Government Weighs R1 Billion Bailout for ArcelorMittal South Africa Amid Job Loss Concerns

In a decisive bid to avert the impending shutdown of its Longs Business, ArcelorMittal South Africa (AMSA) is at the center of discussions surrounding a potential R1 billion bailout.

The steel giant has announced plans to close its long-steel operations in Vereeniging and Newcastle by January 2025, a move that threatens to jeopardize around 100,000 jobs nationwide.

Facing challenges such as skyrocketing energy costs and a flood of low-cost steel imports, primarily from China, AMSA finds itself in a precarious position.

As a cornerstone of South Africa’s infrastructure and manufacturing sectors, the company’s struggles underscore broader economic vulnerabilities.

Trade and Industry Minister Parks Tau is spearheading negotiations to secure the bailout, emphasizing the critical role of locally produced steel in powering projects tied to President Cyril Ramaphosa’s $257 billion infrastructure plan, including power transmission towers, rail systems, and road construction.

Industry leaders warn that without intervention, the shift to imported steel could destabilize supply chains and escalate costs for local manufacturers.

AMSA CEO Kobus Verster acknowledged that year-long discussions with government officials have yet to yield viable solutions.

With the closure deadline looming, stakeholders—including automotive manufacturers—are urging the government to delay shutdowns to secure alternative supply arrangements and prevent mass job losses.

As negotiations continue, all eyes are on whether a resolution can be reached to safeguard South Africa’s steel sector, ensuring economic stability and protecting thousands of livelihoods.

Also Read

SASSA to suspend SRD grants where fraud is suspected

Eskom’s Turnaround Efforts: Progress, Projections, and Challenges Ahead