ArcelorMittal South Africa (AMSA) plans to clear most of the production backlog at its Newcastle Works operation by the end of December after “unforeseen delays” had halted steel output since mid-November.
The blast furnace, which had suffered a delayed start-up after its reline was completed at the end of October, was successfully commissioned at the KwaZulu-Natal-based mill operations this week, allowing steel production to resume.
“[AMSA] will prioritise all backlog orders immediately,” CEO Paul O’Flaherty commented in an update to shareholders on Wednesday, adding that all domestic demand would be delivered from January 2015.
The Newcastle Works reline project, which started in May, was aimed at increasing domestic steel production capacity from 1.7-million tonnes a year to 1.9-million tonnes a year and enabling a more modern and safer furnace.
By the end of July, the four-month project had experienced complications resulting in the completion of the reline, which had initially been scheduled for September, being delayed until October.
In a presentation to shareholders at the time, the company attributed 70% of the delays to the nonperformance of contractors, while industrial action and additional work were responsible for 5% and 25% of the setbacks respectively.
AMSA, in an effort to minimise the impact, had relocated work packages, appointed additional supervisors and contractors and ensured additional billit imports.