ArcelorMittal South Africa Limited (AMSA), a subsidiary of ArcelorMittal led by steel tycoon Lakshmi Mittal, has announced the closure of its long steel production facilities in South Africa, affecting over 3,500 employees. The decision follows AMSA’s move in November 2023 to place its long steel division under care and maintenance due to prolonged economic challenges, high logistics and energy costs, and intense competition from cheaper imports, particularly from China. While the government initially intervened to delay the closure and explore alternatives, no sustainable solution was found.
“We are deeply disappointed that despite our efforts over the past year, we couldn’t reach a viable resolution,” said AMSA CEO Kobus Verster. He highlighted the structural issues affecting the steel industry, which required policy support to level the playing field against international and domestic competitors.
Verster emphasized that AMSA worked extensively with stakeholders, including government and labor unions, to address concerns about job losses and the economic impact on Newcastle and nearby communities, where the plant is located. However, targeted interventions and initiatives failed to provide the necessary relief.
While AMSA acknowledged some progress in addressing industry constraints, it stated that the measures taken were insufficient. The company cited the lack of significant policy action and the short-lived recovery in global steel prices as reasons for its decision to proceed with the closure.
Steel production at the long steel facilities is set to end by late January 2025, with the winding down of remaining operations expected by the first quarter of the year. Despite the shutdown, AMSA plans to continue operating its coke-making unit in Newcastle at a reduced scale to meet diminished demand.
The South African Iron and Steel Institute (SAISI) reported a 2.3% drop in the country’s crude steel output for 2024, with production levels now 30% lower than in 2018. South Africa has fallen behind countries like Egypt and Algeria in steel production, while nations such as Zimbabwe, Kenya, and Tanzania are making strides in developing their steel industries.
AMSA, which originated from the former state-owned steelmaker Iscor, played a significant role in South Africa’s steel sector under Mittal’s leadership. The company remains optimistic about restructuring its remaining operations to ensure competitiveness and profitability, despite the challenging circumstances.
