Table of Contents
Key Points
- ArcelorMittal SA says Transnet Freight Rail missed 40% of delivery targets in 2024, forcing production cuts and delays that triggered steep operational losses.
- Rising tariffs and unreliable logistics, combined with Eskom outages, are undermining ArcelorMittal SA’s financial sustainability and supply chain efficiency.
- Two plants have closed, thousands of jobs are at risk, and the company warns it may liquidate long steel operations without urgent logistics and import reforms.
ArcelorMittal South Africa (ArcelorMittal SA), the Gauteng-based steelmaker linked to businesswoman Noluthando Gosa, has escalated its legal battle with Transnet, accusing the state-owned logistics giant of anti-competitive conduct that threatens its survival.
The company has lodged a complaint with the Competition Tribunal, alleging that Transnet Freight Rail (TFR) has exploited its monopoly over bulk rail services. According to the filing, TFR has persistently missed delivery targets while sharply raising tariffs, undermining ArcelorMittal SA’s operations. Although the Competition Commission earlier dismissed the complaint, the company has opted for a self-referral to trigger a full tribunal hearing.
Delivery failures and soaring costs
Transnet confirmed it will oppose the self-referral and has already submitted papers to the tribunal. ArcelorMittal SA argues that TFR’s failures are jeopardizing its survival. Its 2024 annual report shows TFR missed over 40 percent of delivery targets last year, disrupting iron ore shipments essential to production. Over the same period, rail tariffs rose faster than inflation for three consecutive years, compounding losses.
These logistics setbacks, coupled with Eskom’s unreliable power supply and escalating transport costs, have further weakened the company’s competitiveness. ArcelorMittal SA said the rail inefficiencies forced it to scale back production, delay customer deliveries, and absorb hundreds of millions of rand in unplanned expenses.
Mounting losses and plant closures
The crisis has already triggered significant retrenchments. In 2024, the company shuttered its Newcastle and Vereeniging plants after failing to secure rescue agreements with government stakeholders.
The long steel division posted an operating loss of R1.1 billion ($58.9 million), nearly double the prior year’s R600 million ($32.1 million). The group’s headline loss widened to R5.1 billion ($273 million), reflecting the depth of its financial strain.
Weak domestic demand, rising imports from China, and failing infrastructure have further compressed margins. ArcelorMittal SA warned that without urgent reforms—from logistics improvements to safeguards against imported steel—it may be forced to liquidate the rest of its long steel operations, putting thousands of jobs at risk.
Industry impact and uncertain future
Despite support from major shareholders, including Gosa, who holds a 6.15 percent stake and serves as a non-executive director, the company faces an uphill battle. Domestic steel consumption has dropped nearly 30 percent since 2000, while imports now supply a third of the market. TFR’s operational challenges have also disrupted mining exports and delayed manufacturing inputs across sectors.
ArcelorMittal SA’s case underscores broader strains in South Africa’s manufacturing sector, where failing infrastructure and rising costs are eroding competitiveness. The tribunal’s decision could set a precedent for regulating state-owned monopolies, and determine whether Africa’s largest steelmaker can survive in an increasingly hostile environment.
