A sombre atmosphere has descended upon Newcastle and Vereeniging as ArcelorMittal South Africa (AMSA) announced its decision to wind down its Longs Business, marking a challenging beginning to 2025 for the two communities.

On Monday, 6 January 2025, AMSA revealed that this decision follows prolonged difficulties, including sluggish economic growth, escalating logistics and energy costs, and an influx of low-cost steel imports, particularly from China.
The company highlighted that persistent high logistics and energy expenses, coupled with insufficient policy interventions—specifically the Price Preference System (PPS) and Export Scrap Tax—have significantly impacted the Newcastle Works, which relies on South African-sourced raw materials, rendering the Longs Business unsustainable.
In its official statement, AMSA said, “Despite extensive consultations with Government and stakeholders to find viable solutions to sustain the Longs Business, progress was insufficient to avert the wind down. The company will now transition the Longs Business into care and maintenance. Steel production is anticipated to cease by late January 2025, with the wind-down of the remaining production processes completed in Q1 2025.”
AMSA attributed the decision to persistent overcapacity in both global and local markets, as well as unsustainably low international steel prices, which have compounded the structural challenges of the Longs Business. The company noted that asset utilisation had fallen to just 50%, forcing the operation of its blast furnace at minimal levels to maintain technical and operational integrity.
Reflecting on this outcome, AMSA CEO Kobus Verster expressed regret, stating, “It is with deep regret that we must take this difficult decision. Over the past year, our employees and dedicated management team have shown remarkable commitment and resilience in the face of serious uncertainty. Unfortunately, despite everyone’s best efforts, including significant engagement with stakeholders, the structural challenges in the Longs Business were not resolved. While this outcome is deeply disappointing, especially given the economic challenges facing South Africa, we remain focused on securing a sustainable future for the remaining operations.”
The wind-down decision directly affects operations at the Newcastle and Vereeniging Works, as well as AMRAS, AMSA’s rail and structural subsidiary. While Newcastle’s coke-making operations will continue, they will be scaled back to align with reduced demand. AMSA estimated that approximately 3,500 direct and indirect jobs will be impacted, with additional knock-on effects on roles within the Flat Business and corporate support services.
Furtherrmore, AMSA acknowledged the broader economic repercussions, particularly in the Newcastle region, stating, “The broader economic effect on induced jobs is expected to be significantly higher, especially in the Newcastle region. A formal Section 189(3) labour consultation process will commence shortly, and the company remains committed to a responsible process to minimise the impact on employees and suppliers. The company is actively working to realign its R1 billion working capital facility secured in 2024 to support this transition.”
The company underscored the severe challenges facing the South African steel industry, describing them as the most sustained since the 2008/09 financial crisis. International steel prices have plummeted to unsustainable levels, with Chinese Hot Rolled Coil and Rebar prices dropping below $500 per tonne in late 2024. Record-high Chinese exports have triggered production stoppages, capacity cutbacks, and plant closures globally, while affordability concerns have led to a reassessment of decarbonisation goals in many markets.
Financially, AMSA anticipates a significant decline in earnings. Earnings per share are expected to drop to a loss between R5.48 and R6.21 per share, compared to a loss of R3.52 per share the previous year. Headline earnings per share are projected to decline to a loss between R4.06 and R4.41 per share, compared to the prior year’s loss of R1.70 per share. These losses reflect challenging market conditions, the instability of blast furnace operations in the Flats Business during the second quarter, and the costs associated with the Longs Business wind down, including approximately R2.7 billion in asset impairments, wind-down costs, and severance charges.
Looking ahead, AMSA’s leadership remains committed to the long-term sustainability of the company.
CEO Kobus Verster emphasised the importance of ensuring the Flats Business remains viable and competitive. AMSA plans to focus on re-establishing itself as a leader in innovative, export-driven, steel-based industrialisation, with a strong emphasis on supporting downstream industries such as automotive, renewable energy, mining, and infrastructure. The company also aims to recapitalise its business to strengthen its balance sheet and support future investments.
Building on this, AMSA stated that it will prioritise innovation and sustainability to meet the demands of a competitive global market. The company expressed confidence in its ability to drive growth and enhance the performance of the Flats Business, stating, “These efforts will solidify its position as a leader in the steel industry and as a key contributor to South Africa’s industrial development.”

As Newcastle and Vereeniging brace for the impact of AMSA’s decision, the broader implications for the region and the South African steel industry remain a significant concern.
What are your thoughts on AMSA’s announcement and its potential effects? Share your views in the comment section below.
Comments 17
So it’s finally Game over for Newcastle.
It’s a disgrace that the government is letting this happen but then again I am not one bit surprised as the politicians in this country is more interested in lining their pockets then to actually, helping businesses grow to benefit the citizens of this country,the difficulties AMSA is facing is once again another example of just that!
Once again proof of how our government and politians have failed our country and nation. All this failed democracy has achieved since its inception in 1994 is a handful of super rich , corrupt , politically connected individuals, wallowing in money while the rest of the nation starve.
The age old blueprint of African economic destruction
It’s a crying shame,
Very sad indeed..But the goverment can sponsor large amounts of money to some organisations thats less needed. So many families will suffer to make ends meat…Terrible!
It’s so sad the government has again let us down there is no light at the end of this tunnel guys
Kobus Verster, is it only the management that were dedicated? Why not dedicated workers and management?
I see this as one of the many problems Arcelor Mittal Newcastle was facing throughout the years in surviving.
This was on the cards. You can imagine trying to save a large company, asking for help from a government that lives in a pit of self indulgence. Then you have unions, who are a well known destroyer of economies, demanding childish increases, while you contend with an industry drowning in China’s no labour laws, pricing.
This is sad news for RSA. This means that the steelwomaterials will have to be sourced outside f RSA.
What a pity, you will expect the Govetnment to assist in securing 3,500 heads, who will jobless.
My worry is that if more people are not working especially 3500 this mean crime is going higher and higher ,there will be no schools or a lot will be uneducated there will be no money to take children to school.The goverment must do something i don’t know what my company has also retreched people last year and is a steel company.😭😭😭😭😭
It’s a disgrace that things have come to this. Families livelihoods taken away in a blink of an eye, while our worthless governments sits back and feathers their own pockets. Where do we go from here?
It’s bad news for the people of Newcastle losing one of the heavy industry which provided hope to its economy and population.
Yet we continue to support these Chinese businesses with their cheap alternatives. Their cars are already taking over the market in South Africa.Very soon well known brands will close shop in South Africa.At the expense of hard working South Africans.
Amsa management is also to blame and this includes the Mittal’s. Their salaries is more than all the unschooled salaries together.
It’s so sad for the family that will be affected,cheap import steel from China as the main factor.Also pravitising of our South African companies.SOE remain a challenge.Poor governance.
To resolve this we should have boycotted steel imports from China long time ago however we know that some of senior member of our government are porcketing a huge profits and they decided that we rather go for section 189 instead of Saving job’s for poor South Africans
Why don’t they sell the company to the Chinese they wanted to buy U.S steel so they will make the company sustainable and they will save this jobs.
Thank you AMSA for keeping many businesses going for so long, and for the skills you developed for many South Africans.
Got, could have done more, but also, AMSA Newcastle could have done more to save costs by not sending so much of work to their buddies in Van der bill park. Nevertheless, the writing is on the wall, and Newcastle will trudge on. Newcastle people are made of real Steel.