3 500 jobs saved with ArcelorMittal SA cash injection

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The off-again, on-again plight of ArcelorMittal SA has taken a fresh turn for the better. Last month, we reported that its long-steel business that’s key to the South African car industry would start to wind-down in April 2025. Nevertheless, the good news this week is that ArcelorMittal SA will be able to delay closure for at least six months, thanks to a R1.7-billion cash injection from the state-owned Industrial Development Corporation (IDC) of South Africa. Better still, by delaying the closure to at least 31 August 2025, South Africa has saved roughly 3 500 jobs in a tough economy, reports BusinessTech.

ARCELORMITTAL SA SAVED FOR NOW

The embattled steel producer sited high energy costs, logistics constraints and an export-tax issue as reasons for its potential closure. The timing of this news is encouraging, following news of 30% Trump tariff increases on SA imports and on-going GNU battles over VAT hikes.

The IDC facility is repayable by agreement between the parties, which is based on the financial performance, solvency and liquidity. In turn, ArcelorMittal SA has also made certain undertakings regarding the continued operation and retention of jobs for the deferral period. However, other areas outside the business may be subject to operational restructuring.

BUYING MORE TIME

ArcelorMittal SA still needs preferential treatment to keep its doors open beyond August 2025. Image: File

Furthermore, the company has also received a Temporary Employee Relief Scheme (TERS) grant to assist with funding employee salaries. Funds for TERS come from the UIF and the funding will also help reduce the drawdown required against the IDC Facility. Better still, the group says government will use the deferral period to address some of the structural problems identified by the company.

Earlier in the year, ArcelorMittal SA, said engagement with government had not found solution on the following challenges:

Scrap export tax remains in place and unfairly disadvantages ArcelorMittal SA.
No progress has been made on improving port and rail efficiencies. Transnet has declined to renegotiate improved tariffs.
Applications for a negotiated pricing agreement with Eskom were not supported and no progress has been made.