplied via the company’s South African operations, particularly the long steel operation at Newcastle.
The ArcelorMittal Group stresses that the closure in no way indicates a lack of belief in the economic growth potential of Mozambique, claiming that the country has recorded one of the highest economic growth rates in the world in recent years.
The company’s previously announced plans to build a larger mill in the country also have been postponed due to the economic slump and will be reviewed when stability returns to the global steel market.
