Metso confirms closure of foundry – 200 jobs impacted

Mining OEM specialist Metso, which recently announced a merger with Outotec, will discontinue its Isithebe foundry by the end of September 2019 resulting in the loss of approximately 200 employees. The foundry is located in KwaZulu-Natal half-way between Durban and Richards Bay.

In developing its global supply footprint in its minerals consumables business area, Metso says the decision to close Isithebe follows consultations in which it evaluated the closure or other alternatives. This undertaking will have a small negative impact on Metso’s third quarter result, the company said in an announcement on their website.

“Our strategy is to utilise synergies of the most efficient manufacturing and sourcing opportunities globally to ensure the best value, availability and quality for our customers. After careful evaluation of all opportunities for Isithebe, discontinuing the operation was identified as the only feasible solution,” said Sami Takaluoma, President, Metso’s Minerals Consumables business area.

“This is a very unpleasant but necessary action for us. We will focus on ensuring a sustainable transition for Isithebe as well as uninterrupted service to our customers.”

Metso’s foundries produce metallic wear part castings for the mining and aggregates industries. In addition to Isithebe, Metso has five of its own foundries globally and an extensive network of external suppliers.

Metso Minerals and Outotec join forces
In July 2019 Metso Corporation and Outotec Oyj announced that their respective boards have unanimously approved a demerger plan and a combination agreement to combine Metso’s Minerals business with Outotec.

The combined company, Metso Outotec Corporation had an illustrative 2018 combined sales and Adjusted EBITA of €3.9 billion and €369 million (excluding the impact of the €110 million provision recorded in relation to the ilmenite smelter project as described in Outotec’s 2018 financial statements). This represents an illustrative combined adjusted EBITA margin of 9.6% in 2018, excluding the benefit of the synergies described elsewhere in this stock exchange release, and also Metso’s recently announced acquisition of McCloskey International. Including McCloskey, illustrative 2018 combined sales would have been approximately €4.2 billion.

Upon completion, Metso will be renamed Neles Corporation and will be a separately listed entity focused on flow control, independent from Metso Outotec and 100% owned by Metso shareholders.

Both Metso Outotec and Neles will continue to be listed on Nasdaq Helsinki.