ARCELORMITTAL South Africa (Amsa), the country’s primary steel producer, has declared a force majeure with its customers following the violent protests and looting in Kwazulu-Natal and Gauteng last week.
The mayhem that began when former president Jacob Zuma began serving his 15-month jail sentence morphed into civil unrest that saw the torching of trucks, the looting of shopping centres and the destruction of property.
The company said that last week’s unrest had affected major highways and transport routes with roads being blocked, widespread vandalism and vehicles, especially the trucks of transport companies, being petrol-bombed and stoned.
Amsa said the KwaZulu-Natal rail corridor to and from Newcastle was also affected, with flows coming to a halt, and as a result, the transport of material into and out of the company’s plants and dispatches by road were disrupted. It also said several customers closed their premises to ensure the safety of people and property.
“Consequently, ArcelorMittal SA’s ability to fulfil its contractual/delivery obligations was affected by factors beyond the reasonable control of the company, which constitutes a force majeure event and, as such, ArcelorMittal South Africa gave notice of force majeure to its customers. However, the company is examining all options to mitigate impact on customers,” said the company.
Last month, Amsa told investors that it expected headline earnings for the six months ended June to improve by at least R4.5 billion to at least R1.890bn, resulting in an improvement in headline earnings per share by at least R4.15 from a headline loss per share of R2.39 as at June 30 last year to a headline profit per share of R1.76 to June 30 this year.
Earnings were expected to improve to at least R1.690bn, resulting in improvement in earnings per share by at least R3.68 cents from a loss per share of R2.11 as at June 30 last year to a profit per share of R1.57 for the period to June 30 this year.
Amsa’s improved performance comes as the steel industry rides the wave of a boom in worldwide prices. Steel prices have been smashing records on roaring industrial demand after steel plants lay dormant through the pandemic. In addition, China and Russia were crimping steel exports to aid other industries in their countries.
BUSINESS REPORT