ArcelorMittal South Africa said on Thursday it was in ‍advanced talks ‍with the state-owned Industrial Development Corporation (IDC) that ​could lead to a potential transaction, driving its shares ⁠up nearly 10%.

The loss-making South African unit of ⁠global steelmaking giant ArcelorMittal ‌has been battling weak local demand, high electricity costs as well as competition ⁠from local scrap metal recycling mini-mills and imports from China.

The company mothballed its long-steel plants last year in an effort to ⁠stem losses.

ArcelorMittal South Africa ​said in a statement its parent company and the IDC "are engaged ‍in advanced discussions to find a sustainable solution based ​on a non-binding term sheet regarding a potential transaction".

The steelmaker did not disclose details of the proposed transaction and the IDC was not immediately available to comment.

Bloomberg on Wednesday reported that the IDC, which is ArcelorMittal South Africa's second biggest shareholder with 8.2%, had resumed talks to acquire the business ⁠after negotiations stalled last year over ‌valuation.

The IDC has, over the past two years, provided 2.6 billion rand ($160.79 million) in ‌loans to ⁠help ArcelorMittal South Africa stay afloat.

($1 = 16.1703 rand)