ARCELORMITTAL SOUTH AFRICA LIMITED - Wind down of the broader long steel products operations at ArcelorMittal South Africa Limited

Wind down of the broader long steel products operations at ArcelorMittal South Africa Limited

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

WIND DOWN OF THE BROADER LONG STEEL PRODUCTS OPERATIONS AT ARCELORMITTAL
SOUTH AFRICA LIMITED.

Shareholders have previously been advised of the efforts made to ensure the long-term viability of the
Newcastle Works and the broader Long Steel Products Business ("Longs Business". At the beginning
of 2023, an optimisation programme commenced. Prior to this, over the past few years, the Company
implemented aggressive cost savings initiatives, improved raw material cost savings, asset footprint
adjustments and various other productivity initiatives.

Unfortunately, despite best efforts, the initiatives implemented were not able to counter the combined
effect of the following:

•       A slow economy and difficult trading environment: On the back of low GDP growth in South
        Africa, in the past seven years, the country's apparent steel consumption (ASC) has reduced
        by 20%, reaching levels of around 4,0 million tonnes, reflecting low market demand in key steel
        consuming sectors, limited infrastructure spend and project delays, resulting in overcapacity in
        the market and overall weaker business confidence.

•       National constraints beyond the control of the Company: High transport and logistics costs as
        well as energy prices, exacerbated by the well-publicised logistics failures and their resultant
        cost impact, and the prevailing electricity challenges which the country faces.

•       Scrap advantage over iron ore: The introduction of a preferential pricing system for scrap, a
        20% export duty, and more recently, a ban on scrap exports has allowed steel production
        through the electric arc furnaces route an 'artificial' competitive advantage when compared with
        steel manufacturers beneficiating iron ore to produce steel.

In the circumstances, the ArcelorMittal South Africa Board and Management have had no option but to
embark on a process that contemplates the wind down of the Company's Longs Business, which for
now may be placed in care and maintenance. This is subject to a due diligence and a consultative, and
iterative process involving key customers, suppliers, organised labour, and other stakeholders. The due
diligence and final implementation plan will determine the extent, timing, and phasing of the winding
down of operations. Affected plants will be most plants at Newcastle Works, the Vereeniging Works,
and rolling facilities which use Newcastle material as feedstock. The coke batteries will remain operative.

Shareholders are accordingly advised that the Company will, to the extent required, be commencing
with a consultation process in terms of Section 189(3) of the Labour Relations Act 66 of 1995. The
number of jobs impacted will depend on the alternatives identified and agreed to and is subject to a
formal consultation process. However, at this time it is estimated that approximately 3 500 people (own
and contract employees) may be affected. The Company will continue to engage directly with
Government throughout this process.

The Company's business going forward will be focussed on re-establishing ArcelorMittal South Africa
as the champion of innovative, export driven, steel-based industrialisation in South Africa, for Sub-
Saharan Africa and other key geographies, by building on the existing competitive supply chain and
ensuring the continued growth and competitiveness of core downstream industries such as automotive,
renewable energy, mining, and key construction and infrastructure projects.

Kobus Verster, the CEO of ArcelorMittal South Africa said that "the ArcelorMittal South Africa Board and
Management have reached this point after having exhausted all possible options. As difficult as these
circumstances are, we have a duty to ensure that the business remains sustainable in the long term, in
the interests of the Company and its stakeholders. The remaining business, after the wind down, will be
on a more sustainable financial footing and be able to invest the appropriate capital in product
development and available growth prospects".

Vanderbijlpark
28 November 2023

For further information please contact:

Company Secretary
FluidRock Co Sec (Pty) Ltd
Tel: (016) 889 4077

Manager: Corporate Communications
Tami Didiza
Tel: (016) 889 2549

Sponsor to ArcelorMittal South Africa Limited
Absa Bank Limited (acting through its Corporate and Investment Banking division)

Date: 28-11-2023 09:00:00
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