Government resumes talks to acquire ArcelorMittal South Africa

Government renews bid to secure ArcelorMittal South Africa

South Africa’s Industrial Development Corporation (IDC) has resumed talks to acquire ArcelorMittal South Africa (AMSA), marking a fresh effort to secure the country’s critical steel production capabilities after earlier negotiations stalled.

The Luxembourg-based steel giant’s local operations, vital to the automotive and mining sectors, have faced uncertainty following the closure of two steel mills and an iron-ore mine. Vanderbijlpark remains the main operational site, while facilities in Pretoria and Saldanha are currently idle.

IDC steps back into the fray

The IDC, South Africa’s largest development-finance institution, is preparing to submit a non-binding offer to ArcelorMittal, sources familiar with the discussions said. Previous talks collapsed late last year after an informal R8.5 billion proposal was rejected. That proposal would have included the repayment of R7 billion owed to ArcelorMittal’s South African unit by its parent company.

An IDC spokesperson emphasised that the organisation is continuing engagements with AMSA, the ArcelorMittal Group, and the Department of Trade, Industry and Competition to find a sustainable long-term solution for the steelmaker.

“The IDC sees these mills as crucial to the nation’s industrial sector,” the spokesperson said, highlighting the importance of domestic steel production for local industries.

Industrial lifeline for key sectors

Steel produced in South Africa supports a wide range of industries, particularly automotive manufacturing, mining, and construction, all of which rely heavily on consistent and high-quality steel supply. The shutdown of AMSA’s two mills last year sent ripples across these sectors, raising concerns about supply bottlenecks and potential job losses.

The IDC has previously held around 8% of AMSA, providing a loan last year to help stave off mill closures and maintain operations. Now, with operations consolidated at Vanderbijlpark, the government-backed institution hopes that full acquisition could secure the company’s future and safeguard jobs in critical industrial hubs.

A steel legacy shaped by global deals

AMSA, formerly known as Iscor, was acquired by Indian billionaire Lakshmi Mittal in 2003. Three years later, Mittal merged his holdings with Arcelor to form ArcelorMittal, creating the world’s largest steelmaker. Over the decades, the South African operations have been central to the country’s industrial backbone, supplying steel for everything from car panels to mining infrastructure.

As negotiations continue, industry watchers will be watching closely. A successful IDC acquisition could cement government influence in a strategic sector, ensuring local industries remain supplied while protecting thousands of jobs.

For now, AMSA has declined to comment on the renewed talks, leaving the outcome uncertain, but the stakes for South Africa’s industrial future could not be higher.