By: Itumeleng Mphake - researcher, Corporate Accountability and Transparency Programme, at the Centre for Environmental Rights

The Centre for Environmental Rights (CER) is closely monitoring, with concern, the conclusion of transaction discussions between ArcelorMittal South Africa (AMSA), the Industrial Development Corporation (IDC), and the International ArcelorMittal Group (ArcelorMittal Group) prompted by AMSA’s financial distress and the placement of Vereeniging and Newcastle steel plants under maintenance.

The CER and affected community-based organisations question whether it is the intent of the ArcelorMittal Group to reduce its exposure to risk by reducing its controlling shares in AMSA or to fully divest and exit the company. 

At the core: who will ultimately bear the cost of AMSA’s environmental legacy? A change in ownership must not result in liability for air pollution and other environmental harms being transferred to the public purse through the state-owned IDC. Further, liability for air pollution and environmental related remediation be inherited from one corporate balance sheet to another, without meaningful change for affected communities. 

At the time of publication, the Johannesburg Stock Exchange (JSE) SENS announcements had reported progress only on the implementation of customs duties, trade remedies, and a reduced electricity tariff. However, the CER and affected community stakeholders maintain that current and legacy air pollution and environmental liabilities at Vanderbijlpark, or AMSA’s other steel plants are also material public-interest considerations. Therefore, the full extent of rehabilitation and maintenance risks must be disclosed in these negotiations. 

Although, the details of the transaction negotiations are unknown, the CER and affected community stakeholders insist on explicit contractual protections to ensure that the ArcelorMittal Group does not potentially exit AMSA without contributing to the rehabilitation of current and legacy air pollution and environmental harm at the various steel plants. 

The ArcelorMittal Group, which is based in Luxembourg, is a multinational company that operates through a global network of subsidiaries. One of these subsidiaries has reportedly faced environmental impacts like those associated with AMSA. The integrated steelworks at Zenica, a city in Bosnia-Herzegovina, were acquired by the ArcelorMittal Group. At the time of acquisition, the ArcelorMittal Group made commitments to the government of Bosnia-Herzegovina to sustain between 4000 to 4500 jobs and to invest in environmental protection. 

Bosnia-Herzegovina records the highest deaths from air pollution per capita in Europe, a statistic that is closely tied to the Zenica steel plant according to the 2023 World Air Quality Report by Greenpeace. The Organized Crime and Corruption Reporting Project documented that after initially failing to publicly disclose air pollution related health impacts, even by its own assessments the ArcelorMittal Group confirmed the severe pollution problems at the Zenica steelworks. 

The ArcelorMittal Group announced the sale of its Zenica steelworks subsidiary in 2025 to another corporation citing rising energy and logistics costs – much like some of the challenges faced by AMSA. Notwithstanding its commitment to the government of Bosnia-Herzegovina, the international ArcelorMittal Group ultimately exited Bosnia-Herzegovina after an estimated 21 years of operation without fulfilling much of its employment and environmental obligations in full. 

The ArcelorMittal Group’s exit from its Zenica steelworks subsidiary and the toxic air pollutions affecting the city offers a cautionary example to South Africa for the risks posed by unresolved air pollution and environmental liabilities under the stewardship of the international corporate giant, ArcelorMittal Group. 

The IDC, other state or private institutional shareholders and key role-players must heed these risks in the ongoing transaction negotiations and place explicit conditions on the treatment of environmental rehabilitation liabilities if an agreement is to ensure corporate accountability and environmental related protections in the interests of the public. 

In its annual reports and financial statements, AMSA refers to legacy environmental rehabilitation provisions and investments held in an environmental trust. However, it is unclear whether these disclosures include post-2014 environmental pollution and remediation, or whether they are limited to specific pollution data and the rehabilitation milestones contained in the Environmental Master Plan, that the Supreme Court of Appeal ordered AMSA to release. It is also unclear whether AMSA completed those rehabilitation milestones, allowed them to become outdated, extended them, or abandoned them. 

The CER is currently litigating on behalf of the Vaal Environmental Justice Alliance, as first applicant, concerning AMSA’s air-quality minimum emission standards application. The ArcelorMittal Group has shown little interest in investing in the technology needed to modernise AMSA’s ageing steel plants and support the low-carbon reindustrialisation of South Africa’s steel industry. 

The IDC must question these all these issues in its assessment of risk exposure and public-interest considerations in the transaction negotiations. 

Regarding decades of “strenuous efforts” by local grassroot organisations competing with corporate power to “legitimise” their right to live in a healthy environment, guaranteed in the South African Constitution, it is incumbent upon the IDC, acting as the second largest institutional shareholder at AMSA, its financial lender, a party to the negotiations, and as a development finance institutions to exercise its constitutional mandate to secure meaningful environmentally related health and socio-economic protections for both affected communities and workers during these transaction negotiations. The same influence, albeit indirectly, must also be exercised by the state-owned Public Investment Corporation, as it too is an institutional shareholder at AMSA with a constitutional mandate.