One of South Africa’s most important businesses saved – again

ArcelorMittal South Africa (AMSA) has yet again delayed the wind-down of its Long Steel business, potentially saving thousands of jobs.

AMSA said the decision to wind down its Longs Business has been delayed by at least six months up to 31 August 2025.

In January, the company 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 despite talks with the government.

The Longs Business will only continue to operate with financial support, as the company cannot bear any further financial risk associated with the business’s operations.

A R1.7 billion facility from the state-owned Industrial Development Corporation (IDC) enabled the deferral of the wind-down of the longs business.

The IDC facility is repayable by agreement between the parties, which is based on the financial performance, solvency and liquidity of Longs Business.

Following a cash injection of R380 million in February, AMSA was previously able to delay the shutdown of the Longs Business.

ArcelorMittal South Africa (AMSA) has again delayed the shutdown of its Longs Business following a R380 million cash injection.

The group has also made certain undertakings regarding the continued operation of the Longs Business and retention of jobs for the deferral period.

The Section 189(3) of the Labour Relations Act consultation process will also be suspended. The group previously warned that 3,500 direct and indirect jobs could be lost due to the closure.

However, other areas outside the Longs Business may be subject to restructuring due to operational reasons.

The Newcastle Works blast furnace will also continue operating, and the company envisages that the needs of its Longs Business customers will be met during the deferral period.

AMSA’s Long Steel business is essential for many manufacturers in South Africa, especially auto manufacturers.

Working with the government

The company has also received a Temporary Employee Relief Scheme (TERS) grant to assist with funding employee costs for the Longs Business. Funds for TERS come from the UIF.

The TERS funding will also help reduce the drawdown required against the IDC Facility.

The group added that the government will use the deferral period to address the structural problems identified by the company. This will aim to put the Longs Business on a sustainable footing.

During the deferral period, AMSA will focus on implementing improvements to optimise the Longs Business operations and enhance the product offering and customer supply chain reliability.

“The intervention by the Government and the IDC will assist in keeping the Longs Business operational while a viable, sustainable long-term solution is being sought,” said AMSA

“Based on the engagements between the company and government to date, it is the company’s understanding that a more market-related and less punitive PPS and export tax on scrap dispensation will be implemented soon and that the implementation of safeguards is imminent.”

“This will be strongly supportive of levelling the steel industry playing field to the benefit of the country.”

The group said it is encouraged by emerging signs of demand growth in the South African economy.

This has massive potential for the steel market due to recent opportunities emerging in several sectors, such as energy.

If this happens, the group expects it to have a positive effect on the high-quality products manufactured and supplied by the Longs Business in particular.