- Africa's largest steelmaker posts loss that balloons 23 times
- Failure to adopt import protection threatening steel industry
ArcelorMittal South Africa Ltd. said it expects the country to adopt tariffs as a safeguard against cheap imports before the end of next month as the continent’s largest steelmaker posted an annual loss that ballooned 23 times from a year earlier.
AMSA, as the Vanderbiljpark-based unit of ArcelorMittal is known, counts among the country’s steelmakers who have said they’re struggling to compete with an increase in subsidized Chinese supplies at prices as much as 25 percent below local production costs, while contending with increased input costs that exceed inflation. As a consequence, AMSA has said it’s writing down the value of its plants and iron-ore assets by 4.3 billion rand ($270.4 million) while reviewing the future of some of its operations.
AMSA and other steelmakers applied for import tariffs and duties against dumping while asking the government to source its requirements only from local producers, the company said in a statement on Friday. AMSA’s loss excluding one-time items for the year through December was 13.11 rand a share, compared to a loss of 0.57 rand a year earlier, it said.
The company “remains of the view that these interventions have a reasonable prospect of returning the company to profitability in the medium term,” AMSA said, referring to the protection and designation measures. Without the adoption of such measures, “the company and the steel industry will need to undertake significant structural changes.”
AMSA has chosen Likamva Resources Pty Ltd. as its preferred black economic empowerment shareholder and has started talks on a possible deal, the steelmaker said in a separate statement. The full terms of a deal will be concluded in the second quarter, it said.
South Africa requires companies to obtain shareholding by black-owned entities as a way of compensating for economic disparities created under apartheid.
AMSA Chief Executive Officer Paul O’ Flaherty will step down at the end of Friday while CFO Dean Subramanian will act in his place until a replacement is appointed, the company said.