It’s a devastating moment for South Africa’s manufacturing industry as ArcelorMittal announces the closure of its steel business in the country.

This decision, which comes after several rounds of discussions with the government and Original Equipment Manufacturers (OEMs) in sectors like automotive, means that 3,500 direct jobs will be lost.

The news, reported by The Citizen, underscores the tough times for a key player in South Africa’s industrial landscape.

The Struggles That Led to This Point

Just last month, The South African highlighted how the government’s intervention might have been the only hope for saving ArcelorMittal from its troubles.

Unfortunately, that intervention came too late, and the inevitable closure is now a reality.

Despite efforts to meet a backlog of orders, the company could not recover from the significant challenges it faced, including external factors such as potential U.S. sanctions and the possible end of trade benefits under AGOA.

ArcelorMittal’s Official Statement

ArcelorMittal’s official statement reveals the company’s ongoing engagement with the government failed to yield a viable solution.

Despite multiple discussions, no timely resolutions were found to prevent the closure of the steel business.

The company pointed out several critical issues that contributed to its struggles, including:

The persistent scrap export tax, which put ArcelorMittal at a disadvantage.
Unresolved issues with improving port and rail efficiency, especially with Transnet’s refusal to negotiate better tariffs.
A lack of support for ArcelorMittal’s application for a negotiated pricing agreement with Eskom, and no progress in this area.
The implementation of trade measures as initially planned.

High Costs and No Relief in Sight

One of the major concerns for ArcelorMittal is the rising cost of doing business in South Africa.

With electricity prices from Eskom set to increase by 12.74% in April 2025, the company warned that this would make it even harder to compete.

Moreover, proposed tariff hikes by Transnet would push logistics costs even higher, making it even more difficult for the steel producer to stay competitive, especially when compared to international standards.

Despite repeatedly flagging the adverse impacts of these policies, ArcelorMittal received no formal response from key government bodies like the Department of Trade, Industry and Competition or the National Treasury, further highlighting the inaction from the authorities.

The Final Phase of the Closure

Given the ongoing challenges, ArcelorMittal has made the tough decision to proceed with winding down its operations.

The shutdown process will begin in the first week of March, with the final steel forms expected to be produced by late March or early April.

By Q2 of 2025, the company plans to complete the transition to care and maintenance mode, signaling the end of its steel business in South Africa.

What’s Next for South Africa?

The closure of ArcelorMittal’s steel operations marks a major turning point for the country’s manufacturing sector, and it’s unclear what the future holds for the affected communities and industries.

What do you think of this major development? Share your thoughts with us in the comments below or get in touch via WhatsApp.

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