Table of Contents
Key Points
- ArcelorMittal SA, linked to Noluthando Gosa, seeks a $170.11 million bailout to avert steel mill closures, citing high costs, import competition, and weak policy support.
- Despite prior interventions, including $83 million from the IDC, ArcelorMittal SA faces worsening losses.
- The steelmaker urges regulatory reforms as South Africa’s manufacturing sector struggles, with 3,500 jobs at risk.
ArcelorMittal South Africa (ArcelorMittal SA), a Gauteng-based steelmaker linked to South African businesswoman Noluthando Gosa, is seeking a R3.1 billion ($170.11 million) bailout to prevent the permanent shutdown of its steel mills. This follows the official closure of its Newcastle and Vereeniging plants after months of unsuccessful rescue negotiations. If secured, the bailout could safeguard about 3,500 direct and indirect jobs in surrounding communities.
ArcelorMittal SA seeks lifeline amid mounting challenges
ArcelorMittal SA’s plea for financial support to keep its long division afloat, comes nearly 70 days after announcing plans to wind down operations due to stalled government negotiations. The Industrial Development Corporation (IDC), which holds a 6.4 percent stake, is speculated to be a key financier, potentially extending operations beyond the second quarter.
Despite prior interventions—including a R380 million($20.85 million) government bailout and R1.2 billion($65.84 million) in working capital from the IDC—ArcelorMittal's financial distress has worsened. Persistently high energy and transport costs, a surge in cheaper imports from China, and weak policy support have eroded its competitiveness. The company has now applied for Unemployment Insurance Fund relief to cushion the impact on 3,500 affected workers, at an estimated cost of R2 billion($109.74 million).
The long steel division reported an operational loss of R1.1 billion ($58.9 million) in 2024—nearly double the previous year's R600 million ($32.1 million) loss. The potential collapse of ArcelorMittal SA’s long-steel business underscores the fragility of South Africa’s manufacturing sector, where rising costs, infrastructure challenges, and limited government support threaten industrial sustainability. Without a viable solution, the fallout could severely impact the nation’s economic ambitions and workforce.
ArcelorMittal SA’s hurdles signal deepening industrial crisis
ArcelorMittal SA’s decision to halt long-steel production highlights the broader struggles of South Africa’s industrial sector. Weighed down by numerous challenges, the Johannesburg-listed firm, valued at R1.38 billion ($73.9 million) on Feb.1, now dwindled to R1.15 billion($63.22 million), deemed its operations unsustainable.
Noluthando Gosa, an influential leader and non-executive independent director at ArcelorMittal South Africa, holds a 6.15 percent stake in the company, highlighting her significant influence within the business.
The closure of its Newcastle and Vereeniging plants threatens 3,500 jobs, with Africa's largest steel producer seeking relief from the Unemployment Insurance Fund. Financial pressures persist despite a R1.2 billion($65.87 million) capital injection from the Industrial Development Corporation and an additional R380 million($20.85 million) in support.
The government is considering measures to preserve long-steel capacity, while ArcelorMittal is pushing for regulatory reforms, including relaxed antitrust laws and lower Eskom tariffs. With industrial decline accelerating, South Africa faces mounting economic and employment risks absent decisive intervention.
