Warning over jobs bloodbath in South Africa

The Parliamentary Select Committee on Trade, Industry and Cooperation has warned that the imminent shutdown of Arcelor Mittal’s (AMSA) long steel production plants will impact far more jobs than the 3,500 directly affected.

Committee chair Sonja Boshoff said the 3,500 jobs directly impacted by the closures desperately need clear communication about their future—but warned that many more positions were at stake.

She said there will be a ripple effect on small businesses that depend on the steel industry, including those supplying critical sectors such as mining, infrastructure development, and the automotive industry.

“The automotive sector, which relies heavily on steel for manufacturing, will also feel the impact. Disruptions in the steel supply chain could affect production lines, putting even more jobs and economic growth at risk,” she said.

In January, AMSA announced that it had no choice but to wind down its Longs Business amid high energy costs, logistics constraints and an export scrap tax issue.

Although the company had engaged with stakeholders throughout 2023 to find a solution, it said that the package of initiatives sought would not change the fundamentals of the structural problems.

Hoping to prevent the closure, the government facilitated a temporary reprieve in February through a R380 million loan from the state-owned Industrial Development Corporation—one of AMSA’s shareholders.

This provided a brief delay, allowing additional talks and ensuring ongoing supply to downstream customers who rely on the company’s steel.

However, AMSA ultimately determined that no workable solutions had emerged, and at the end of February, it confirmed the final wind-down of the Longs Business.

While the government has said its discussions with AMSA are ongoing, communication about the path forward has not been forthcoming.

While the closures are expected to directly impact 3,500 jobs, the ripple effect could create 13,000 more jobs in the medium term.

According to the National Association of Automotive Component and Allied Manufacturers (NAACAM), the automotive sector employs over 115,000 workers, many of whom could be hit in the longer term if no protective measures are taken.

Trade and Industry Minister Parks Tau said in early March that the government’s intervention in the AMSA wind-down is to protect the sector from the negative impacts of the closures, particularly at the Newcastle plant.

“The steel industry is critical in the reconstruction and recovery plan for the South African economy, particularly, the manufacturing, mining, construction, engineering, and transportation sectors, which are at the centre of the industrialisation, localisation and beneficiation programmes of government,” he said.

However, Boshoff criticised the government’s lack of communication about its ongoing discussions with AMSA, calling the silence “deeply concerning”.

“It is unacceptable that those most affected—the employees and small business owners are left in the dark.

“While we support the government’s efforts to engage with AMSA, these discussions are meaningless if they exclude the very people whose lives and livelihoods hang in the balance,” she said.

AMSA said it would start the winding down of the longs business with the shutdown of the blast furnace in the first week of March.

The last steel from the Longs Business will be produced by late March or early April 2025, and the final wind down into care and maintenance should be fully implemented in Q2 2025.