South African govt, AMSA locked in talks over key mill’s fate

South Africa’s government is locked in crisis talks with the local unit of ArcelorMittal to decide the fate of the company’s loss-making construction-steel mill, people familiar with the matter said.

The government’s trade department and one of its state-development banks, the Industrial Development Corporation is in discussions with ArcelorMittal South Africa (AMSA) about the potential closure of the Newcastle mill, said the people, asking not to be identified because the discussions aren’t public.

The operation located in the eastern province of KwaZulu-Natal makes steel grades used in the country’s crucial automotive, mining and construction industries.

On April 1, the company said the IDC – its biggest shareholder after its parent – would conduct a due-diligence exercise with a view to taking a bigger stake in AMSA.

A decision could emerge in coming days and the mill is hemorrhaging cash, with the entire group being unprofitable, the people said. AMSA has set