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ArcelorMittal South Africa (ArcelorMittal SA), the Gauteng-based steelmaker partly owned by South African businesswoman Noluthando Gosa, has confirmed it will close its long steel division by the end of September, a move that puts about 3,500 direct and indirect jobs on the line.
The closure, flagged in the company’s first-half 2025 results, was reaffirmed in a memo after years of operational strain, weak domestic demand, and mounting competition from scrap-based mini-mills and cheaper Chinese imports. Management said efforts to rescue the long steel unit had failed, leaving the company with no option but to wind down operations by September 2025.
Crisis in South Africa’s steel value chain
Despite months of talks with the Department of Trade, Industry and Competition (DTIC), the state-owned Industrial Development Corporation (IDC), and lenders, the company said no viable alternative remained. The long steel division—producer of fencing materials, rails, rods, and bars essential to construction, automotive, and mining—has now entered the formal closure process with Section 189 notices issued this month.
“Despite sustained engagement, the structural challenges facing our long steel division could not be resolved,” CEO Kobus Verster said in the memo. “This is a deeply regrettable but unavoidable step.” The closure mirrors earlier decisions to shut down the Newcastle and Vereeniging plants, which also resulted in 3,500 job losses. The IDC extended a R1.68 billion ($91.6 million) loan in March 2025 to stabilize the division, but persistent losses and rising costs eroded the lifeline. By August, negotiations collapsed, leaving the business with no way forward.
Mounting losses prompt restructuring
Gosa, who holds a 6.15 percent stake and serves as an independent non-executive director, has been a steady presence in guiding ArcelorMittal South Africa’s board through its restructuring efforts. The company turned down a $1 billion takeover offer from Networth Investments last year, choosing instead to bet on its own turnaround. That decision has since been tested by the ongoing struggles of its long steel division, which has been weighed down by steep electricity costs, unreliable rail transport, and swings in steel prices.
The pressure showed clearly in the first half of fiscal 2025, when it reported a net loss of R932 million ($52 million). Steel sales fell 11 percent to 1.05 million tonnes, while average realized prices slipped 7 percent, driving revenue down 16.5 percent to R17.12 billion ($947.7 million). Losses in the long steel unit alone came to R429 million ($23.7 million), underlining the scale of the challenge the business faces.
