Table of Contents
Key Points
- South Africa holds crisis talks with ArcelorMittal SA over Newcastle steel mill closure, threatening 3,500 jobs and vital long-steel supply.
- IDC considers increasing stake in loss-making steelmaker to preserve South Africa’s steel manufacturing capacity.
- ArcelorMittal SA faces surging costs, cheap Chinese imports, and 31% share price slump in 2025.
South Africa’s government is holding high-stakes crisis talks with ArcelorMittal South Africa Limited (ArcelorMittal SA), the Gauteng-based steelmaker linked to Noluthando Gosa, over the potential closure of its loss-making Newcastle construction-steel mill.
According to people familiar with the matter, the Department of Trade, Industry and Competition (DTIC) and the state-owned Industrial Development Corp. (IDC) are exploring options to keep the plant operational. The Newcastle facility, based in KwaZulu-Natal, produces long-steel products essential to South Africa’s automotive, mining, and construction industries—grades not currently manufactured by local rivals.
IDC eyes bigger stake in struggling steelmaker
On April 1, ArcelorMittal SA, said the IDC—its second-largest shareholder after its parent—would conduct a due-diligence process to potentially increase its shareholding. A decision on the plant’s fate could emerge within days.
The company has set a September 30 deadline to close the Newcastle mill along with its Vereeniging facility, which also produces long products. ArcelorMittal SA first announced plans to shutter both operations in November 2023, a move that could eliminate 3,500 direct jobs and tens of thousands more in supply chains.
The DTIC confirmed ongoing talks, saying its priority is to preserve South Africa’s long-steel capacity. ArcelorMittal SA reiterated on August 11 that without a viable solution, the closures will proceed.
Industry headwinds intensify losses
ArcelorMittal SA has blamed unfair scrap-metal pricing benefiting local competitors, surging electricity costs, inadequate safeguards against cheap Chinese steel imports, and chronic inefficiencies at Transnet Freight Rail, which missed 40 percent of delivery targets in 2024. These disruptions forced production cuts, deepening operational losses.
The steelmaker’s challenges mirror global trends—weak steel prices, oversupply, and competition from scrap-fed mini-mills. Despite the strategic oversight of Noluthando Gosa, who owns a 6.15 percent stake and serves as a non-executive director, ArcelorMittal SA has struggled to reverse its fortunes.
Shares have tumbled 32 percent in 2025 to R0.91 ($0.05), slashing its market capitalization to R1.06 billion ($60.56 million) from a R116 billion ($6.63 billion) peak in 2008. For the first half of 2025, it reported a net loss of R932 million ($52 million), narrowing from R1.21 billion a year earlier. Steel sales volumes fell 11 percent to 1.05 million tonnes, while average prices dropped 7 percent, driving revenue down 16.5 percent to R17.12 billion ($947.72 million).
