Johannesburg, Nov 11 (IANS): ArcelorMittal's South Africa unit on Monday announced it was shutting its steel operations at Saldanha, which was suffering "severe financial losses".

The company, majority-owned by ArcelorMittal, announced on its website that "568 people work at the plant which has produced steel products for more than two decades."

As part of a strategic review of its operations, the steel manufacturer found that its Saldanha operations had lost their competitive cost advantage to compete in the export market, "mainly due to raw material and regulated prices", fin24.com reported.

ArcelorMittal said Saldanha's losses were forecast to continue for the future.

The plant's production facilities will be shut down, which will leave it only on "care and maintenance" by the first quarter of 2020.

"This difficult decision was taken in the context of constructive ongoing engagements with key stakeholders, including government and organised labour, to find alternative solutions to the dire situation in the South African steel industry," the company said.

Sales orders will be fulfilled from the group's Vanderbijlpark Works.

The company is still deciding on the future of its Newcastle operations, and certain of its long steel products rolling facilities.

"Exploration of the benefits of a concentrated operating footprint will be of foundational importance during this phase of the review."

The company had announced planned retrenchments as part of "large-scale restructuring" in July.

The next phase of its review will focus on its operations in Newcastle, in the eastern province of KwaZulu-Natal and some long-steel products rolling facilities, it said, adding that exploration of the benefits of a concentrated operating footprint will be central to this.