South Africa’s African Rainbow Minerals (ARM) (ARIJ.J) announced on Wednesday that the jointly owned Beeshoek iron ore mine will be placed on “care and maintenance” following the decision by its only customer, the struggling steel producer ArcelorMittal Global Steel Giant Holds Talks To Sell South African Operations To IDC For $460 Million South Africa, to stop purchasing ore.
The “care and maintenance” status means the mine will be temporarily closed while the owners assess potential options to restart operations should market conditions improve, according to Reuters.
Mining activities at Beeshoek officially ceased at the end of October, and approximately 622 permanent employees will be retrenched effective November 30, ARM said in a statement.
Beeshoek, operated by Assmang, a joint venture between ARM and international miner Assore, halted deliveries to ArcelorMittal in late July after the expiry of a long-term supply contract in June, ending a partnership that had lasted for decades.
Although ArcelorMittal South Africa continued buying iron ore on a month-to-month basis after the contract expired, it stopped all purchases on July 27.
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According to ARM, a comprehensive review of operational, commercial, and financial alternatives “failed to identify a viable path forward” for the ageing mine, whose infrastructure and cost structure were heavily dependent on ArcelorMittal’s offtake.
“In the absence of a sustainable offtake arrangement, Beeshoek Mine is no longer economically feasible to operate,” the company stated.
The miner added that consultations with unions, as required under South Africa’s Labour Relations Act, have been completed and that the Department of Mineral and Petroleum Resources has been formally notified of the closure.
The announcement confirms an earlier warning issued in August when Assmang informed unions that it was considering shutting down the mine after ArcelorMittal unexpectedly declined to sign a new three-year supply agreement.
ArcelorMittal South Africa, meanwhile, continues to face mounting challenges, including weak local demand, high electricity prices, unreliable freight logistics, and increasing competition from Chinese imports and smaller “mini-mills.”
The company has also postponed the closure of its long steel plants in Newcastle and Vereeniging as discussions with the South African government and labour unions continue.
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Image Credit: Reuters
