Evraz PLC announced on Wednesday that operations at Evraz Highveld Steel and Vanadium in South Africa have been temporarily suspended.
The suspension is the result of an industrial action announced by NUMSA, Evraz Highveld’s largest union. The action occurred after Evraz issued a notice regarding possible retrenchments due to a fixed cost reduction initiative. In addition, the notice detailed a reorganization of the labor force to switch to a legally compliant four shift working schedule.
While Evraz is making all possible efforts to meet obligations to partners and suppliers, as a result of the circumstances, the company cannot completely guarantee the continuity and stability of products supplied by Evraz Highveld, including supplies of vanadium products and vanadium slag. The company’s management is committed to negotiations with NUMSA to reach an agreement that is mutually acceptable.
EBITDA of Evraz Highveld was only representative of less than one percent of consolidated EBITDA of Evraz PLC in 2011. As a result, the South African labor actions are not anticipated to have a major material effect on the company’s financial performance.