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ArcelorMittal South Africa to cut 2 000 jobs

10 Jul 2019, 22:13 GMT+10

ArcelorMittal South Africa may cut more than 2 000 jobs as part of a widespread restructuring to cut costs. The shares plunged.

South Africa's steel industry is suffering from high costs for electricity and raw materials, and has been hit by the weak local economy, the company said in a statement on Wednesday. It expects to report a loss in the first half and said earnings excluding some items will fall by at least R650 million.

"Due to the difficult domestic economic environment, the South African steel industry continues to face significant challenges," the company said. "More significant measures have become necessary, including the review of staffing levels."

The shares tumbled as much as 17%, the biggest intraday drop in 14 months. The stock was down 10% as of 10:19 in Johannesburg.

The company is majority owned by ArcelorMittal, which ranks as the world's biggest steelmaker and has been struggling with weaker demand and lower steel prices in its key markets.

It announced output cuts in Europe last month as the market came under pressure, with US tariffs deflecting shipments to the EU and higher iron ore prices boosting costs.

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