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Government Races to Save 100,000 Jobs Amid ArcelorMittal South Africa Closure
The South African government has stepped in to address the impending closure of ArcelorMittal South Africa’s (AMSA) Long Steel Business, a decision that threatens up to 100,000 jobs across the country.
The closure, driven by prolonged economic challenges, high logistics and energy costs, and competition from low-cost imports, is set to have widespread repercussions on the local steel industry and its downstream sectors.
ArcelorMittal’s Struggles and Closure Announcement
In November 2023, AMSA announced plans to place its Long Steel Business into care and maintenance, citing unsustainable financial pressures. Efforts to secure interventions in 2024 failed to deliver the structural changes required to keep the operation viable.
The company’s management stated:
“Persistent high logistics and energy costs, combined with insufficient policy interventions, have left the Longs Business unsustainable.”
The closure could result in 3,500 direct and indirect job losses, with an additional 50,000 to 100,000 jobs at risk across related industries.
Steel Industry’s Critical Role in South Africa
AMSA is a vital player in South Africa’s economy, producing 32% of the country’s steel. Its unique high-tech steel products are essential for industries such as mining and automotive manufacturing, meaning the closure could disrupt several sectors.
“Without AMSA’s high-tech products, Original Equipment Manufacturers may discontinue certain manufacturing lines in South Africa, exacerbating job losses,” said Justin Corbett, CEO of Rand York Casting.
Government’s Intervention Plan
The Department of Trade, Industry and Competition (DTIC) has been working with AMSA and other stakeholders to find a long-term solution.
A technical working group was formed in 2024, including:
- DTIC
- Departments of Electricity and Energy, Transport
- Eskom and Transnet
- Private sector stakeholders
This group held regular discussions until December 2024, aiming to address structural issues and restore the viability of the Long Steel Business.
Minister of Trade, Industry and Competition Parks Tau emphasized the government’s commitment:
“The steel industry is critical to South Africa’s reconstruction and recovery. Addressing AMSA’s challenges is a priority for job creation and economic growth.”
Proposed Solutions
The DTIC has outlined several initiatives to address the crisis:
- Addressing Structural Issues: Tackling logistics and energy costs, improving productivity, and enhancing supply chain efficiency.
- Investments in Green Technology: Encouraging the steel industry to adopt low-carbon solutions to enhance competitiveness.
- Local Procurement: Urging public and private entities to prioritize locally manufactured steel in projects to boost demand and sustain jobs.
While AMSA’s closure decision remains a significant challenge, the government’s comprehensive approach underscores the importance of saving the steel industry.
By working with stakeholders and implementing sustainable policies, South Africa aims to mitigate the potential economic fallout and protect jobs in critical sectors.
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