South Africa’s Industrial Development Corp. has reached an initial agreement to take over ArcelorMittal South Africa Ltd. in a transaction valued at roughly R10 billion, ending negotiations that began in November 2023 for the nation’s largest steelmaker.
The state-owned development financier plans to pay approximately R3 billion in cash and absorb about R7 billion of debt accumulated by the steel company, according to people familiar with the private negotiations. Indian billionaire Lakshmi Mittal’s ArcelorMittal group currently owns roughly two-thirds of the local unit, which traces its origins back to the state-owned producer Iscor.
The proposed transaction represents one of the South African government’s biggest industrial interventions in years. Negotiators aim to secure a shareholder vote and finalize the agreement by the end of the year.
State Lender Provides Loans to Prevent Facility Shutdowns
Financial backing from the state lender is not entirely new. The Industrial Development Corp., which already holds shares in the steelmaker, stepped in alongside the trade ministry after the company announced in November 2023 that it intended to wind down its long steel operations. The state lender previously extended a R1 billion loan two years ago, followed by an additional R1.68 billion last year, to keep facilities running.
Despite that financial lifeline, the company could not avoid widespread shutdowns. Operations at the Newcastle works in KwaZulu-Natal ceased in November 2025, placing the facility into care and maintenance. The Saldanha mill on the west coast has remained closed since 2020, and the Pretoria site is likewise idle. Production continues at the flat steel plant in Vanderbijlpark, located south of Johannesburg.
Market Reaction and Financial Pressures at ArcelorMittal South Africa
Investors responded strongly to news of the pending buyout. Shares in ArcelorMittal South Africa surged as much as 21% in Johannesburg trading, marking the biggest gain for the stock in more than a year. Even with that sharp jump, the company commands a market valuation of roughly R1.3 billion—a steep drop from approximately R56 billion in 2007.
The financial strain on the steel producer remains severe. The company reported a headline loss of R1.49 billion for the six months leading up to June, worsening from a R1.01 billion loss during the same period a year earlier. Revenue dropped 30% to R12 billion, while net borrowings sat at approximately R7.9 billion.
Competition Commission Prohibits Job Cuts During Ownership Change
The transition in ownership brings notable structural changes and regulatory conditions. A 10-year black economic empowerment partnership agreement with Likamva Resources, which holds roughly 17% of the company, expires in early December. People familiar with the discussions indicate that the local partner is unlikely to remain part of the restructured ownership framework.
South Africa’s Competition Commission has stipulated that the transaction must not result in job cuts. Before production halted, the long steel division employed approximately 3,500 workers across sites in Newcastle and Vereeniging.
to find a lasting solution to the challenges facing the steelmaker with the objective of protecting South Africa’s vital steel-manufacturing capabilities.
Industrial Development Corp., via Billionaires and Fullview
ArcelorMittal declined to comment on the negotiations.