The impending closure of ArcelorMittal South Africa’s (AMSA) long steel business has ignited a fierce debate over industrial policy, with a major employers’ group accusing the government of prioritizing the failing steel giant over the broader economy.
The closure, confirmed by the company, will result in the direct loss of approximately 3,500 jobs. However, unions have warned the final figure could exceed 4,000 when accounting for the full impact.
The National Employers’ Association of South Africa (NEASA), which represents 1,800 businesses employing 65,000 workers in the engineering sector, has stated that the government’s efforts to save AMSA have come “at all costs” and have ultimately failed.
In an interview, the chief executive of NEASA elaborated on the devastating ripple effects the job losses will have, particularly for a town like Newcastle, KwaZulu-Natal, where the plant is a major employer. He estimated that for every direct job lost, up to eight more indirect jobs—including contractors, subcontractors, and local businesses that support the workers—are placed in jeopardy.
The executive placed the blame for the collapse on a combination of factors, citing a flawed industrial policy that he claims protected AMSA while crippling the downstream steel manufacturing sector.
He revealed that AMSA received a R1.7 billion bailout from the government just last year, in addition to other financial assistance. Despite this, the company could not secure funding to continue operations beyond September 2025.
“The moment an entity starts being dependent on the state to give it life… constant government assistance” is the only thing that would have kept it operational, the CEO stated. He characterized past government intervention as “propping up a corpse.”
The core of the problem, according to NEASA, is that protective duties and levies on imported steel—intended to shield AMSA from international competition—made raw materials prohibitively expensive for smaller South African manufacturers. This, he argued, made them uncompetitive and led to an estimated loss of 200,000 jobs in the downstream steel industry over recent years.
“Protect [AMSA] with duties, simultaneously you kill the downstream. That’s what happens,” he said.
The executive also pointed to a wider “avalanche” of issues crippling manufacturing, including the high cost and unreliable supply of electricity, inefficiencies at the country’s ports and rail networks, high wage demands, and plummeting business confidence driven by political uncertainty.
He expressed grave concern that the closure is another step toward the de-industrialization of South Africa, where the manufacturing base is replaced by import warehouses. This trend, he warned, exacerbates the country’s severe unemployment crisis, which officially sits near 45%.
“The consequences of de-industrialization is increased unemployment,” he said, questioning how the state can sustain grant payments to millions when the tax base from manufacturing is eroding.
The executive concluded that for manufacturing to be revived, the government must adopt policies that make investing in business less risky and more attractive, stating that current conditions make business owners “reluctant to invest.”
