Newcastle Community Urges Stronger Government Action Amid ArcelorMittal Shutdown Threat

The community of Newcastle, KwaZulu-Natal, has called on the South African government to take swift and decisive action to prevent the potential loss of thousands of jobs as ArcelorMittal South Africa (Amsa) prepares for a major shutdown. Although Amsa has delayed its plans to close its Newcastle and Vereeniging steel operations until March, the future of these plants remains uncertain, and the local community is deeply concerned.

At Amsa’s annual results presentation on Thursday, the company confirmed that it had postponed the planned shutdown of its longs division in Newcastle and Vereeniging by a month. The delay comes amid ongoing talks with the government for further support, following a R380 million loan from the Industrial Development Corporation. A final decision on the plant closures will be made in mid-February.

This reprieve, however, does little to ease the pressure felt by the community, as Amsa’s financial results show the severe strain on the South African steel industry. The company reported a massive headline loss of R5.1 billion for the year, a stark increase from the previous year’s loss of R1.89 billion. Amsa has warned that the steel sector is facing its most significant challenge since the 2008/09 global financial crisis.

Amsa’s financial woes are compounded by rising steel imports, which reached their highest recorded levels in 2024, accounting for 33.6% of South Africa’s Apparent Steel Consumption. While imports declined in the second half of the year, they continue to pose a major threat to local producers, highlighting the growing challenges for the South African steel industry.

Johan Pieters, chairman of the Newcastle Growth Coalition, expressed cautious optimism about the delay. He welcomed the additional time for negotiations between Amsa and the government, emphasising the broader economic implications. “This is not just about Newcastle; it’s about the over 100,000 jobs in the steel industry, both upstream and downstream, across South Africa,” Pieters said. He remains hopeful that the discussions will lead to a positive outcome.

However, the Newcastle Residents’ Forum (NRF) voiced deep concerns about the long-term impact of the proposed shutdown. Matthew Shunmugam, spokesperson for the NRF, condemned the decision, noting that the closure could lead to the loss of approximately 3,500 direct and indirect jobs, devastating local families and communities.

“The potential closure will have far-reaching consequences,” Shunmugam said. “We demand that Amsa reconsider its decision and explore alternative solutions that would safeguard these jobs.”

Despite reports suggesting a potential R1 billion rescue package, Amsa has signalled its intention to move forward with the shutdown, citing the unsustainable financial conditions of the operation. Shunmugam and the NRF are calling on the government to intervene urgently to protect the jobs and livelihoods of those impacted.

“The government must step in and provide critical support to Amsa, its employees, and the surrounding communities,” Shunmugam stressed. “We will continue to monitor the situation closely and advocate for our community members who are at risk.”

As discussions continue, the Newcastle community and labour representatives are standing united, hoping for a resolution that will prevent widespread job losses and protect the region’s economy.

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com