Talks that would have seen the R8.5-billion takeover of ArcelorMittal SA, AMSA, by South Africa’s Industrial Development Corp have ended without a deal.

According to reports, the IDC had informally proposed a deal worth about R8.5 billion, covering around R7 billion in loans and interest owed by Amsa.

However, the offer was reportedly not enough to satisfy ArcelorMittal.

In a statement to the Johannesburg Stock Exchange on November 4, Amsa confirmed that ‘engagements to explore alternative solutions continue’ and that further announcements would be made when appropriate.

Both Amsa and the IDC have declined to comment further.

The breakdown in talks has left the Newcastle mill; one of Amsa’s key long-steel plants, closed, with operations at the associated Assmang LTD iron-ore mine also idled.

The closure has dealt a heavy blow to the local economy, which depends on the plant for employment and secondary industries.

Amsa had previously announced plans to shut two of its long-steel mills, citing high costs, weak demand, and logistics challenges. The Vereeniging mill may continue to operate if a suitable proposal is secured.

The IDC, which owns about 8% of Amsa, became involved in late 2023 when the company first signalled its intent to halt operations at key plants.

The development finance institution had extended a loan to help stave off closure while exploring possible rescue options.

In addition to its long-steel operations, Amsa runs a flat-steel plant in Vanderbijlpark, along with idled facilities in Pretoria and Saldanha.

With the Newcastle mill still silent, the question remains whether new investors can revive one of South Africa’s most critical steel producers and safeguard hundreds of local jobs in the process.

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