The South African government is actively engaging with ArcelorMittal South Africa (AMSA) to prevent the planned closure of the long steel plant in Newcastle and to recalibrate the steel industry's role in the national economy.
In a statement on Wednesday night, the department of trade, industry and competition (DTIC) said that it and the Industrial Development Corporation (IDC) have provided financial assistance to AMSA.
According to the statement, AMSA received R380 million in February 2025, this was in addition to the R1 billion working capital facility extended by the IDC in June 2024.
AMSA is facing significant challenges, leading to the proposed closure of its steel-making operations in Newcastle and Vereeniging. The company has been struggling with weak demand, high energy and logistics costs, and competition from low-cost imports.
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These issues have resulted in substantial financial losses, including an operational loss of R1.1 billion for its long steel business in 2024.
The department said that further financial support has been approved under the Temporary Employee/Employer Relief Scheme (TERS), amounting to nearly R417 million. This funding aims to sustain 2 982 employees for the next 12 months.
However, as a condition of this support, the department said AMSA is required to participate in the Productivity SA turnaround and recovery programme.
The government clarified that these interventions do not constitute direct financial relief for AMSA but form part of a broader strategy to protect South Africa's steel industry and preserve its industrial capacity.
It said that the state remains committed to exploring alternative solutions to sustain long-term steel production and safeguard jobs.
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AMSA closure is expected to disrupt various industries and significantly impact local communities. Unions have called on government to act to save jobs, with the National Union of Metalworkers emphasising the importance of maintaining South Africa's steel production capacity to avoid further de-industrialisation and economic decline.
South African Federation of Trade Unions said the closure would have catastrophic consequences. It blamed privatisation and the reliance on imported steel which it says undermines local production and industrial capacity.
The department said that a technical working group, comprising key stakeholders such as the presidency, the DTIC, the departments of employment and labour, electricity and energy, transport, and treasury, alongside the IDC, the South African Revenue Service, Eskom, Transnet, and AMSA, continues to address policy-related challenges affecting the steel industry's operations.
The company announced in a statement on Wednesday that is in discussions with stakeholders about funding and related issues to delay the closure of its Longs Business.
It said:
Without an agreement on these matters, the deferral will not be possible. Consequently, the wind-down process continues while funding talks are ongoing.
AMSA said that it has received various strategic proposals, but none have resulted in a firm offer under the Companies Act, 2008. It said that it will keep "exploring strategic alternatives as appropriate".
