South African gov’t engages ArcelorMittal SA, linked to Noluthando Gosa, to prevent steel plant closure

Key Points

• South Africa is negotiating with ArcelorMittal SA to prevent the shutdown of key long steel plants, aiming to protect jobs and industrial supply chains.
• ArcelorMittal SA reported a R1.1 billion ($58.9 million) loss in 2024, with its total headline loss widening to R5.1 billion ($273 million).
• The steelmaker’s planned shutdown could impact 100,000 indirect jobs, forcing industries to rely on costly imports amid economic and energy challenges.

The South African government is in talks with ArcelorMittal South Africa (ArcelorMittal SA), a Gauteng-based steelmaker linked to the country’s businesswoman Noluthando Gosa, to prevent the shutdown of key long steel production facilities—a move that could disrupt industries and deepen economic strain. The discussions follow failed rescue efforts and mounting financial pressure on the company.

The Department of Trade, Industry and Competition (DTIC) said Monday that it is working with ArcelorMittal SA to keep long steel production going, stressing the sector’s importance to South Africa’s economic recovery. “The steel industry plays a crucial role in our reconstruction efforts, and we are actively engaging with ArcelorMittal SA to find a solution,” the department said in a statement.

Job losses and industry fallout

The Gauteng-based steelmaker recently announced plans to idle its long steel plants in the second quarter of 2024, affecting about 3,500 direct jobs. The shutdown, initially scheduled for January, was pushed back by a month to complete outstanding orders. The former state-owned steelmaker, acquired in 2003 by billionaire Lakshmi Mittal’s global steel empire, said it will begin shutting blast furnaces in March and halt steel production by early April.

CEO Kobus Verster emphasized the broader impact, noting that the Newcastle and Vereeniging mills—supplying 350,000 to 400,000 tonnes of steel annually—support over 100,000 indirect jobs. “No other South African company currently produces these materials,” Verster said.

Rising costs and economic pressure

The looming shutdown has raised alarm across industries that depend on ArcelorMittal SA’s steel, with businesses warning that imports will be costly and unreliable. The company, which has an annual production capacity of seven million tonnes, is a key supplier to sectors such as construction, automotive, and manufacturing.

Financial struggles have deepened. ArcelorMittal SA’s long steel division reported an operational loss of R1.1 billion ($58.9 million) in 2024—nearly double the R600 million ($32.1 million) loss from the previous year. Its total headline loss for 2024 widened to R5.1 billion ($273 million) from R1.89 billion ($101 million) in 2023, highlighting the scale of its crisis.

Noluthando Gosa’s role and ArcelorMittal SA’s future

Noluthando Gosa, a prominent South African businesswoman and independent non-executive director, holds a 6.15 percent stake in ArcelorMittal SA and has been involved in strategic decision-making as the company navigates its financial turmoil.

This latest development comes after ArcelorMittal SA’s previous closures of the Newcastle and Vereeniging plants, which also resulted in 3,500 job losses. In October 2024, the company turned down a $1 billion buyout offer from Networth Investments, signaling its commitment to long-term restructuring despite financial strain.

As negotiations continue, the government faces growing pressure to broker a deal that safeguards jobs and keeps the industry afloat. South Africa’s steel sector is already struggling with high production costs, energy shortages, and weak demand—making a resolution to AMSA’s crisis even more urgent.