ArcelorMittal South Africa (AMSA) issued an official statement on Monday evening, 31 March 2025, confirming that the wind-down of its Long Steel Business will be postponed for an initial period of at least six months, with the deferral extending to 31 August 2025. The company attributed this decision to a R1 683 million financial facility secured from the Industrial Development Corporation of South Africa SOC Limited (IDC).
“The facility is repayable subject to agreement between the parties and contingent on the financial performance, solvency and liquidity of the Long Steel Business,” AMSA specified in its statement.
Under the terms of this arrangement, ArcelorMittal South Africa has undertaken to maintain the operations of the Long Steel Business and safeguard employment throughout the deferral period. Additionally, the company has obtained a Temporary Employee Relief Scheme (TERS) grant to help cover employee costs, thereby reducing the reliance on the IDC facility.
AMSA further elaborated, “As announced in the SENS announcement of 19 March, the Company will continue to consider various strategic alternatives, and as such the agreement reached with the IDC includes ArcelorMittal South Africa confirming that the IDC may conduct a due diligence exercise, which will be conducted by the IDC during the six-month period. Further announcements regarding these matters will be made as appropriate.”
The company also noted that the consultation process mandated by Section 189(3) of the Labour Relations Act will be placed on hold.
However, restructuring may still proceed in specific areas outside the Long Steel Business due to operational necessities. The Newcastle works blast furnace will remain active, ensuring that customer requirements are met during this period.
Moreover, AMSA explained that the South African Government intends to utilise the deferral period to address critical structural issues within the steel industry, including the scrap Preferential Pricing System, scrap export tax, and tariff measures such as safeguards. “During this time, ArcelorMittal South Africa will focus on implementing further improvements to optimise operations, enhance product offerings and supply chain reliability for customers, and advance its commitment to localisation through continued industry collaboration,” the company stated.
Based on discussions with the Government, AMSA conveyed its understanding that a more market-responsive Preferential Pricing System and scrap export tax framework will be introduced in the near future, with safeguards expected to follow. These steps are intended to foster a more equitable competitive environment within the steel sector, yielding broader economic advantages.
ArcelorMittal South Africa extended its gratitude to the Government, particularly commending Minister Parks Tau for his leadership throughout the engagement process.
The company also acknowledged the contributions of the Department of Trade, Industry and Competition, the IDC, and various stakeholders—including customers, suppliers, and organised labour—for their support in preserving this vital industrial capability.
AMSA expressed optimism regarding emerging signs of demand growth within the South African economy, highlighting potential opportunities for the steel market, especially in sectors such as energy. Should these prospects materialize, they would enhance the standing of the high-quality products manufactured and distributed by the Long Steel Business.
Kobus Verster, CEO of ArcelorMittal South Africa, stated, “We are pleased to have reached agreement to enable the deferral of the wind down of our Longs Steel Business and an in-principle understanding on other issues that require resolution to hopefully avert closure entirely. This provides a critical pathway for the operations, our employees, and the broader steel industry in South Africa. This period will allow all stakeholders time to collaboratively address the negative policies that have led to structural challenges in the regulatory framework for steel, including input material pricing and trade mechanisms, that have significantly impacted the viability of the only integrated Long Products operation in South Africa. We remain committed to working with the government to create an enabling environment where steel manufacturing can now thrive sustainably. The IDC facility, combined with the Government’s commitment to address structural challenges in the industry, offers a pathway to potential long-term sustainability for the business.”
Verster further remarked that AMSA will engage actively with stakeholders during the deferral period to refine operational processes, reinforce supply chain partnerships, and contribute to the development of the South African economy.
“We remain cautiously optimistic about the emerging opportunities in various sectors, particularly energy, which could drive increased demand for our high-quality steel products,” he added.
While this agreement represents a meaningful advancement, Verster stressed that achieving sustainable profitability remains the primary objective. He declared, “The next six months will be crucial in determining whether the Long Steel Business can achieve the financial stability required for long-term viability. We are dedicated to this process and appreciate the support of all our partners in this endeavour.”
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Following this announcement, what are your thoughts on the above? Share your views in the comment section below.
6 Responses
The closure is unthinkable. The automative and construction sectors and the economy as a whole need this strategic industry. To a significant extent it was Government interference in the sector which created distortions which undermined this core domestic industry. The reality of the impact of their actions is finally being understood. An expensive learning curve for the country. Let us now see if the sense of urgency will be maintained and if the necessary removal of the market distortions will actually be implemented. Regarding, the call for increased import duties on steel, this is justified on the basis of defending against dumping by marginal cost Chinese producers, itself a consequence of distortions to the supply side in China following from the culture of artificial economic stimulus. Time to allow markets to operate. Governments are incapable of replicating the function of the “invisible hand “.
So in other words we can expect an announcement that they are closing down again by November or December. How can people plan their lives around 6 months. Mr Vester needs to be replaced and fired he is useless.
I think we might be more appreciative of the responsibility which Mr. Vester carries. Dealing with the ANC is clearly extremely difficult. Handshakes mean ZERO and vested interests in competing new steel operations lurk in the background. The comrades are in a delicate position. The fact is that he has been able to keep the thing alive and the possibility of structural reforms now exist where they did not previously. Now the ball is in their court. The comrades must decide. It is a shocking way to treat an entire community and dependent industrial sectors, but I can’t see that Mr. Vester is responsible for that. Do you really think it will help the situation to remove him now ?
Look at his record at Nampak and see what he did to the share value there
Apologies look at his record at Aveng
The government needs to buy back the shares in this industry and buy back shares in the iron ore mines.this needs to be done at Eskom and stop wasting money on social grants and create real jobs.we have plenty of the material to beneficiate
to supply south Africa and the continent and later supply Europe