ArcelorMittal South Africa Limited (AMSA), a subsidiary of Indian-born British steel magnate Lakshmi Mittal, has announced the closure of its long steel plants in South Africa, a move set to impact over 3,500 jobs. This decision follows AMSA's November 2023 announcement to place its long steel business into care and maintenance, citing persistent weak economic conditions, logistical and energy challenges, and unsustainable competition from low-cost imports, particularly from China.

Despite efforts to explore alternatives with government and stakeholders, AMSA stated that no sustainable solutions were found. "We are disappointed that our efforts over the past year have not yielded a sustainable resolution," said CEO Kobus Verster. He highlighted the structural challenges facing South Africa’s steel industry, including competition with international and local players, which have not been adequately addressed. "We had hoped to avoid this outcome, especially during a period when South Africa can ill-afford job losses and further erosion of industrial capacity," Verster added.

AMSA had engaged extensively with government and labor representatives to mitigate the socioeconomic impact on Newcastle and surrounding communities. While not seeking subsidies, the company had requested policy support to address structural issues within the steel sector. Despite targeted interventions and an extension of operations throughout 2024, these efforts fell short. AMSA emphasized ongoing engagement with the government since December 2023 but noted that the necessary policy initiatives to level the playing field had not materialized.

Initial optimism from rising international steel prices, driven by Chinese stimulus measures, was short-lived. By year-end 2024, AMSA concluded that winding down the long steel business was unavoidable. The company committed to a responsible closure process to minimize impacts on employees and stakeholders while maintaining the sustainability of its remaining operations.

Steel production at the Newcastle plant is expected to cease by late January 2025, with the wind-down of remaining processes completed in the first quarter. Coke-making operations in Newcastle will continue on a reduced scale to align with lower demand. The South African Iron and Steel Institute (SAISI) reported that South Africa's crude steel production for the year up to November 2024 stood at 4.42 million tonnes, a 2.3% decline year-on-year and about 30% below 2018 levels. This places South Africa behind Egypt and Algeria in African steel production, with countries like Zimbabwe, Kenya, and Tanzania expanding their steel industries rapidly.

AMSA originated from the former state-owned steelmaker Iscor, which Mittal revitalized before acquiring. The closure marks a significant chapter in South Africa's industrial history and highlights the urgent need for structural reforms to sustain the country's steel industry.