Hope crushed for 100,000 jobs in South Africa

South Africa’s largest steel producer has confirmed its plans to shutter its long steel business by the end of September 2025.

ArcelorMittal South Africa (AMSA) said limited progress has been made in addressing the main structural impediments to its business’s sustainability.

The company informed the market on Monday, 14 July 2025, that, without further financial support, its long steel business will close at the end of September this year.

AMSA announced its plans to shut down this business in 2023, citing prolonged weak economic conditions, logistical and energy challenges, and unsustainable competition from low-cost imports.

Hopes for a reversal arose in 2024 when AMSA indicated signs of economic recovery in South Africa, particularly in the manufacturing sector. 

The company engaged extensively with the government to address the industry’s challenges, aiming to safeguard the 3,500 direct jobs under threat.

However, in January 2025, AMSA confirmed that it plans to move ahead with winding down its long steel business.

This is expected to result in at least 3,500 direct job losses and significant disruptions to supply chains, with around 100,000 jobs expected to be indirectly affected.

Following the January announcement, AMSA decided to delay its plans by a month to fulfil orders.

In March 2025, AMSA confirmed another delay in its plans after the Industrial Development Corporation (IDC) stepped in and provided over R1.68 billion in funding to keep the business running for another six months.

In those six months, there was hope that the government could take steps and implement measures to address the structural problems constraining South Africa’s steel industry.

However, in its announcement in July, AMSA said limited progress has been made in this regard.

“High imports continue to flood into the domestic market. Transnet’s rail performance deteriorated to its lowest levels ever, resulting in significantly elevated operating risk and unaffordable additional cost being borne by the company,” it said.

AMSA said that, during the deferral period, it has been exploring several strategic options, with the help of the IDC.

However, it said the longs business will only be able to continue with financial support, as AMSA cannot bear any further financial risk associated with this unit’s continued operations.

It warned that, unless a solution is implemented timeously, AMSA may have no option but to take certain operational steps to prepare for the wind-down process well in advance of 30 September 2025.

“Notwithstanding, the Longs Business will continue to trade until the end of September 2025, having regard to the commitments made to its customers,” the company said.