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| ArcelorMittal |
The South African government is working to prevent the closure of ArcelorMittal South Africa (AMSA) plants, engaging in discussions on a rescue package to safeguard the steel sector and thousands of jobs. According to Daily Maverick, the Department of Trade, Industry and Competition, along with the Ministry of Finance, are negotiating a bailout plan worth up to R1 billion ($53.6 million).
Government’s Efforts to Save AMSA
Government agencies, including the Public Investment Corporation, the Industrial Development Corporation, and the Unemployment Insurance Fund, may contribute to the funding package. The initiative aims to prevent a major crisis in the steel industry.
Despite these efforts, AMSA reiterated at the end of last week that it has no plans to reverse its decision to shut down operations. The closure is expected to result in direct and indirect job losses affecting 3,500 people and communities in Newcastle, Vereeniging, and surrounding areas. The redundancy process is set to commence on February 6.
AMSA’s Position and Potential Impact
In a letter to unions, Mokele Morabe, AMSA’s employee relations manager, stated that the company has yet to receive any formal commitments from the Department of Trade, Industry and Competition regarding the proposed bailout.
“The ArcelorMittal Group will be open to exploring solutions proposed by the South African government regarding the long products business and the company as a whole,” Morabe said.
In early January 2025, AMSA confirmed it would shut down its long products business due to financial instability. The closure will affect several plants, including Newcastle Works, Vereeniging Works, and Amras, a subsidiary specializing in rail and structural products.
Impact on Infrastructure and Economy
AMSA’s shutdown could significantly impact South Africa’s infrastructure development. The company’s steel products are essential for constructing power poles, rail lines, and roads—key elements of the country’s ambitious infrastructure projects. Additionally, the closure could affect the automotive industry, which relies on AMSA’s output.
As discussions continue, the South African government faces mounting pressure to find a viable solution that balances industrial stability with economic realities.
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