By Gerhard Papenfus, Chief Executive of NEASA
Despite repeated efforts to save it, ArcelorMittal South Africa (AMSA) has once again threatened to shut down its long steel operations in Newcastle and Vanderbijlpark—this time by September 2025. Given the history, this announcement is hardly surprising.
Since June 2024, AMSA has received significant financial support:
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R1 billion in working capital from the IDC,
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A R380 million shareholder loan from the IDC and the dtic,
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A further R1.683 billion IDC facility, and
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R417 million from UIF TERS.
All this funding was in addition to increasingly strict import and safeguard duties. And yet, the company remains on the brink. Clearly, money alone cannot solve this problem.
There is no denying that a capable and cost-effective primary steel producer is valuable to any economy. But South Africa must now ask: when does such a producer become more of a liability than an asset? At what point do the costs of keeping it afloat outweigh the benefits?
In attempting to prop up AMSA, government has imposed harsh protectionist policies that have severely harmed the broader steel industry. AMSA cites weak domestic demand and so-called “cheap imports” as reasons for its decline. What it won’t admit is that its inability to supply affordable steel—while simultaneously blocking imports—has destroyed much of its own customer base.
The very measures meant to protect AMSA have gradually eroded the downstream industry it depends on to survive.
Difficult as it may be, the downstream sector must begin preparing for a future without AMSA. Clinging to a failing enterprise is only accelerating the demise of those who rely on it. The longer this is delayed, the fewer downstream players will remain standing.
The stark truth is this:
AMSA cannot survive without the downstream industry, and the downstream cannot survive with AMSA—at least not under current conditions.
For downstream players to succeed, they need consistent access to high-quality, affordable steel. AMSA has not been able to provide this. Fortunately, alternatives exist. Mini-mills will continue operating and can help fill the gap. The rest can be sourced through imports. The industry can and will survive without AMSA.
Government, entrenched in a socialist mindset and hostile to free-market principles, has taken it upon itself to manage trade without grasping the consequences. But in complex industries with competing interests, only free markets can establish a sustainable equilibrium.
Government’s reliance on the revenue generated by import duties likely clouds its judgment. Yet this short-term gain is coming at the expense of the steel industry’s long-term viability.
NEASA does not make these observations lightly. We recognise the human cost—job losses are painful and devastating. But hard decisions must be made. Prolonging AMSA’s survival through subsidies and protection will ultimately cause greater damage to the broader industry.
It’s time to stop delaying the inevitable—and start enabling a future in which the South African steel sector can truly rebuild and thrive.
