There has been welcome reaction from Newcastle community and the Association of South African Chambers (ASAC) following ArcelorMittal South Africa announcement on Monday that they would that the decision to wind down ArcelorMittal South Africa’s Long Steel Business (“Longs Business”) will be deferred for an initial period of at least 6 months.
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ArcelorMittal South Africa (Amsa) announcement about deferring he winding down of its Long Steel business has been met with relief and optimism from local stakeholders including the Newcastle Growth Coalition and the Association of South African Chambers (ASAC).
Amsa on Monday announced that the previously communicated wind down of its Long Steel Business will be deferred for an initial period of at least 6 months, up to 31 August 2025, following a R1.7 billion facility provided by the Industrial Development Corporation (IDC).
Johan Pieters, the chairman of the Newcastle Growth Coalition Chapter, on Tuesday said they were hopeful about the future of the company in the local economy.
"We have remained optimistic about Amsa Newcastle for months, believing that Amsa and the national government will secure the 3 500 jobs at risk due to the wind down of the Long Steel Business," Pieters said.
"Since December 2023, the Newcastle Growth Coalition Chapter has been actively involved in the process."
Pieters thanked Minister of Trade, Industry and Competition, Parks Tau, for his leadership during negotiations.
"His efforts, alongside other ministers, have achieved this milestone deal. The Newcastle community and businesses can now focus on the future, aiming to transform Newcastle into a model city," he said.
"The Newcastle Growth Coalition reiterates: Newcastle is open for business. We have resources to support new manufacturing and small businesses. Located between Johannesburg and Durban, our city is central to South Africa's major ports."
Irshaad Peters, a Newcastle resident, welcomed the news of a cash bailout to salvage Amsa.
"I hope that it provides stability and builds the sustainability of the business to support economic activity in the region for many years to come." Peters said.
Amsa said the IDC facility was repayable by agreement between the parties and subject to, inter alia, the financial performance, solvency, and liquidity of Long Steel Business. It said that all the conditions precedent to the IDC facility had been fulfilled.
Amsa CEO, Kobus Verster, said that the IDC's intention was to increase its stake in Amsa.
“The extension of the wind down of Longs Steel Business is through financial support. It's not something that can ruin the country. There is a realisation of what Amsa and the Long Steel Business means for the country and the impact it has on jobs and the economy," Venter said.
ASAC chairperson, Melanie Veness, said that they were encouraged to hear that Amsa and government reached an agreement and that there was an in-principle understanding of the policy issues that need addressing to avert the closure entirely.
Veness said equally relieved were those in the broader steel industry, who warned that the closure of these divisions would negatively impact 100 000 downstream jobs.
"This decision has come as a relief to those 3 500 people in Newcastle and Vereeniging whose jobs were directly affected, their families, and all those whose businesses have rendered services to the Longs divisions over many years," Veness said.
"We are hopeful that the efforts of all parties will result in the sustainable preservation of South Africa’s primary steel industry."
BUSINESS REPORT
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