According to media reports, the Industrial Development Corporation (IDC) of South Africa is evaluating an offer worth 8.5 billion South African rials ($493.65 million) to acquire control of ArcelorMittal South Africa (AMSA), the country's largest steel producer.
The deal will include the assumption of existing debt obligations and repayment of loans provided by ArcelorMittal to its South African subsidiary. If successful, this acquisition will conclude almost two years of negotiations between IDC, the South African government and ArcelorMittal.
IDC, which holds the largest stake in AMSA after the parent company, seeks to ensure long-term industrial stability by attracting strategic investors or joint venture partners. to modernize operations and ensure the viability of critical steel assets.The catalyst: the plant is under threat of closure
The negotiations were initiated by AMSA's announcement in November 2023 that it planned to close its Newcastle and Vereeniging steel mills, which produce grades needed for South Africa's automotive and mining industries.
These potential closures threatened 3,500 direct jobs and about 100,000 indirect jobs among suppliers and end customers, raising concerns among policy makers and industry stakeholders.
AMSA attributed its decision to high energy costs, unreliable rail services, rising imports at low prices, and domestic scrap pricing policies that favor competitors.
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