Newcastle steel plant faces shutdown as AMSA rescue plan stalls
The steel giant announced its decision to close its loss-making long steel operations at the end of September.
First announced in November 2023, the closure—initially deferred twice to allow for negotiations—could result in the loss of 3,500 direct jobs.
'In the absence of a sustainable solution, the final wind-down of the longs business remains scheduled for September 30,' AMSA said in a statement.
The decision comes as the company reported a headline loss of R1.01 billion for the six months to June, slightly down from the R1.1 Billion loss in the same period last year. Revenue fell by 17% to R17-billion, with sales volumes down 11% to 1.05-million metric tons due to weak demand in South Africa's key steel-consuming sectors.
Trade and Industry Minister Parks Tau told Parliament on July 4 that the government was in 'freighting mode' to prevent the plant closures.
AMSA says its long steel operations have been crippled by high electricity tariffs, unreliable freight logistics, shrinking domestic demand, and rising competition from both local scrap-based mini-mills and cheap imports from China.
The long steel division supplies essential materials including rail, road and bar products, to the construction, mining, manufacturing, and automotive sectors.
Fears are that the closure is expected to hit the local economy hard, with nearly 3 500 direct jobs at risk.
Local suppliers, subcontractors, transport companies, and service providers are also bracing for knock-on effects, with estimates suggesting that up to 10 000 indirect jobs may be impacted in the broader Northern KZN area.
Small businesses in the hospitality, retail, and accommodation sectors—many of which rely on AMSA employees and industrial activity—are likely to see significant revenue losses.
The Newcastle plant has been a key economic anchor for decades, supplying structural steel to major sectors including construction, mining, manufacturing, and automotive.
Several unions have called for urgent intervention and retraining opportunities, while municipal leaders fear the closure could lead to increased unemployment, migration, and strain on social services.
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