The Industrial Development Corporation (IDC) says no decision has been made in relation to further support for ArcelorMittal South Africa's (AMSA's) long-steel business, after the State-owned development financier stepped in earlier this year with funding to avert an immediate wind down of the unit.

However, CEO Mmakgoshi Lekhethe stressed during the group's financial results presentation that the R2.6-billion intervention had helped avert a disruption in the supply of specialty steel to downstream users, especially in the automotive sector.

The funding, which included a R1.68-billion interest-free loan, had also created time and space for those firms to make alternative supply arrangements.

In an interview with Engineering News, CFO Isaac Malevu did not discount the IDC's involvement in further attempts to save the business, including the integrated Newcastle mill, in KwaZulu-Natal.

He also confirmed that the IDC had concluded a due diligence of the business, which had demonstrated that the funding required would be of a scale that could not be carried by the IDC alone.

"The due diligence has shown us that we cannot go it alone; it has to be a collective, collaborative effort," Malevu said.

A broader initiative to salvage the business, possibly involving a strategic equity partner, is being led by the Department of Trade, Industry and Competition (dtic).

Resolution would be required soon, however, given AMSA's indication that it would not sustain the longs business beyond the end of September without further support, or a change to the conditions that had made Newcastle unviable.

The company had also indicated that the shutdown of furnaces would need to be initiated well ahead of that date, as various technical steps were required to preserve the integrity of the plant.

The difficult conditions being faced by the IDC's clients in the metals and mining sector emerged as a major theme of its 2025 financial results, which slumped by over 95% to a profit of R329-million from R7.5-billion.

Impairments surged to R3.8-billion from R119-million in the prior year and disbursements to distressed businesses rose to a record R2.2-billion within an overall disbursement envelope of R16.3-billion.

In addition, dividend investments from the IDC's portfolio of listed investments declined by R2.2-billion as companies such as Kumba Iron Ore, Sasol, and AMSA faced difficult trading conditions.

The IDC saw a reduction of 13% in total assets from R154.6-billion in 2023/24 to R134.5-billion in 2024/25, largely owing to a fair value decline across listed and unlisted investments, which amounted to R16.4-billion.

Malevu told Engineering News that there were signs of recovery in some of the subsectors to which it was exposed, but that the outlook for some of its clients had been negatively affected by the imposition of 30% tariffs on South African exports by the US.

It was working with the dtic to finalise support for those companies whose exports could be affected, especially in the agriculture and automotive sectors.

Sluggish GDP growth, together with lower approvals in the year of R13.4-billion (R17.3-billion), also weighed on the outlook.

It was also keeping a close eye on developments at South32's Mozal aluminium smelter in Mozambique, which faced closure should a new electricity deal not be finalised.

However, Malevu did not expect the level of impairments to be repeated, nor did he expect distributions to distressed firms to be as elevated as they were in 2025.

Lekhethe emphasised the IDC's dual mandate of achieving developmental impact while remaining financially sustainable.

"The IDC's role has to remain that of playing a counter-cynical role in times of trouble, but also of finding new industries of the future that are going to support this economy," she said.