ArcelorMittal South Africa Secures Lifeline: Long Steel Business Shutdown Delayed Again

ArcelorMittal South Africa (AMSA) has once again postponed the shutdown of its Long Steel business, offering a temporary reprieve to thousands of workers and steel industry stakeholders. This decision follows a crucial R1.7 billion financial facility from the Industrial Development Corporation (IDC) and a R380 million cash injection in February.

A Temporary Reprieve for Jobs and Industry

Initially set to wind down due to high energy costs, logistical challenges, and an export scrap tax issue, AMSA’s Long Steel division now has until August 31, 2025, to continue operations. However, this is contingent on ongoing financial support and government intervention to address structural industry challenges.

The postponement means that:

• The Section 189(3) retrenchment consultation process has been suspended.

• Up to 3,500 direct and indirect jobs are temporarily secured.

• The Newcastle Works blast furnace will remain operational, ensuring continued steel supply.

• AMSA will focus on improving its operations, product offerings, and customer supply chains.

Government Support and Strategic Adjustments

The South African government, in collaboration with the IDC, has provided critical support, including funding from the Temporary Employee Relief Scheme (TERS). This helps cover employee costs and reduces the financial burden on AMSA’s emergency funding.

During this deferral period, AMSA and the government aim to address the core challenges affecting the steel industry, including:

• Implementing a more market-aligned export tax on scrap metal.

• Establishing safeguards to level the playing field for local steel manufacturers.

Future Outlook for South Africa’s Steel Industry

Despite ongoing financial pressure, AMSA remains optimistic, citing emerging signs of economic recovery and increasing steel demand, particularly in the energy sector. If demand continues to rise, this could stabilize the Long Steel business and prevent a full-scale closure.

The intervention from both the government and IDC demonstrates the critical role of South Africa’s steel industry in national economic stability and job preservation. However, AMSA will need sustainable solutions beyond short-term relief to secure its future.

{Source BusinessTech}

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com