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Investing.com -- South Africa’s government is engaged in crisis talks with ArcelorMittal (NYSE:MT) South Africa Ltd. regarding the potential shutdown of the company’s unprofitable Newcastle steel mill, according to Bloomberg, citing sources familiar with the matter.
The discussions involve South Africa’s trade department and the Industrial Development Corporation (IDC), a state development bank that is already the second-largest shareholder in ArcelorMittal South Africa after its parent company.
The Newcastle facility, located in KwaZulu-Natal province, produces steel grades essential for South Africa’s automotive, mining, and construction sectors. However, the mill is currently losing money, contributing to overall unprofitability across the entire group.
On April 1, ArcelorMittal South Africa announced that the IDC would conduct due diligence with the possibility of increasing its ownership stake in the company.
Sources indicate that a decision about the mill’s future could be reached within days as the facility continues to drain financial resources from the company.
The parties involved have not made public statements about the ongoing negotiations.
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