Business
End of an Era: ArcelorMittal South Africa Shuts Long Steel Division
A once-proud cornerstone of South African industry is winding down, leaving jobs, communities and a legacy on the line
For generations, steel from Newcastle and Vereeniging built bridges, reinforced buildings, and fuelled South Africa’s growth. Now, the country’s oldest steel producer, ArcelorMittal South Africa (AMSA), has confirmed it is shutting its long steel division after 78 years of operation.
The announcement, delivered to employees at the end of August, has sent shockwaves through the steel industry. From 1 September 2025, AMSA began issuing section 189 notices to workers, formally starting the retrenchment process. For the 3,500 people employed directly and indirectly, and the many more whose livelihoods depend on the industry, the news feels like a hammer blow.
From Iscor to ArcelorMittal: a giant in decline
The company’s history runs deep. Founded as Iscor in 1928 to drive local industrialisation, it produced its first steel in 1934 and grew rapidly during World War II, supplying heavy plate for ship repairs and armoured vehicles.
In 1947, it commissioned the Vanderbijlpark works, and by the 1970s, the Newcastle plant was producing long steel products. These plants became economic lifelines for their towns. After privatisation in 1989, Iscor was eventually absorbed into the global ArcelorMittal group in the 2000s, cementing its status as part of the world’s largest steelmaker.
But in recent years, the division specialising in long steel, critical for construction and infrastructure, has haemorrhaged billions. AMSA’s leadership admits conditions have become unsustainable, both globally and locally.
Why the shutdown?
CEO Kobus Verster has pointed to a perfect storm of pressures. Global steel prices are at historic lows after two years of crisis. Locally, demand has collapsed to about half of installed capacity. Sales volumes have dropped 11 percent, prices are down 7 percent, and revenue has slumped by 17 percent while costs keep climbing.
On top of this, South African producers are hamstrung by soaring electricity costs, Transnet’s failing rail network, and the rising expense of moving bulk goods by truck. Imported steel, often cheaper, has undercut local supply, while competitors enjoy a 35 percent cost advantage under scrap metal rules.
Earlier this year, the Industrial Development Corporation (IDC) injected R1.7 billion to keep the Newcastle plant afloat until September. That stopgap gave AMSA some breathing space, but efforts to secure long-term funding have now failed.
“This is not a decision anyone wished to make,” Verster told staff, “but a reality that we must responsibly prepare for.”
The human cost
For workers and their families in Newcastle, Vereeniging, and surrounding areas, the closure is devastating. Unions such as NUMSA have called it a looming social and economic catastrophe. Solidarity has been even more blunt, saying government inaction has driven the industry into the ground.
“The closure is the direct result of the government’s inability to create a competitive industrial environment,” said Solidarity deputy general secretary Willie Venter. He warned of a “retrenchment bloodbath” that could spread beyond steel, with ripple effects on industries that rely on AMSA’s products.
Communities built around steel production now face uncertain futures, with thousands of households potentially losing their primary source of income.
A national wake-up call
The closure of AMSA’s long steel division is more than a business decision; it is a symbol of South Africa’s industrial decline. For a company that began as a state-owned champion of economic development, its collapse reflects decades of policy missteps, crumbling infrastructure, and global competition that the country has struggled to match.
As South Africa grapples with high unemployment and low growth, the fate of AMSA is a stark reminder of how urgently industrial revival and energy reform are needed. Without them, more of the country’s oldest businesses may meet the same fate.
Also read: South Africa’s R500 Million Pension Scandal Sparks Outrage as Law Change Looms
Follow Joburg ETC on Facebook, Twitter, TikT
For more News in Johannesburg, visit joburgetc.com
Source: Business Tech
Featured Image: Adobe Stock
