ArcelorMittal South Africa, a unit of the world's top steelmaker, said it had shut indefinitely three electric arc furnaces at its Vanderbijlpark plant in South Africa, reducing annual output by around 1 million tonnes.
The steelmaker, Africa's biggest, was given until October 16 to deal with emissions from the furnaces and decided it was cheaper to shut the units rather than complete a project on a dust-extraction system that would capture the emissions.
Current weak demand for steel also justified the decision to shut the units, Chief Executive Nonkululeko Nyembezi-Heita said at the company's results presentation.
"If that proves to be insufficient we would be looking for further capacity shuts," she said.
She added that the whole ArcelorMittal group was undergoing a similar review and any decision to shut additional capacity would be announced in the new year.
The World Steel Association earlier this month forecast steel demand would rise by 2.1 % in 2012
ArcelorMittal, yesterday said it plans to slash its dividend and focus on cutting debt after slowing demand from China and sluggish European markets drove it to a third-quarter loss.
The group, which makes 6-7 % of the world's steel, said on Wednesday market conditions would remain tough this year and scrapped its forecast for core profit per tonne in the second half to be similar to that in the first.
However, finance chief Aditya Mittal was hopeful of some improvement in 2013, following a recent pick up in iron ore and Chinese steel prices and stability in the price of scrap.
"Clearly Q3 and Q4 represent very challenging operating conditions, but should mark the low point in the cycle," he told a conference call.
Shares in ArcelorMittal, formed in 2006 when the steel business of Indian-born tycoon Lakshmi Mittal bought European peer Arcelor, were down 4.1 % at 1115 GMT, among the weakest in the blue-chip FTSEurofirst 300 index.
The $500-billion-a-year steel industry - a gauge of the global economy - has slowed sharply this year from last, as a moderation in China's economic growth has compounded weak demand from austerity-ravaged Europe.
The World Steel Association earlier this month forecast steel demand would rise by 2.1 % in 2012, down from 6.2 % in 2011. It had forecast 3.6 % growth in April.