ArcelorMittal South Africa (AMSA) announced it has started the process of shutting down its Newcastle long steel unit, which has been in operation for 78 years. The company informed its employees that operations will be gradually wound down starting September 1, 2025.
In a notice to staff, AMSA CEO Kobus Verster said that despite ongoing efforts, no solution could be found to keep the unit running. He stressed that without additional funding or government support, continuing operations was no longer feasible. Verster pointed to rising imports, insufficient tariff protection, high electricity costs, and logistical challenges on the rail network as major financial pressures, compounded by weak local demand.
In the first half of 2025, the facility reported a loss of 429 million Rand (USD 23.7 million). Steel sales dropped by 11%, while revenues fell 16.5% to 17.12 billion Rand (USD 947.7 million).
The Newcastle and Vereeniging plants employ around 3,500 people. Workers expressed deep concern over uncertainty, while unions warned of the social and economic fallout, calling the closure “an impending social and economic disaster” and urging the government to take urgent action to support the industry.
The National Energy Regulator of South Africa (NERSA) granted AMSA some relief by lowering electricity costs at the Newcastle and Vanderbijlpark plants. Meanwhile, discussions with the government and the Industrial Development Corporation (IDC) secured emergency funding of 1.7 billion Rand (USD 96.2 million), allowing operations to continue until the end of September. However, no long-term financial support or structural solutions have been secured to ensure sustainability.
Experts warn that the closure will affect not only the steel industry but also other sectors reliant on long steel products, including automotive, construction, and mining.
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