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ArcelorMittal South Africa (ArcelorMittal SA), the Gauteng-based steelmaker partly owned by South African businesswoman Noluthando Gosa, is moving closer to shutting down its long steel division. The pause comes as talks with the state-owned Industrial Development Corporation (IDC) over the division’s value remain unresolved.
Reports indicate that offers of up to R7 billion ($398.6 million) have been made, but ArcelorMittal SA is seeking a higher price. The IDC, which holds an 8.2 percent stake, is the company’s second-largest shareholder after Luxembourg-based ArcelorMittal. With due diligence set to finish on Sept. 30, it remains uncertain whether a deal can be reached in time.
Crisis in South Africa’s steel chain
The long steel division—producer of rails, rods, bars, and fencing critical to construction, automotive, and mining—has already entered a formal closure process. Section 189 notices were issued this month, with about 3,500 direct and indirect jobs at risk.
ArcelorMittal had previously deferred the closure in March when the IDC extended a R1.68 billion ($91.6 million) cash injection, but persistent losses and rising costs quickly eroded the bailout. The company has warned that the wind-down of the long steel business cannot be postponed beyond September 30 without a sustainable solution.
Mounting losses and restructuring pressure
South African business leader Noluthando Gosa, who holds a 6.15 percent stake and serves as an independent non-executive director, has remained a consistent presence on the board during challenging times. She is recognized as one of the country’s prominent business executives.
Last year, ArcelorMittal SA turned down a $1 billion takeover bid from Networth Investments, choosing to focus on internal recovery. That choice has been tested by ongoing difficulties in its long steel division, which continues to struggle with high electricity costs, unreliable rail transport, and fluctuating steel prices.
The impact of these challenges was clear in the first half of fiscal 2025. The company reported a net loss of R932 million ($52 million). Steel sales fell 11 percent to 1.05 million tonnes, while average realized prices dropped 7 percent, causing overall revenue to fall 16.5 percent to R17.12 billion ($947.7 million). Losses in the long steel unit alone reached R429 million ($23.7 million), highlighting the magnitude of the hurdles ArcelorMittal faces.
