Indian billionaire Lakshmi Mittal nears $610 million sale of South African steelmaker

Indian billionaire Lakshmi Mittal's ArcelorMittal is close to handing control of its South African steelmaking unit to the country's state-owned Industrial Development Corp. in a deal worth about R10 billion ($609 million), people familiar with the matter said.

The IDC has reached an initial agreement to take over ArcelorMittal South Africa Ltd., the people said, asking not to be identified because the talks are private. The state lender would pay about R3 billion ($183 million) in cash and take on roughly R7 billion ($426 million) of the company's debt. The parties aim to complete the deal by the end of the year, subject to a shareholder vote.

ArcelorMittal South Africa shares rose as much as 21% in Johannesburg on Wednesday, their biggest gain in more than a year. Even after the jump, the company was valued at only about R1.3 billion ($79 million), down from roughly R56 billion in 2007.

The company declined to comment. The IDC said it remains in talks "to find a lasting solution to the challenges facing the steelmaker" and stressed the need to protect "South Africa's vital steel-manufacturing capabilities."

A long rescue

ArcelorMittal, the Luxembourg-based steel group that Mittal chairs, owns about two-thirds of the South African company, which was once the state steelmaker Iscor. Mittal's LNM Holdings took control of it in the early 2000s, before his Mittal Steel combined with Arcelor in 2006 to form the world's largest steelmaker.

The talks with the IDC began after ArcelorMittal South Africa said in November 2023 that it planned to shut its long steel business, which makes grades of steel used by the car, mining and construction industries. The IDC, which already holds shares in the company, stepped in with the trade ministry to try to keep the plants open. It lent the company R1 billion two years ago and a further R1.68 billion last year.

The rescue did not stop the closures. The company has shut two steel mills and an iron ore mine. Production at its Newcastle works in KwaZulu-Natal stopped in November 2025, and the plant is now in care and maintenance. Its Saldanha mill on the west coast has been closed since 2020, and its Pretoria site is also idle. The company still runs its flat steel plant at Vanderbijlpark, south of Johannesburg, which makes steel sheet.

ArcelorMittal South Africa posted a headline loss of R1.49 billion ($91 million) in the six months to June, up from R1.01 billion a year earlier. Revenue fell 30% to R12 billion, and net borrowings stood at about R7.9 billion.

What happens next

The IDC first offered between R2.8 billion and R3 billion in July for 80% of the company, with ArcelorMittal keeping the rest. That plan would see the company delisted from the Johannesburg Stock Exchange, restructured and later relisted. Once the deal closes, the IDC plans a strategic review and could bring in industry partners for individual divisions, the people said.

The talks have been held up by a dispute over black ownership. Likamva Resources, the company's black economic empowerment partner, holds about 17% under a 10-year agreement that ends in early December, and it is unlikely to be part of the new ownership structure, the people said.

South Africa's Competition Commission has said the deal must not lead to job cuts. The long steel business employed about 3,500 people at Newcastle and Vereeniging before production stopped.

Mittal, 76, has run ArcelorMittal for two decades and stepped back from day-to-day management in 2021, when his son Aditya Mittal became chief executive. The family is the group's largest shareholder.