A worker stands in front of a rolling mill in a factory belonging to ArcelorMittal, South Africa's biggest steel maker. Photo: Reuters
London – Steel maker ArcelorMittal South Africa on Thursday announced that it was in talks to borrow R3.5 billion as part of a capital-raising plan.

The country’s biggest steel maker, however, did not specify what the funds would be used for, but has said previously it wants to refurbish existing facilities, including its Saldhana works in the Western Cape, and that an environmental clean-up would require investment.

The Vanderbijlpark-based company said it had lowered its net debt to R29 0million at the end of last year after raising R4.5 billion in a rights issue.

“ArcelorMittal is in the process of raising funds via a borrowing-based facility to the value of R3.5bn as part of a capital raising for the entire business,” the company said.

As with many steel makers around the world, ArcelorMittal South Africa has been hurt by cheap Chinese imports and rising costs and has not made an annual profit since 2010.

Read also: ArcelorMittal SA cuts headline loss by R2.78bn

The company has pledged to limit job cuts, increase black ownership and invest in supply in return for the government pledge to increasing tariffs on imports and also committing to buying local steel in the country's infrastructure projects.