AMSA’s Longs Business to shut down by Sept. 2025, threatening 100,000 jobs

Key topics: AMSA confirms September 2025 closure of Longs Business operations.3,500 jobs at risk; 100,000 more indirectly affected.High costs, weak demand, and imports cripple competitiveness.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Kerry Lanaghan.ArcelorMittal South Africa (AMSA), the country’s largest steel producer, is preparing to shutter its Longs Business by the end of September 2025. This decision underscores the systemic challenges plaguing South Africa’s industrial base and the global steel market.According to a report by Daily Investor, the wind-down, affecting roughly 3,500 direct jobs and an estimated 100,000 indirectly, is the culmination of years of economic strain, policy missteps, and structural inefficiencies. Despite intermittent signs of hope, including a R1.68 billion bailout from the Industrial Development Corporation (IDC) earlier this year, AMSA confirmed in July 2025 that insufficient progress had been made to salvage the operation. The company stated plainly that without further government support or swift policy reform, it cannot continue absorbing the financial risk of its underperforming long steel segment.Structural impediments and mounting lossesAMSA first announced its intention to wind down the Longs Business in late 2023, citing rising energy and logistics costs, weak demand, and an onslaught of low-cost steel imports, particularly from China. The Newcastle and Vereeniging plants and subsidiary AMRAS faced acute strain, especially as policy decisions like the Price Preference System and the Export Scrap Tax skewed market dynamics in favour of scrap-based steelmakers.Efforts to avert the shutdown included extensive negotiations with the Department of Trade, Industry and Competition (DTIC) and a sectoral engagement hosted by SEIFSA in late 2024. But AMSA CEO Kobus Verster, who in July 2024 publicly affirmed a commitment to saving the Longs Business, conceded in January 2025 that a wind-down was unavoidable. At that point, steel production was scheduled to cease by late January, with operations transitioning into care and maintenance.The situation briefly shifted in March when the IDC’s funding injection delayed closure by six months. However, by July, AMSA acknowledged that little had changed. Imports continued to flood the local market, Transnet’s rail performance declined to record lows, and operating costs remained prohibitive.Financial falloutThe financial ramifications for AMSA have been stark. For the year ending December 2024, the company expects to post significant losses, with earnings per share (EPS) forecasted to drop to between R5.48 and R6.21, from a previous loss of R3.52 in 2023. Headline earnings per share (HEPS) are also projected to deteriorate substantially.These losses reflect not just market weakness, but also the financial burden of the wind-down process, estimated at R2.7 billion, including asset impairments and severance costs. AMSA’s revenues for 2024 are expected to decline by over 5%, driven by reduced utilisation, weak realised prices, and continued market disruption.To navigate this difficult terrain, AMSA has moved to optimise cash flow, reduce borrowings, and sell off non-core assets. However, given the scale of the challenge, these measures offer only limited relief.Broader economic implicationsBeyond AMSA’s balance sheet, the closure of Longs Business has massive socio-economic implications. The estimated 100,000 jobs that could be indirectly affected reflect the interconnected nature of South Africa’s industrial ecosystem, particularly in regions like KwaZulu-Natal, where Newcastle Works is a major employer.The supply chain disruptions will ripple through the mining, construction, and infrastructure sectors, weakened by declining investment and rising costs. Once a pillar of South African industrialisation, the steel industry is now on the verge of collapse without urgent intervention.Focus shifts to flats and future sustainabilityDespite the bleak outlook for its Longs Business, AMSA is not exiting the steel industry. Instead, it will refocus on its more viable Flats Business, which serves automotive, renewable energy, and infrastructure sectors.CEO Verster has indicated that this pivot is part of a broader strategy to sustain operations and support South Africa’s reindustrialisation goals. The company plans to invest in innovation and decarbonisation while streamlining operations and pursuing strategic partnerships.AMSA’s leadership believes this approach could restore competitiveness and profitability, even as the global steel industry contends with overcapacity, decarbonisation pressures, and the rise of protectionist trade policies.A defining momentThe impending closure of AMSA’s Longs Business marks a watershed for South Africa’s manufacturing sector. While the company has made every effort to maintain operations - including securing temporary government support - the lack of structural reform, logistical deterioration, and policy uncertainty have ultimately sealed the business’s fate.As AMSA looks to the future, the stakes remain high for the company and South Africa’s broader industrial economy. If bold, coordinated action is not taken soon, the Longs Business may not be the last casualty in a sector struggling to stay afloat.

AMSA’s Longs Business to shut down by Sept. 2025, threatening 100,000 jobs

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