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ArcelorMittal South Africa (AMSA) is preparing for a massive round of retrenchments that could affect over 4,000 workers – nearly half of its current workforce. This figure is significantly higher than the previously anticipated 3,500 job cuts linked to the closure of its long steel operations at Newcastle and Vereeniging.
According to the trade union Solidarity, the scale of the job losses has now expanded to include employees at AMSA’s Vanderbijlpark plant in Gauteng, which is the company’s largest operation and a key producer of flat steel products.
Solidarity said AMSA had formally communicated with employees regarding the possibility of “mass retrenchments involving more than 4,000 jobs,” highlighting the worsening financial situation and lack of viable alternatives.
The planned retrenchments come at a time when AMSA, a subsidiary of global steel giant ArcelorMittal, is struggling with a range of economic pressures – including weak local demand, surging electricity costs, poor rail and port logistics, and rising competition from both domestic scrap-based producers and cheap steel imports from China.
Financial Troubles Deepen
AMSA has been operating at a loss since 2023, and its most recent financials show a headline loss of R1 billion for the first half of the current financial year. The company attributed its continued losses to depressed steel prices and lower-than-expected sales volumes.
In response to its deteriorating financial position, AMSA had previously announced plans to shut down its long steel production facilities, citing the unsustainable cost structure. Those closures were initially expected to affect 3,500 employees. However, with the inclusion of the Vanderbijlpark plant in the retrenchment talks, the total number of jobs at risk could now exceed 4,000.
AMSA currently produces approximately 2.4 million metric tonnes of steel per year, which accounts for about 4% of the total output of its parent company, ArcelorMittal. The Vanderbijlpark operation alone plays a crucial role in the company’s flat steel production and is considered a vital asset in the local steel industry.
Government Engagement Falls Short
For months, AMSA has been engaged in discussions with the South African government in an attempt to find solutions that could prevent job losses and keep its plants operational. However, Solidarity has accused government departments of dragging their feet and failing to respond adequately to the crisis.
The company has made several appeals to authorities, including requests to lower scrap metal export duties, which AMSA says are giving local scrap recyclers an unfair pricing advantage. In addition, AMSA has lobbied for import tariffs to protect against low-cost steel flooding the South African market, particularly from China.
The company also sought relief in the form of reduced electricity tariffs and improved freight logistics from state-owned enterprises Eskom and Transnet. But according to sources close to the matter, little progress has been made in these discussions.
In a brief statement, AMSA said it was limited in what it could publicly disclose due to the complexity of the ongoing processes and the company’s recent cautionary announcement to shareholders. The company indicated that discussions were still underway and had not yet concluded.
Bleak Outlook for Steel Workers
The union has warned that the loss of over 4,000 jobs could have devastating consequences for workers and their families, particularly in regions like Newcastle, Vereeniging, and Vanderbijlpark, where the company is a major employer.
Solidarity said it would continue to engage with AMSA and government representatives to explore every possible alternative to mass retrenchments. However, the outlook remains bleak unless urgent interventions are introduced to address the structural challenges facing the local steel industry.
With the steel sector already under severe strain, the looming job losses at AMSA mark a critical moment for one of South Africa’s key industrial employers – and a wake-up call for policymakers.