South Africa’s state-owned Industrial Development Corporation (IDC) is evaluating a R8.5bn ($491m) bid to acquire ArcelorMittal's operations in the country, reported Bloomberg, citing sources familiar with the matter.  

If the bid is successful, it would end almost two years of negotiations with the state-owned company, the government’s trade and industry department, and steelmaker ArcelorMittal. 

This potential acquisition by IDC could bring global steel companies to South Africa, as the corporation plans to seek strategic investors to operate the plants, stated the sources. 

Discussions have been ongoing with various companies regarding investment or joint ventures to manage some facilities. 

In November 2023, ArcelorMittal South Africa (Amsa) announced plans to close two key steel mills, Newcastle and Vereeniging, which are critical to the automotive and mining sectors. 

The facilities employ around 3,500 workers, with an additional 100,000 employed by affiliated suppliers and customers. 

The bid, to be primarily funded by IDC, would involve repaying a loan extended by ArcelorMittal to its South African unit as well as a cash component. 

IDC, a significant shareholder in local steelmaker Amsa, has a six-month agreement with the parent company for due diligence, which is set to expire imminently. 

In addition to the potential closure of long-steel plants, Amsa operates a flat-steel plant in Vanderbijlpark and owns idle facilities in Pretoria and Saldanha, as well as a closed iron-ore mine. 

ArcelorMittal attributes its decision to close steel mills to high power costs, unreliable rail services, low-cost imports and government policies favouring competitors. 

The news agency, citing sources, reported that no final decisions have been made, and a transaction might not be completed. However, one of the sources mentioned that ArcelorMittal is likely to accept an offer of that magnitude.