Steel group ArcelorMittal South Africa (AMSA) has confirmed that it will proceed with the wind down of its longs business after talks with government failed to yield the “timely solutions required” to prevent the closure.

AMSA announced the decision to close the plant on January 6 and indicated that the wind down would be implemented by the end of January.

In February, however, the JSE-listed group postponed the wind down by a month to allow talks with government on possible ways to prevent the closure to progress, as well as to ensure ongoing supply to downstream customers that have no immediate alternatives.

The delay has been facilitated by a R380-million loan from the State-owned Industrial Development Corporation, which is a shareholder in the group.

In a statement issued on February 28, AMSA confirmed that extensive engagements had been held with government and certain stakeholders to find solutions to avoid the wind down, including the closure of the Newcastle Works, in KwaZulu-Natal.

AMSA had requested support to offset surging energy and logistics costs and had also sought additional protection.

In addition, the group wanted the Department of Trade, Industry and Competition to change its scrap metal policy, which AMSA argued had given its mini-mill competitors an unfair advantage over the Newcastle Works, which is an integrated producer that manufactures steel using iron-ore and coking coal as inputs.

“The scrap export tax has not been removed and the Preferential Pricing System, allowing steel producers using electric arc furnaces a substantial unfair advantage remains in place,” AMSA said in a statement.

It added that the other “structural elements” undermining the viability of the longs business also remained “unaddressed” and had worsened during the period since 2024 when extensive discussions were first initiated with government.

“Regrettably the parties have not been able to find timely solutions required to defer the wind down of the longs business,” the statement added.

“It is envisaged that the shutdown of the blast furnaces will commence in the first week of March, with the last steel produced in late-March or early-April 2025.

“The final wind down into care and maintenance will be fully implemented in Q2 2025.”

The group had indicated previously that the closure would affect 3 500 direct and indirect jobs across the Newcastle Works, Highveld Steel, in Mpumalanga, and Vereeniging, in Gauteng.