ArcelorMittal takeover could make SA pay twice for its steel

Detailed summary

The proposed IDC takeover of ArcelorMittal South Africa risks adding another loss-making business to the state’s portfolio. Before committing billions of rand in public money, the…

The proposed IDC takeover of ArcelorMittal South Africa risks adding another loss-making business to the state’s portfolio. Before committing billions of rand in public money, the government must explain who will pay the price of another bailout.

Wayne Duvenage is a businessman and entrepreneur turned civil activist. Following former positions as CEO of Avis and President of SA Vehicle Renting and Leasing Association, Duvenage has headed the Organisation Undoing Tax Abuse since its inception in 2012.

President Cyril Ramaphosa wants a commission to oversee and coordinate the restructuring of the businesses the state already owns.

Many are failing or performing well below expectations, despite billions of rand paid in bailouts and promises to introduce equity partners or to improve performance and employ professionals to head them up. Yet while the government continues to work out how to fix those businesses, it is backing talks that could bring another struggling company under state control: ArcelorMittal South Africa (Amsa).

Before the president chairs a commission on how to turn around the companies the state already owns, he should explain why South Africans should take on another one.

Moneyweb recently reported that the Industrial Development Corporation’s (IDC’s) proposed takeover could involve about R3-billion in cash and the assumption of about R7-billion in Amsa debt. The company’s stock exchange disclosures confirm that talks are at an advanced stage, with conditions and approvals still outstanding.

The IDC has already extended financial support to Amsa. In June 2024, it provided a R1-billion working-capital facility and announced a R1.68-billion facility a year later in March 2025, to defer the closure of Amsa’s long-steel operations. How those earlier facilities would be treated in the proposed takeover remains unclear.

The real issue however, is that taking control of Amsa would put more of the state-owned lender’s capital at risk, whereafter it will give the…

Th…

Opening of the article, excerpted from Daily Maverick. To read the rest, open the article on the publisher's site.