South African government seeks to prevent the closure of ArcelorMittal South Africa plants

South Africa’s Department of Trade, Industry and Competition and the Ministry of Finance are negotiating to prevent the closure of ArcelorMittal South Africa (AMSA) plants and the loss of thousands of jobs, Daily Maverick reports.

The proposal is to create a rescue package for AMSA worth up to R1 billion ($53.6 million). In this way, the government is trying to prevent a crisis in the country’s steel sector. As reported, government agencies, including the Public Investment Corporation, the Industrial Development Corporation, and the Unemployment Insurance Fund, may take part in the collection.

However, at the end of last week, ArcelorMittal said it did not plan to cancel its decision to suspend operations, which will lead to direct and indirect job losses for 3.5 thousand people and affect communities in Newcastle, Werening and surrounding areas. The redundancy process is scheduled to begin on February 6.

In a letter to the unions, Mokele Morabe, ArcelorMittal’s employee relations manager, said the company has not yet received any formal commitments or proposals from the Department of Trade, Industry and Competition regarding the rescue package.

“The ArcelorMittal Group will be open to exploring solutions proposed by the South African government regarding the long products business and the company as a whole,” Morabe said.

In early January 2025, ArcelorMittal confirmed that it will shut down its long products business as it is unprofitable and has become financially unstable.

The shutdown will affect all long products plants, including Newcastle Works, Vereeniging Works and Amras, a subsidiary of the company that produces rails and structures.

ArcelorMittal South Africa’s (AMSA) plans to close its plants in South Africa could hit the country’s infrastructure boom. The products they produce are needed to deploy power poles, rail lines, and new roads – projects that would turn South Africa into a “construction playground.” It is also crucial for the automotive plants operating in the country.