The government is considering a R1 billion bailout for ArcelorMittal South Africa (AMSA) to prevent the closure of its Longs Steel mills in Newcastle and Vereeniging. The potential closure has sent shockwaves through the community, with around 3,500 direct and indirect jobs at risk in Newcastle alone.
AMSA cited high energy costs, logistics constraints, and scrap tax issues as the reasons for winding down its longs business. This announcement has prompted government officials to explore options to prevent mass job losses.
KwaZulu-Natal’s MEC for Economic Development, Tourism and Environmental Affairs, Rev. Musa Zondi, has written to the Minister of Trade, Industry and Competition, Mr Parks Tau, requesting further engagement to address the impending crisis.
“The closure of AMSA’s Newcastle and Vereeniging operations could devastate the local economy, leaving thousands without work and negatively impacting regional suppliers. Furthermore, if this is not resolved, it will have a ripple effect on the broader economy of KwaZulu-Natal, threatening economic stability and growth in the province. We urge the Minister to explore all possible solutions to prevent this closure, including further dialogue with AMSA and stakeholders,” said Rev. Zondi.
High-level discussions have taken place, including a meeting between Steel Magnate Lakshmi Mittal and South African ministers at the World Economic Forum in Davos, Switzerland. AMSA CEO Kobus Verster has also engaged in crisis talks with government officials, leading to the proposed rescue package.
Minister of Trade, Industry and Competition Parks Tau is spearheading negotiations to secure the bailout. He has emphasised the critical role of locally produced steel in powering infrastructure projects, including power transmission towers, rail systems, and road construction.
As the closure deadline looms, stakeholders, including automotive manufacturers, are urging the government to delay shutdowns and secure alternative supply arrangements to prevent mass job losses.
