Twice a year for the past decade, Vusumzi Nguse has found work by walking down the incredible streets of the town, walking to the untouched gates of the iconic century steel mills of the industrial town.
Now, he’s the father of five terror, he’s been working on three South Africa without work after Arcelor Mittal, the continent’s largest steel producer, announced last month that it would close long steel plants in Vereinging and Newcastle. I’m afraid to join about one person. Arm Amra.
“We all came out to work from there,” Nguse said, pointing to the giant explosion furnace chimney looming over the town’s garbage fields. “My next move is to find anything I can find. I’m just surviving now.”
The fate of these plants was so productive that it was productive during its peak of the 1970s that South Africa’s isolated apartheid government could overcome global sanctions while building the continent’s most advanced economy. It will reverberate beyond the sectors that existed.
Their losses – stagnation, high costs, influx of cheap steel imports from China, and now, after 25% tariffs imposed by US President Donald Trump, their losses have been made foreign investments, the Union government Its economic strategy will be a major blow to the groundwork.
You can also hear about knitting for South Africa’s already declining manufacturing sector.
“We’re excited to introduce a new product to our customers,” said Justin Corbett, CEO of Landyoke, which uses Newcastle Mill steel to manufacture products for export. To India.
“Companies that rely on ArcelorMittal in the mining, rail and automotive sectors will also move offshore or decline completely.”
In addition to the loss of 3,500 employed directly at Mills, the South African Steel Institute said the widespread domino effect could lose up to 100,000 jobs as the closures ripple over other industries. I’ve warned.
Investor sentiment has improved dramatically following last year’s election, as the market-friendly Democratic Alliance party joined the government’s African National Assembly.
But persuading ArcelorMittal or other investors to keep the factory alive is one of the first real tests of whether optimism can be converted into an industrial revival.
ArcelorMittal received a R380 million ($20 million) loan from the government last week, allowing authorities to continue operating the plants until the end of the month, and authorities will look for ways to keep them open.
President Cyril Ramaphosa vows to turn the country into a “huge construction site” and proposes an R94 billion investment plan to revive manufacturing, increasing unemployment rates and 10 years without per capita economic growth That’s all finished.
Plants of Arcelor Mittal in Vereniging, 50km south of Johannesburg, and Newcastle, 300km east, are expected to play an important role in this revival, providing long steels used in sectors such as railroads, construction and mining. South Africa.
Today, Arcelo Mittal South Africa was established in 1928 by the apartheid government as a state-owned steel corporation. Following the post-war reconstruction boom, it became a giant in the 1940s.
By the 1970s, it was heavily protected and promoted by nationalist governments seeking to modernize the economy and boost the white working class in South Africa, during an era when Africans were predominantly poor and rural. It was an exclusive.
Faeeza Ballim, a historian at the University of Johannesburg, was one of the company’s chief engineers, who was almost universally white at the time, and said Vasbyt, Afrikaans, summarised the mood to “bite” or move forward. Ta. Rapid industrial growth was also dependent on black workers.
The company, privatized in 1989, was acquired in a groundbreaking deal in 2004 by the Lakshmi Mittal conglomerate, 10 years after the election of the African National Congress.
However, overall crude steel production has since declined in 2024, falling from 6.4 million tonnes to 4.7 million tonnes over the decade. South Africa’s stock price has fallen 97% since Mittal acquired the company. Last year, he lost R5.8 billion.
Global factors are also becoming more and more prone to global factors. With China’s construction boom ending, cheap Chinese steel is flooding the South African market. Of the 4.1 million tonnes of steel purchased locally last year, a third was imported, mainly from China.
Trump tariffs could get worse if introduced as planned in mid-March. Major steel producers such as China are expected to dump their metal supply to the global market at even lower prices to make up for losses in their US operations. .
ArcelorMittal shares fell another 2% on Tuesday due to news of US steel tariffs. That stock has already fallen by more than a third this year.
The steel sector has also been victims of many of the same problems that have plagued other industries, such as severe rolling blackouts and dysfunctional rail and port systems.
Last year, Arcelor Mittal South African chair Bonang Mohale denounced Long Steel Business’s Travails’ terrible performance on state-owned rail and port operator Transnet.
“The closure of once-prosperous businesses, such as (Mills of Newcastle) and Vereiniging, should serve as a call for civic activists Clarion to call for an infringement, inertia, corruption, misguided, and even an end to an uninformed policy. That’s it,” Mohale said.
In 2023, the company said that the slowdown in TransNet’s performance would cost R1.4 billion as road transport was used to transport steel and were forced to pay higher orders at busy ports .
In recent years, government policies favoring low-quality steel made from scrap metal have masked the larger plants of ArcelorMittal.
Ballim said successive democratic governments struggled to keep major state-owned companies “which allowed them to truly support without that near-survivalist mode of the apartheid government.”
ArcelorMittal’s relationship with the government remains ice after 2016 Competition Watchdog fined the company R1.5 billion ($81 million) for anti-competitive behaviour, reaching a low point .
Kobus Verster, chief executive of ArcelorMittal South Africa, said in a news briefing last week that the company told the government “refusing to incur further losses.”
“We are not keen to invest new money in the hostile and unattractive sector,” he added in an interview with Daily Maverick.
Trade Minister Parks Tau told the Financial Times that the government will be “more aggressive” in protecting the local steel industry. “This is a strategic sector for us,” Tau said. “Investing in energy networks, rail networks, and various pipelines means an increase in fixed capital investment.
However, observers are skeptical that domestic demand is strong enough to revive South Africa’s steel fortunes.
“We can only sell a lot of our products to local markets,” said Charles Dedonham, head of the Institute of Steel in South Africa. “If the railroad infrastructure is falling apart, how can I export the rest of the product to the market?”
Meanwhile, workers are watching to see if the government finds solutions that keep the plants moving. “I’m just praying,” said Lejonorolomokwena, a welder where both my father and grandfather worked in the factory. “There are no other jobs in this town.”
