ArcelorMittal said that it had no choice but to close its Longs Business.
Image: Photographer Ayanda Ndamane/Independent Newspapers
The Department of Trade, Industry, and Competition (DTIC) said it is committed to finding a long-term solution to avoid the closure of ArcelorMittal South Africa’s (AMSA) steel operations.
Last week, AMSA said that it had no choice but to close its Longs Business, which may result in losing about 3,500 jobs at the Newcastle Works, Vereeniging Works, and the rail and structures subsidiary, ArcelorMittal Rail and Structural (AMRAS).
This decision follows continuing weakness in local and international steel markets.
“Steel production is anticipated to cease by late January 2025, with the wind-down of the remaining production processes completed in the first quarter of 2025,” the company said.
The DTIC spokesperson, Yamkela Fanisi said the department is trying to get all the relevant people to come to the table to avoid major job losses.
“Look, the future of the industry requires strong partnerships by all the stakeholders on the table, both public and private sector,” he explained.
“But as an immediate fact, as an immediate issue on this one, DTIC will engage with relevant stakeholders to try to put various ways in which the matter of AMSA can be resolved and possibly make some recommendations even to the president on how we can respond to the matter,” Fanisi said.
The department also noted that it is working hard to address the structural issues affecting the company’s longs steel business.
“The broader focus should also be on addressing productivity improvements and supply chain efficiencies, investments in low-carbon technologies, competitiveness and regaining the market share,” the DTIC said.
“It is also important that public and private sector entities and companies commit themselves to procure locally manufactured steel products in their projects; Undoubtedly, such a commitment will contribute positively to aggregate demand, job creation and economic growth in South Africa,” the department added.
Networth Investments has offered to buy out a controlling stake in AMSA from its parent company, ArcelorMittal Holding AG.
The investment firm said it could make the group profitable rapidly, without job losses.
In November 2024, Networth, with the support of the DTIC and the Industrial Development Corporation (IDC), extended an enquiry and offer to buyout ArcelorMittal Holding AG’s 70% shareholding in AMSA at R4.7 billion.
The firm also committed to invest around R16 billion to fund upgrades and decarbonisation, with the aim of avoiding the shutdown of Newcastle, Vereeniging and Highveld AMRAS Steel mills.
ArcelorMittal Holding AG’s response to Networth was that “while circumstances may change later, they are not contemplating the sale of the interest in AMSA”.
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