ArcelorMittal South Africa (AMSA) has restarted acquisition talks with the Industrial Development Corporation (IDC) after earlier negotiations failed. However, following the company’s latest application for a 51% anti-dumping duty on certain products, the National Employers’ Association of South Africa (Neasa) is questioning whether saving AMSA is worth the cost to the industry.
The company confirmed it was engaged in discussions with the IDC in an official announcement on the JSE’s Stock Exchange News Service: “ArcelorMittal South Africa, ArcelorMittal Group, and the Industrial Development Corporation SOC Limited are engaged in advanced discussions to find a sustainable solution based on a non-binding term sheet regarding a potential transaction.”
Talks between AMSA and key stakeholders collapsed late last year after the steel producer rejected an informal proposal of about R8.5 billion, which included the repayment of R7 billion in debt to its parent company.
Negotiations between AMSA, the IDC and the Department of Trade, Industry and Competition began in November 2023, following the announcement that plans were underway to shut down two steel mills in Newcastle and Vereeniging. These mills produced grades vital to the country’s automotive and mining sectors. The IDC, which holds about an 8% stake in AMSA, extended a loan to the company in an attempt to prevent the closures.
Despite this intervention, AMSA closed both long steel production plants, with both facilities placed under care and maintenance by November 2025. The IDC has previously stated that AMSA’s mills are critical to South Africa’s industrial base. In light of these renewed negotiations, Neasa has issued a warning that the ‘privilege’ of maintaining the financially unstable primary steel producer comes at a huge cost.
Chief Executive of Neasa, Gerhard Papenfus said: “Government, at AMSA’s request, is persistently expanding and increasing its web of import duties on raw materials to protect AMSA, which, mainly due to it being such an antiquated mill, is a high-cost producer that cannot compete with international modern mills without government intervention.”
He said that the latest example of this was AMSA’s recent application for the introduction of a 51% anti-dumping duty on certain flat-rolled products imported from China. Should this duty be implemented and added to the 10% duty already being applied, it would mean that importers would pay a 61% premium should they wish to import flat steel.
Papenfus said: “Although not the only reason for the persisting decline of the Steel Industry, the uncompetitive price of steel severely impacts its sustainability, and for as long as government continues to give in to AMSA’s request for more protectionist duties, the adverse impact on the Steel Industry will continue. Within the current AMSA-protecting duty-driven approach, AMSA is the only winner. It is apparently not that concerned about the perpetual shrinking of the Steel Industry, as AMSA, owing to the protection of a firewall of duties, will not be required to invest but still be able to sell its steel at an exorbitantly high price to a smaller market.”
Neasa believes this artificial inflation of prices will affect all citizens, as the ensuing increased production costs will be passed on to the consumer.
Papenfus said: “Due to being uncompetitive, AMSA recently closed its long steel production facilities in Newcastle and Vereeniging, but somehow, and certainly not without challenges, most of the Industry is managing to survive. The private sector is sufficiently equipped and adaptable to overcome this type of challenge. In the case of flat steel products, the closure of AMSA’s Vanderbijl facilities might be a bit more challenging, but the private sector will, once again, step up to fill the gap. The eventual closure of AMSA’s flat steel production is probably inevitable, and the sooner that day arrives, the better. From that moment onwards, the Steel Industry will have access to steel at competitive prices. This will be an important step towards the normalisation of the Steel Industry.”
