The Industrial Development Corporation (IDC) is considering an R8.5 billion bid for control of ArcelorMittal South Africa (AMSA) — a move that could bring relief to Newcastle following the announcement that the local steelworks will close in September, putting thousands of jobs at risk and sending shock waves throughout the area.

The IDC, South Africa’s top development finance institution, has been in talks with AMSA, government, and financial advisers for almost two years.

If successful, the deal would see the IDC take on AMSA’s debt and seek international partners to manage the plants.

AMSA announced in November 2023 that it planned to shut its long-steel operations in Newcastle and Vereeniging, citing high electricity prices, unreliable rail services, cheap imports, and government policy favouring scrap-metal discounts for competitors.

The closures directly threaten 3,500 jobs, with a further 100,000 livelihoods at suppliers and customers at risk.

While no final decision has been made, sources close to the talks say ArcelorMittal is likely to accept an offer of this size.

The IDC, AMSA’s biggest shareholder, has signed a six-month due diligence pact with the steelmaker, which is set to expire today, Tuesday.

The bid, the IDC would mostly fund, would mainly repay a loan extended by ArcelorMittal to its South African unit and would also include a cash component..

An official media inquiry has been submitted to AMSA regarding the situation. ArcelorMittal South Africa Group Manager, Tami Didiza acknowledged the inquiry stating; “Please note that there are no new developments in this matter to share at this stage. Once there are , we will issue a SENS announcement as required by the JSE.”

The IDC said it remains committed to safeguarding South Africa’s steel sector. Should the takeover succeed, the corporation plans to bring in strategic equity partners to revitalise AMSA’s plants.

AMSA, formerly known as Iscor, has been a cornerstone of South Africa’s steel industry since 1928. Its Newcastle mill has long been a key employer and economic driver in northern KwaZulu-Natal.

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