ARCELORMITTAL SOUTH AFRICA LIMITED - Options To Ensure Sustainability Arcelormittal South Africa

Options To Ensure Sustainability Arcelormittal South Africa

ArcelorMittal South Africa Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1989/002164/06)
Share Code: ACL
ISIN: ZAE000134961
(“ArcelorMittal South Africa”)

Options To Ensure Sustainability Arcelormittal Mittal South Africa –

As communicated on 23 July 2015, the company would be engaging with
its stakeholders, including organized labour and undertaking an
industrial footprint review of its Vereeniging Works with a view to
considering alternatives and deciding on whether mothballing some of
its plants and placing others under care and maintenance would be a
prudent decision. This initial process was expected to be completed
by the end of August 2015.

The company has, as a part of this process, been engaging
extensively with stakeholders, including Government to receive
protection in the form of import tariffs and duties and the
localisation of steel for Government infrastructure projects. We
acknowledge and appreciate the steps taken by Government with
regards to the initial approvals of import tariffs for two of our
products. However, these will only assist in the medium to long-term
and trading conditions continue to worsen since the announcement in
July of the footprint study of our long steel business.
Notwithstanding, Government is still actively working with us to
implement additional tariff and duty applications across our steel
products.

Shareholders are hereby advised that despite our best efforts, and
given our assessment that the outlook is not about to change in the
foreseeable future, the board has had no option but to approve that
management commence the consultation regarding the potential closure
of the Vaal Meltshop and the Forge in the Vereeniging Works. With
immediate effect, we will be starting a consultation process at
Vereeniging Works in accordance with the provisions of Section 189
of the Labour Relations Act. All employees and their representative
trade unions at Vereeniging Works will shortly receive formal
notification of the anticipated process. The possible closure will
affect approximately 400 direct employees and contract service
employees. It is envisaged that the operating mills of Vereeniging
will be merged with the operations of the Newcastle Works to create
one long steel business. We anticipate that this decision will help
optimise the already high and unsustainable fixed costs of the long
steel business.

At the same time, like Vereeniging, the Vanderbijlpark Works
continues to be unprofitable in the face of the current market
conditions. It is for this reason that we will also be initiating an
industrial footprint review of the Vanderbijlpark Works and a review
of Corporate Services, with a view to optimising structures and
costs. It is envisaged that the review, which will use the services
of experts in the field, will be concluded by the end of October
2015, at which time a decision will be announced with regard to any
possible further restructuring. The review will include
consultations with all employees at Vanderbijlpark Works and
Corporate Services, as well as their representative unions, to find
viable alternatives to potential job losses.

ArcelorMittal South Africa continues to engage constructively with
government and labour in an attempt to reduce the impact of the
changes, particularly job losses. To this end, the company will
first consider implementing alternatives before retrenchments are
implemented, as a last resort.

As South Africa’s leading steel producer, the sustainability of the
local steel industry and the prevention of job losses remains
ArcelorMittal South Africa’s primary concern and the company will
continue to engage its stakeholders to find lasting solutions to the
challenges faced by the industry.


31 August 2015
Vanderbijlpark Works

Sponsor to ArcelorMittal South Africa Limited
J.P. Morgan Equities South Africa Pty Ltd

For further information please contact:
Kesebone Maema, Manager: Corporate Communications, Tel: (016) 889
2425

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