Maputo – Arcellor MIttal, a steel manufacturer base din Luxembourg, has temporarily suspended construction of its factory in Belulane, Boane district in the Mozambican province of Maputo, a source from the Mozambican Centre for Investment Promotion (CPI) told.
The project, which is an investment of US$40 million, is expected to create 200 jobs after its conclusion.
The first stone of the building was laid some nine months ago, according to the CPI source.
The project is part of the Beluluane Industrial Park, an industrial duty free area, where Mozambique Aluminium Smelter (Mozal), an aluminium foundry owned by Bhp Billiton, is also located.
According to macauhub’s source, Arcelor Mittal is also considering similar moves in other African countries, although no reason for this decision was given.
When the Mozambican foundry was designed it had guaranteed markets in the United States, China and Middle Eastern countries.
Market speculation is that slow demand for steel products and the financial crisis are behind the decision to halt construction taken by Arcelor Mittal and that the project may go ahead depending on the state of the market as of mid 2009.
The project was expected to produce, at an initial stage, 30,000 tonnes of steel per year and later reach a capacity of 200,000 tonnes per year.