As ArcelorMittal South Africa (AMSA) formally initiates the wind-down of its longs business at its Newcastle Works and Vereeniging Works, a subtle undercurrent of optimism persists—might this trajectory still be reversed? This sentiment is bolstered by the Department of Trade, Industry and Competition (the dtic), which claimed it remains steadfast in its resolve to pursue viable remedies.
In an official statement, the dtic acknowledged AMSA’s decision, disclosed on Friday, 28 February 2025, to phase out its longs business operations across South Africa.
Yet, the department affirmed its proactive stance, stating, “Recognising the steel industry’s vital role in South Africa’s economic reconstruction and recovery, we would like to reassure all stakeholders that we are engaging with AMSA on finding a solution to maintaining longs steel capacity in South Africa.”
Notably, AMSA’s announcement on 28 February 2025 reaffirmed its intent to proceed with the wind-down, attributing the decision to an inability to secure workable solutions to halt the process. The steel conglomerate cited a confluence of challenges, including escalating energy costs, inefficiencies in port and rail logistics, and additional operational impediments.
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While the dtic persists in its efforts to avert the closure of AMSA’s longs business, the Industrial Development Corporation of South Africa (IDC) has emphasised its instrumental role in addressing the company’s predicaments.
“At the beginning of 2024, the IDC provided AMSA with working capital facilities totalling R1 billion. In early February this year, to support the company’s short-term sustainability while a long-term solution was being sought, the IDC extended the deadline to settle the remaining loan amount of R950 million from 1 June 2025 to 1 September 2026. Additionally, the government and the IDC approved a total facility of R380 million to postpone the closure of AMSA’s long-steel operations, which was initially scheduled for the end of January 2025,” the IDC detailed.
Furthermore, the IDC elucidated that this financial intervention was strategically crafted to sustain AMSA’s operations, thereby safeguarding the upstream and downstream industries reliant on its long-steel output, while enduring solutions are formulated. A paramount priority was securing the supply of specialised steel to critical economic sectors, notably the automotive industry.
“This strategic delay was implemented to facilitate ongoing discussions between government and other stakeholders, aimed at exploring viable solutions to the challenges faced by AMSA. The IDC’s proactive involvement underscores its commitment to supporting AMSA during these difficult times and its dedication to finding sustainable solutions for the steel industry,” the Corporation asserted.
Moreover, the IDC underscored that nurturing a competitive steel industry across the value chain is integral to its overarching strategy of advancing South Africa’s industrialisation ambitions.
Mmakgoshi Lekhethe, CEO of the IDC, articulated, “The IDC remains committed to developing a sustainable and competitive steel sector in South Africa. We believe that strengthening this industry is critical not only for job creation but also for positioning South Africa as a key player in the global steel market. Our efforts are focused on ensuring that the local steel sector is resilient under local and global pressures and able to contribute meaningfully to the country’s industrialisation objectives and infrastructure build programme.”
The IDC further affirmed its support for the downstream sector, ensuring a reliable flow of steel products to vital industries, including automotive manufacturing and other productive facets of the South African economy.
“The IDC recognises the importance of a robust downstream steel sector in driving economic growth, job creation, and the broader industrialisation of South Africa. Furthermore, the IDC remains dedicated to supporting smaller steel manufacturers, as their success is vital in maintaining a healthy and competitive steel industry that benefits all stakeholders,” declared the Industrial Development Corporation of South Africa.
While the infusion of working capital has afforded AMSA temporary reprieve to maintain its operations, the IDC emphasised that a enduring resolution hinges on enhancing operational efficiencies, advancing decarbonisation initiatives, and elevating AMSA’s competitive standing within the global steel landscape.
“This is an intervention that requires the collective involvement of not only the IDC, but also key stakeholders such as government, private partners, and AMSA itself. A coordinated and comprehensive approach will be essential to ensure the long-term sustainability of AMSA and its role in the South African economy,” the IDC stressed.
As the government continues its deliberations to forestall the closure of AMSA’s longs business at its Newcastle Works and Vereeniging Works, what are your thoughts on the above?
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3 Responses
Random interventions have unintended consequences. We are now reaping what goverment has sown.
Don’t hold your breath. Too little too late
They are delaying the inevitable,currently AM Newcastle is running at a massive loss. 1billion isn’t going to fix the problem,it’s just buying time. The cost of electricity amd the already failed rail network are key factors in AM reducing their operating costs and we all know what the chances are of government rectifying these issue is non existent .We are all hopefully with all these challenges that a long term solution to be found or else NN will become a ghost town.