ArcelorMittal, the world’s second largest steelmaker, announced on Tuesday it will close part of its steel operations in South Africa, putting approximately 4 000 jobs at risk according to union estimates.
The steel giant’s long steel division, which produces critical construction materials including wires, beams, and railway tracks, has struggled for years against a perfect storm of challenges: a shrinking domestic market, South Africa’s failing railway infrastructure, and chronic power outages that have devastated the country’s economy.
ArcelorMittal South Africa (AMSA) revealed it had spent years attempting to secure the business’s future, including extensive negotiations with government officials and other stakeholders ahead of a 30 September deadline. However, these efforts have proven unsuccessful.
“Unfortunately, no solution has been concluded as yet,” the company stated Tuesday.
The long steel division represents approximately one-third of ArcelorMittal’s South African operations, while the remaining two-thirds consists of flat steel production used in automotive, aerospace, and household appliance manufacturing. The company emphasized that its flat steel business will continue operating.
Newcastle facility mothballed
As part of the wind-down process, ArcelorMittal has placed a blast furnace at its Newcastle facility -located 340 km north of Durban – into “temporary care and maintenance.”
Trade union Solidarity warned that the closure could trigger broader economic consequences, particularly given the looming threat of 30% U.S. tariffs on South African steel exports.
“If large companies like AMSA can no longer keep their heads above water, the government must realize that the country is on the brink of an industrial disaster,” said Willie Venter, Solidarity’s deputy secretary-general. The union described the potential job losses as part of “a retrenchment bloodbath that could hit multiple industries.”
Economic headwinds mount
The closure comes as South Africa grapples with an unemployment rate exceeding 30 percent—a critical factor constraining the nation’s already struggling economy.
AMSA had previously outlined the challenges facing its operations, citing “subdued market demand, disruptive rail and electricity interruptions,” alongside fierce competition from imported steel products. The company noted that domestic sales account for nearly 80% of its local production.
The announcement underscores the broader industrial challenges facing South Africa as aging infrastructure and economic instability continue to undermine manufacturing competitiveness.
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