Lakshmi Mittal, the steel magnate and executive chairman of ArcelorMittal, has engaged in high-level discussions with several South African ministers during the World Economic Forum in Davos, Switzerland, to address the impending closures of ArcelorMittal South Africa’s steel mills at its Newcastle Works and Vereeniging Works.
This critical dialogue emerges following ArcelorMittal South Africa’s decision to shutter its Longs Mills in both Newcastle and Vereeniging.
A move that has reverberated through the nation, sparking a unified response from industries, government agencies, community organizations, and stakeholders all striving ambitiously to rescue the steel titan from the precipice of collapse.
The strategic meeting involving Lakshmi Mittal and a distinguished South African delegation, including President Cyril Ramaphosa, Finance Minister Enoch Godongwana, Trade, Industry and Competition Minister Parks Tau, and Electricity Minister Kgosientsho Ramokgopa, was convened at the World Economic Forum (WEF) in Davos. Their agenda was centred on exploring viable solutions to forestall these closures and mitigate the looming job crisis within the sector, as articulated by the National Treasury.
To date, the specifics of any agreements reached remain confidential. However, it was acknowledged that a key discussion point was the rationale behind the decision to cease these operations.
As South Africans observe these developments with keen anticipation, Deputy President Paul Mashatile has observed that the country’s initiatives to spur economic growth via investments and infrastructure development have yet to bear fruit, primarily due to sluggish economic expansion.
During his keynote address at the annual Nedlac Organised Labour School at Kievits Kroon in Pretoria on Tuesday, 21 January 2025, Mashatile specifically highlighted ArcelorMittal South Africa’s proposed closures and the contraction in steel production, which are anticipated to affect thousands of jobs, both directly and indirectly. He also tackled the wider issue of employment in the mining sector, where some companies have already implemented substantial job reductions.
“Through our collective efforts, we have developed collectively agreed sector plans. However, all stakeholders of Nedlac (National Economic Development and Labour Council) must bear the responsibility of facilitating the speedy execution of these plans so they can live up to our expected outcomes. There is evidence that we can do this,” Mashatile asserted.
He further underscored that the current 1.5% economic growth rate is inadequate to address the myriad challenges facing the nation. “We want to see much bigger growth going forward to address the challenges. In a way, the austerity measures are a result of an economy that is not growing as fast as we had envisioned,” Mashatile elucidated.
Furthermore, the dialogue between Lakshmi Mittal and South African ministers at Davos marks a pivotal juncture in the endeavour to preserve ArcelorMittal South Africa’s steel operations. Despite the absence of publicised agreements, the significance of their discussions on underlying issues remains undiminished.
Deputy President Mashatile’s insights into economic growth and job preservation resonate with the urgency of the situation, situating it within South Africa’s broader economic narrative. As stakeholders rally together, the future trajectory relies on collective action to secure the steel industry’s sustainability, thereby supporting the country’s economic fortitude and labour market stability.
What are your thoughts on the above? Share your views in the comment section below.
8 Responses
I wish the result of their discussion will stop the crisis which is pending at this moment
I am 1 of those who stands to lose my job and this job cuts will affect Newcastle negatively
I pray that it works out and our prayers are answered it’s in God’s hands now
I think mittal should make a decision n let it’s people know. Workers are sitting with worries and stress about families and finances. Not sure of whether to go forward with their lives or not. The entire Newcastle community has come to a sad stand still.
Maybe the solution will be to transfer Amsa entirely to local ownership, in the hope that they can run it more economically. But it would probably be too late to save Newcastle.
It is sad to know Ramapotsha give billions to smaller steel companies but couldn’t help ArvelorMittal when they asked for help.
Why did Mittal not agree to meet either potential buyers of his South African plants ?
As bad as it sounds, I think its a little too late..