An ArcelorMittal steel foundry. File picture: Arcelor TERS will provide over R400 million to Mittal steel workers. File picture: AMSA
Image: AMSA
The South African government has pledged nearly R417 million to pay the salaries of nearly 3,000 ArcelorMittal workers as stakeholders scramble to keep its steel mills from shutting down.
The Department of Trade, Industry and Competition says it continues to engage with the steel giant to prevent the planned closure of its steel-making operation in Newcastle.
The employee fund, directed via the Temporary Employee/Employer Relief Scheme (TERS), will help sustain 2,982 employees over the next 12 months.
It comes with the condition that ArcelorMittal South Africa (AMSA) participates in the Productivity SA turnaround and Recovery Programme.
This follows the R380 million in financial assistance provided by the Industrial Development Corporation (IDC) in February 2025 and the R1 billion working capital facility granted by that entity in June 2024.
“These interventions are not designed to provide direct financial relief to AMSA but are part of a broader strategy to protect South Africa’s steel industry and ensure the preservation of its industrial capacity,” the DTIC said in a statement.
“The government remains committed to exploring alternative solutions to sustain long steel production and safeguard jobs.”
The working group comprises the DTIC, IDC, Eskom, Transnet and National Treasury, among other key stakeholders.
AMSA is reportedly seeking a rescue package worth more than R3 billion, according to the Sunday Times, and media reports this week stated that a deal was close to being finalised.
The company announced the closure of its long steel business, including the Newcastle facility, in January 2025, citing a number of challenges to its business. These include competition from low-priced imports, weak economic conditions, high energy and logistics costs, and limited policy interventions from the government.
On the latter note, the steel giant is hoping to have antitrust laws relaxed, which would allow it to merge with smaller steel-producing firms.
The closure of AMSA’s long steel mills will have wide implications for major industries such as mining, construction and vehicle manufacturing, with Volkswagen and Isuzu depending heavily on its locally produced steel.
IOL
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