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Key Points
- The steelmaker will close its long steel operations by April, cutting 3,500 jobs after failing to secure government support.
- ArcelorMittal SA's long steel division posted a R1.1 billion ($58.87 million) loss in 2024, up from R600 million ($32.1 million) in 2023.
- The company rejected a $1 billion buyout in 2024 and is shutting plants as cheap Chinese imports and high costs squeeze margins.
ArcelorMittal South Africa (ArcelorMittal SA), a Gauteng-based steelmaker linked to South African businesswoman Noluthando Gosa, will shut down its long steel operations by April after failing to secure government support, the company said Friday.
The closure will result in the loss of about 3,500 direct and indirect jobs. The company has been struggling with weak local demand, rising competition from scrap-based mini-mills, and an influx of cheaper Chinese imports. After prolonged discussions with authorities, ArcelorMittal SA said it had no choice but to move forward with the shutdown.
Crisis in South Africa’s long steel sector
ArcelorMittal SA’s long steel division produces fencing material, rail, rods, and bars used in construction, mining, and manufacturing. The company plans to begin shutting down its blast furnaces in early March, with the final batch of steel expected by late March or early April. Full transition into care and maintenance will be completed by the second quarter of 2025.
“Despite extensive discussions, the structural challenges affecting our long steel business remain unresolved,” ArcelorMittal SA said in a statement. “We were unable to avert what will be a significant negative impact on the economy.”
The steelmaker had pushed for government intervention, including the removal of an export tax on scrap metal that it argued gave recyclers an unfair advantage, import tariffs to shield local manufacturers, and lower electricity and freight rail costs. However, authorities did not meet these demands, leading the company to move ahead with the closure.
Mounting losses force strategic shift
The long steel division’s operational loss doubled to R1.1 billion ($58.87 million) in 2024 from R600 million ($32.1 million) the previous year. ArcelorMittal SA also posted a wider headline loss of R5.1 billion ($272.95 million) for 2024, compared to R1.89 billion ($101.15 million) in 2023, highlighting the financial pressure on the company.
With an annual production capacity of seven million tonnes, ArcelorMittal SA is a major supplier to industries such as construction, automotive, and manufacturing. The restructuring is part of a broader effort to stabilize its operations amid persistent financial challenges.
Gosa, a non-executive independent director with a 6.15 percent stake in the company, has played a key role in shaping its strategic decisions. In October 2024, ArcelorMittal SA rejected a $1 billion acquisition offer from Networth Investments, signaling its commitment to a long-term strategy despite ongoing difficulties.
This latest shutdown follows the closure of ArcelorMittal SA’s Newcastle and Vereeniging steel plants, which also resulted in 3,500 job losses. The timing—just 25 days after announcing the wind-down of its long steel division—has raised speculation about whether the government might step in at the last minute to soften the economic impact.
