As talks intensified earlier this year between primary steel producer ArcelorMittal South Africa (AMSA) and government to mitigate the impacts of AMSA’s wind-down of its longs business, the Select Committee on Economic Development and Trade has urged government to openly and transparently share what has been communicated and decided.

While recent media reports have confirmed the shutdown of long steel production at AMSA’s Newcastle and Vereeniging plants starting this week, government has not been communicating about outcomes from its meetings with AMSA.

The one-time State-owned steel business bought by billionaire Lakshmi Mittal’s company in 2003 expects to begin shutting down its blast furnaces in the first week of March and cease long steel production by early April.

AMSA last week said it will fully idle its long-steel plants in the second quarter, resulting in the loss of about 3 500 direct jobs. An initial plan to close the facilities by the end of January was postponed by a month to fulfill orders.

Chairperson of the committee Sonja Boshoff says in a statement there is deep concern and uncertainty about the 3 500 employees whose jobs are at risk if AMSA closes down its long steel business.

Thousands of livelihoods will be threatened at a time when the country is already grappling with severe economic challenges and unemployment, she adds.

She also expressed concern about the far-reaching consequences on small businesses that depend on the primary steel industry to supply other industries such as mining and automotive.

Disruptions in the steel supply chain will have a notable impact on automotive production, which puts more jobs at risk from this perspective.

“It is unacceptable that those most affected are left in the dark. While we support government’s efforts to engage with AMSA, these discussions are meaningless if they exclude the very people whose livelihoods hang in the balance,” Boshoff says.

She expects the Department of Trade, Industry and Competition (dtic) to provide a full report on the situation during its next appearance before the committee, and, in the meantime, the committee will closely monitor any other developments.

ENGAGEMENT BACKGROUND

In a statement issued on February 28, AMSA confirmed that extensive engagements had been held with government and certain stakeholders to find solutions to avoid the wind-down, including the closure of the Newcastle Works, in KwaZulu-Natal.

AMSA had requested support to offset surging energy and logistics costs and had also sought additional protection.

In addition, the group wanted the dtic to change its scrap metal policy, which AMSA argued had given its mini-mill competitors an unfair advantage over the Newcastle Works, which is an integrated producer that manufactures steel using iron-ore and coking coal as inputs.

“The scrap export tax has not been removed and the Preferential Pricing System, allowing steel producers using electric arc furnaces a substantial unfair advantage, remains in place,” AMSA said.

It added that the other “structural elements” undermining the viability of the longs business also remained “unaddressed” and had worsened during the period since 2024 when extensive discussions were first initiated with government.

“Regrettably the parties have not been able to find timely solutions required to defer the wind-down of the longs business,” the company added.

“It is envisaged that the shutdown of the blast furnaces will start in the first week of March, with the last steel produced in late March or early April.

“The final wind-down into care and maintenance will be fully implemented in the second quarter.”