A palpable sense of uncertainty envelops Newcastle as ArcelorMittal South Africa (AMSA) prepares to wind down its Longs Steel Business at Newcastle Works. However, it appears the local government sphere is now addressing this critical issue with the gravity it necessitates.

Reverend Musa Zondi, KwaZulu-Natal’s MEC for Economic Development, Tourism and Environmental Affairs (EDTEA KZN), has urgently called for intervention following AMSA’s announcement about the closure of its long steel operations in Newcastle and Vereeniging, which the steel giant predicts will lead to the loss of approximately 3,500 jobs.
To read more on AMSA’s decision, click here.
Given AMSA’s significant influence on the Newcastle economy, the EDTEA KZN has revealed that Reverend Zondi has communicated with the Minister of Trade, Industry and Competition, Parks Tau, seeking enhanced engagement to confront the looming economic crisis.
“The closure will directly affect over 2,000 jobs in Newcastle, posing a severe threat to the livelihoods of workers and the broader local economy. As one of the largest employers in the region, AMSA’s operations have long been a pillar of economic stability, supporting thousands of workers and local suppliers,” stated the EDTEA KZN.
The department highlighted that AMSA’s appeal for governmental support focuses on several pivotal issues, including:
- A 15% reduction in Eskom tariffs and relief from load shedding.
- Reliable and cost-effective steel transportation from Transnet.
- Addressing fair competition and business practices.
- Reviewing industry policies such as the Scrap Price Preference System (PPS) and Export Scrap Tax.
In light of the severe repercussions of the impending closures at AMSA and the resultant mass job losses, particularly in Newcastle, Reverend Zondi recognised the formation of a national task team, chaired by Dr Tebogo Makube, and the initiatives spearheaded by Sisanda Mtwazi to foster dialogue between AMSA and the Government. Nevertheless, he has voiced concern that the assistance provided to date has been inadequate to prevent the closure.
“The closure of AMSA’s Newcastle and Vereeniging operations could devastate the local economy, leaving thousands without work and negatively impacting regional suppliers. Furthermore, if this is not resolved, it will have a ripple effect on the broader economy of KwaZulu-Natal, threatening economic stability and growth in the province. We urge the Minister to explore all possible solutions to prevent this closure, including further dialogue with AMSA and stakeholders,” said Reverend Zondi.
He further emphasised that the EDTEA remains dedicated to safeguarding jobs and protecting the economic interests of the Newcastle community.
Moreover, ActionSA has voiced its profound concern, stating that the closure of ArcelorMittal’s operations in Newcastle and Vereeniging serves as a stark reminder of the deep-rooted flaws in South Africa’s industrial and economic policies.
Alan Beesley, ActionSA Member of Parliament, articulated that as the largest steel producer in the country, ArcelorMittal’s decision to wind down its Long Steel Business is a devastating blow to workers, their families, and the communities of Newcastle and Vereeniging, further exacerbating South Africa’s unemployment crisis.
Beesley stressed, “With a staggering unemployment rate of 32.1%, South Africa simply cannot afford such losses. The impact of this closure will reverberate across industries and households, undermining any hope of economic recovery.”
While Reverend Zondi has called for urgent interventions, Beesley emphasised that ArcelorMittal’s reasons for the closure—prolonged weak economic conditions, logistics and energy challenges, and unsustainable competition from low-cost imports—are clear indicators of the government’s failure to tackle the institutional issues crippling the South African economy. “Even more concerning is the company’s acknowledgment that, despite engaging with the government to explore solutions, no sustainable path forward could be found,” said Beesley.
Delving deeper into the issue, Beesley noted that the challenges cited by ArcelorMittal are not exclusive to the steel industry. “Prolonged weak economic conditions, unreliable infrastructure, and escalating energy costs are common to many sectors, raising the question: which South African industry or business will fail next?” said Beesley.
In response, Beesley argued that ActionSA is now advocating for a comprehensive review and overhaul of South Africa’s industrial policies to ensure they are evidence-based and capable of addressing the country’s economic challenges.
“Policies like the Price Preference System (PPS) and export duties must be reassessed, as they have failed to support long-term industrial growth and stability. This is more than just an industrial failure; it is a policy failure. South Africa urgently needs bold and decisive leadership to stabilise key sectors, create jobs, and rebuild the economy. ActionSA stands ready to lead the charge for meaningful reform and to hold the government accountable for its failures,” concluded Beesley.

As the pressure intensifies to rescue AMSA from its current predicament, what are your thoughts on the above?
Share your views in the comment section below.
Comments 3
Parks Tau must be fired. Read an article that stated he never even showed up last year November for a meeting with AMSA….
Why leave it until it is critical before taking action. Last year this time we were in the same situation then the givernment promised to fix it but of course failed to go through with their promises so of course closure is on the table again. The ripple effect will clise many businesses even now what company wants to invest in Newcastle to face this prospect
What could the government do to help
ArcelorMittal
Subsidies electricity which it has already done by negotiating better tarrifs
Impose further tarrifs on imports from China which might not help as China has a massive plant set up in Zimbabwe with its own power station started in September 2024 to start supplying Steel to the whole of
AFRICA under The African Free trade agreement at 0 Tarrif