South Africa’s largest steelmaker is preparing to cut thousands of jobs. The crisis at ArcelorMittal exposes the structural weaknesses holding back the country’s industrial base.
A national pillar under pressure
ArcelorMittal South Africa has confirmed plans to retrench over 4,000 workers. For a country already battling unemployment at crisis levels, that number is quite staggering. Steel production sustains construction, mining and manufacturing across the economy. When a producer of this scale falters, the knock-on effects are likely to ripple through supply chains and communities.
Power that comes at too high a price
One of the biggest drivers of this significant bump in AMSA's journey is our far-from-perfect energy infrastructure. Years of under-investment, escalating tariffs and load shedding have made South African steel products less competitive. Energy-intensive production on a coal-heavy grid is now a direct liability, especially as export markets tighten carbon rules. Additionally, the EU’s Carbon Border Adjustment Mechanism (CBAM) threatens to add new costs to every ton of steel produced here.
Global competition bites
At the same time, local producers face a flood of cheaper imports, particularly from China. Backed by lower energy costs and stronger state support, Chinese steel arrives at prices South African firms struggle to match. In an industry where margins are thin, that gap becomes the difference between survival and catastrophe.
A system that failed to adapt
ArcelorMittal’s predicament highlights a deeper problem. South Africa has spoken for years about industrial policy, energy reform and infrastructure renewal — yet implementation is still far behind what was promised. While global competitors have retooled around efficiency and clean energy, local producers are still wrestling with unreliable power and regulatory uncertainty.
A strong call to action
Whether ArcelorMittal survives in its current form is uncertain. The bigger risk is that the collapse of a flagship player may signal to investors and trading partners that South Africa cannot sustain heavy industry at scale. Without urgent action to stabilise power supply, modernise the grid and align policy with competitiveness, this will not be the last industrial giant to falter.
The cooling furnaces in Vanderbijlpark must remind us of what is at stake. South Africa cannot afford to lose its industrial core. The way forward lies in stabilising electricity supply, accelerating the shift to cleaner energy and aligning policy with competitiveness. If stakeholders take note and act with urgency, the story of steel need not end in decline — it could still mark the beginning of a new industrial chapter.
