Government Eyes Amsa Business Sell-Off to Protect Steel Jobs and Industry Supply Chain

The South African government is stepping up efforts to ensure the future of its embattled steel sector, with Trade and Industry Minister Parks Tau confirming that discussions are underway for the possible sale of ArcelorMittal South Africa’s (Amsa) business units, following a R1.2 billion bailout by the Industrial Development Corporation (IDC).

Speaking to members of Parliament’s portfolio committee on trade and industry, Tau said the government had urged Amsa to test the market for either a full or partial sale of its operations. This comes amid escalating concerns from the automotive industry — particularly through its representative body Naamsa — that the company’s collapse could severely disrupt local supply chains.

“Importing long steel would not be viable for the automotive sector,” Tau said, underlining that while the department cannot legally advertise Amsa as up for sale, it has called on the company to engage with potential buyers.

Preserving Critical Steel Capacity

Amsa is South Africa’s largest steel producer and a key supplier to industries ranging from car manufacturing to infrastructure. The government’s immediate concern lies with preserving production at Amsa’s Newcastle plant, which produces long steel products essential to several industrial clients.

Tau ruled out building new long steel capacity from scratch, noting it would take up to two years — a delay that could cripple automotive and construction sectors.

Investment advisory firm Investec has been appointed to guide the potential divestment of non-core land assets, while discussions around operational restructuring continue behind closed doors. However, no announcements on definitive sales or closures have been made.

Job Losses and the Masterplan

The Steel and Metal Fabrication Masterplan is already being implemented to counter the recent downturn. Between September and December 2024 alone, the sector lost 2,290 jobs. Government efforts to rebuild confidence and capacity include collaboration with international organisations such as the OECD and UNIDO, both of which are backing steel decarbonisation initiatives.

UNIDO’s Mitigation Action Facility has committed €25 million (to be administered by the IDC) over the next five years to support low-carbon steel technologies, such as carbon capture and reuse. A pipeline of steel decarbonisation projects is already in development.

Transmission Boost and Demand Outlook

Tau’s department is also tying the steel recovery effort to South Africa’s growing energy infrastructure needs. The National Transmission Company of South Africa (NTCSA) has signed agreements with 19 local firms, with R32 billion in transmission contracts over the next eight years.

This grid expansion is expected to generate a long-term demand of approximately 452,000 tons of steel — or roughly 3,800 tons a month — much of which could be met by local minimills.

While the future of Amsa remains uncertain, the government’s approach highlights a broader effort to stabilise and grow South Africa’s steel ecosystem, both through immediate interventions and long-term investment in green innovation and infrastructure.

{Source: MSN}

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