The National Energy Regulator of South Africa (NERSA) has initiated a public consultation process regarding ArcelorMittal South Africa’s (AMSA) application for six-year Negotiated Pricing Agreements (NPAs) for its Newcastle and Vanderbijlpark Works. This process is viewed as a potentially decisive moment in efforts to stabilise AMSA’s long steel operations and prevent large-scale job losses in the embattled steel sector.
NERSA has clarified that AMSA submitted applications to Eskom in September and October 2024, seeking six-year NPAs for both the Newcastle Works in KwaZulu-Natal and the Vanderbijlpark Works in Gauteng.
As highlighted by NERSA, these applications were made under Eskom’s Framework for NPAs, designed to offer tailored electricity pricing for qualifying industrial users. However, Eskom assessed the applications and determined that neither facility met the framework’s eligibility criteria.
Consequently, Eskom did not support AMSA’s request, leading to the matter being referred to NERSA for public consultation.
The consultation paper is accessible on the NERSA website at www.nersa.org.za under the “Electricity > Consultation > Documents” section. Members of the public, stakeholders, and industry representatives are invited to submit written comments by Monday, 7 July 2025, via email to [email protected].
A virtual public hearing is also scheduled for Thursday, 17 July 2025, from 09:30 to 12:00 on Microsoft Teams. Those wishing to attend or make representations must register by 16:30 on Friday, 27 June 2025, by contacting Mr Walter Mabunda at [email protected] or calling 012 401 4660.
It should be noted that, according to NERSA, should no parties register to make submissions, the hearing will not take place. Registered participants will be notified directly, and a notice of cancellation will be published on the NERSA website if necessary. For general queries regarding the consultation, stakeholders can contact Ms Buyiswa Mabinya at [email protected], or call 012 401 4058.
This consultation process follows nearly a year of uncertainty surrounding AMSA’s long steel business, which the company had threatened to shut down due to a range of challenges, including escalating electricity costs, declining competitiveness, and outdated infrastructure. As reported by Newcastillian News on 6 January 2025, AMSA announced its intention to wind down operations at its Newcastle and Vereeniging plants.
This announcement prompted widespread concern from labour unions, industry players, and government stakeholders.
Newcastillian News on 7 January 2025 detailed the response from the National Union of Metalworkers of South Africa (NUMSA), which urged urgent collaboration to save jobs and revitalise the local steel sector. Concerns intensified when Newcastillian News on 16 January 2025 reported that the closure could lead to “between 20,000 and 25,000 job losses across the value chain”, including contractors and local suppliers.
In response, AMSA granted a temporary reprieve, extending operations at the affected facilities by one month, as confirmed by Newcastillian News on 6 February 2025. This extension allowed for high-level discussions with government stakeholders. Newcastillian News on 23 January 2025 reported on a key meeting between ArcelorMittal Executive Chairman Lakshmi Mittal and President Cyril Ramaphosa, as well as Finance Minister Enoch Godongwana and Trade, Industry and Competition Deputy Minister Fikile Majola.
These engagements led to further negotiations, culminating in a six-month operational deferral of AMSA’s planned closure. As noted by Newcastillian News on 31 March 2025, the company agreed to maintain operations at the Newcastle and Vereeniging plants while a sustainable long-term solution was explored.
To strengthen AMSA’s position, government introduced trade protections by imposing duties on certain imported steel products, a move aimed at easing pressure on local producers.
This development was highlighted by Newcastillian News on 5 May 2025, which described the measure as a “critical step in the broader rescue effort”. A detailed account of AMSA’s financial strategy to stabilise operations was provided by CEO Kobus Verster.
Moreover, as reported by Newcastillian News on 1 April 2025, the company secured a “R1.6 billion package that included capital investment and operational restructuring” to keep the Newcastle plant running. Newcastillian News on 19 March 2025 previously reported that this package, combined with government backing and tariff relief, could offer AMSA a path to long-term survival — provided that electricity pricing issues were addressed.
The current NERSA consultation is therefore a critical step in that process.
The approval or rejection of the NPAs could significantly impact the cost structure of AMSA’s operations — particularly at Newcastle Works, which is not only a cornerstone of the company’s long steel division but also a major employer and economic pillar in northern KwaZulu-Natal.
Members of the public, municipalities, unions, and local businesses are strongly encouraged to participate in the consultation and attend the scheduled public hearing. The outcome will likely play a pivotal role in determining whether AMSA can continue to operate its Newcastle and Vanderbijlpark facilities under more favourable electricity pricing — and with it, the future of South Africa’s long steel industry.
What are your thoughts on these developments? Share your views in the comment section below.
4 Responses
Let us look at the reasoning behind the electricity tarif reduction
This enables Amsa to continue to operate.
Eskom must also realise that if amsa closes 2400 direct tax payers stop paying.
Then indirectly possibly 20 000 people ,businesses and Newcastle town residents wil stop paying electricity, rates and taxes due to job losses.
Not only will Amsa (who pays an enormous amount for power ) stop it’s usage
Eskom will loose financially from businesses and tax payers .
Eskom makes money .Rather make a smaller profit from a single big company and keep the rest employed and paying.
We are all responsible for saving and reducing usage.
Some will resort to illegal activities like bridging electricity meters ,stealing cables and damaging infrastructure to survive .Some will even assault Eskom employees due to frustration due to loosing their jobs
Please allow Amsa it’s reduced tariff. Keep Newcastle people employed and eskom will still be paid.let’s not forget a paying customer is worth hearing out.
Thank you
I think is the good thing for the company to close because there is lots happening in that company, that all South African residents they should know about it and after they know, then they will understand why some of us we pray for the company to close
Eish, what a positive and uplifting comment by a mamparra
NERSA must look at the big picture, if NERSA gives the reduction then the tax payers continue paying the municipal bills, if ArcellorMittal closes down due to this not going through, Municipal bills wont be paid by tax payers due to job losses throughout the board, municipalities will loose that income. NERSA plz give that reduction.