ArcelorMittal’s South Africa unit said on Monday it would close its steel operations at Saldanha Works because it could no longer compete in export markets.
Two of the country's leading economists, speaking separately, both said that as a small player bedevilled by expensive and unreliable electricity supply and hefty competition in the world steel market, South Africa would be better off forgetting the steel industry and looking for a different niche.
Economist Dawie Roodt said: “The world is getting very competitive. We are a small player and to be in steel you have to be not just big, but very big. The closure of the plant is unfortunate, but it is a reality we must face. Also, Saldanha was not close to its export markets.”
The company announced in September that it could close some operations as part of a review aimed at strengthening long-term sustainability amid cheap imports, rising costs and a flagging local economy.