 has announced the closure of its long-steel products business, a move expected to affect approximately 3,500 jobs.){kind=link}
In a major development for the South African steel industry, ArcelorMittal South Africa (AMSA) has announced the closure of its long-steel products business, a move expected to affect approximately 3,500 jobs.
The company has faced increasing pressure from rising costs and a challenging economic environment, with high logistics and energy expenses contributing to the decision.
AMSA cited the unsustainable cost structure and insufficient government policy interventions as key reasons for its decision to cease production at its Newcastle and Vereeniging plants, as well as its AMRAS rail mill.
The wind-down process is expected to be completed by the first quarter of 2025, with steel production scheduled to stop by the end of January.
This announcement marks the culmination of several years of financial difficulties for AMSA, compounded by a combination of weak market conditions, high energy prices, and rising competition, particularly from cheap Chinese steel imports.
The long-steel works closure follows months of careful consideration by the company, which had previously shelved a plan to close its KwaZulu-Natal steel plant in 2024, opting instead to explore ways to make it more viable.
The closure will have a significant impact on the steel industry in South Africa, which has been grappling with its most sustained period of hardship since the 2008 global financial crisis.
AMSA’s decision comes as part of a broader trend within the industry, which has seen declining production, rising input costs, and increased imports from overseas markets, particularly from China.
In response to the announcement, labor unions have voiced their concerns over the potential job losses. With thousands of workers set to be impacted, unions are calling for urgent government intervention to mitigate the social and economic fallout of the closure.
Despite the closures, AMSA has stated that it will maintain a scaled-back coke-making operation at its Newcastle site due to reduced demand for the product.
The company also emphasized that the closure is part of its broader strategy to adapt to changing market conditions and focus on more sustainable operations.
The closure of the long-steel business is expected to reverberate through the South African economy, especially in the industrial and construction sectors, which rely heavily on locally-produced steel. While AMSA has pledged to support its employees during the transition, the loss of 3,500 jobs will undoubtedly have a significant social and economic impact on the affected communities.
As the company navigates these challenging times, industry experts are urging both the private and public sectors to address the structural issues facing the South African steel industry, including high energy costs, competition from imports, and the need for a more supportive policy framework.
This closure represents a pivotal moment for ArcelorMittal South Africa and the broader South African steel industry, highlighting the complex challenges of maintaining a competitive manufacturing sector in an increasingly globalized economy.
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