PARIS, Jan 7, (V7N) – Multinational steel giant ArcelorMittal has announced plans to close two major steel manufacturing plants and a rail production facility in South Africa, impacting approximately 3,500 jobs. The move, attributed to weak domestic demand and global market pressures, will halt the production of critical construction and infrastructure materials, including wires, beams, concrete bars, and railway tracks.

The closures will affect facilities in Newcastle and Vereeniging, both located in eastern South Africa, as well as the AMRAS rail production subsidiary. While coke-making operations at Newcastle will continue on a reduced scale, production of long steel is expected to cease by the end of January.

ArcelorMittal cited the global steel market slump, driven by "record Chinese exports," and an oversupply of steel as primary factors behind the decision. "The weak domestic market for Long steel products and the overcapacity of local and international production has left the business unsustainable," the company stated.

The Longs Business segment, which accounts for about a third of the company's operations in South Africa, has struggled compared to the more profitable flat steel segment used in automobiles, aeronautics, and appliances. Despite the closures, other parts of ArcelorMittal's South African business will continue to operate.

South Africa’s National Union of Metalworkers criticized the decision, warning of dire consequences for the country’s manufacturing sector. "Allowing these plants to close could be potentially catastrophic and would spell disaster for industrialization in our country," the union said in a statement.

The closures are expected to have significant socio-economic implications, as the loss of 3,500 direct and indirect jobs could exacerbate unemployment in an already struggling economy.