South African miner Assmang, a joint venture between African Rainbow Minerals and Assore, has announced that it is considering the closure of the Beeshoek iron ore mine. The move follows ArcelorMittal South Africa’s (AMSA) unexpected withdrawal from a long-term supply contract, raising concerns over job losses and the mine’s financial sustainability. The closure of Beeshoek would not only affect hundreds of employees but also disrupt South Africa’s iron ore supply chain.
Production decline
The Beeshoek mine, once capable of annually producing 6.2 million mt, had already scaled back to 2.2 million mt in recent years. The reduction was largely driven by declining offtake from AMSA, its only significant customer.
The AMSA factor
- In late June 2025, AMSA unexpectedly refused to sign a three-year contract despite earlier commitments.
- Deliveries to AMSA stopped on July 27, 2025, after credit guarantee insurance was suspended due to unpaid invoices.
- Resumption of sales depends on the settlement of overdue payments and reinstatement of insurance cover.
Job loss risks and consultation process
Assmang has begun formal discussions with labor unions. While no final decision has been made, the company emphasized that closure remains a serious possibility unless viable alternatives are found to secure operations.
Reasons behind possible retrenchments
- Single customer dependence - AMSA’s withdrawal leaves Beeshoek without buyers.
- Rising operational costs - diesel and explosives cost spikes make mining unsustainable.
- Aging infrastructure - requires expensive maintenance without long-term contracts.
- Credit insurance suspension - prevents ongoing deliveries.
- Massive impairments - Beeshoek recorded SAR 3.6 billion ($960 million) in asset impairment losses over the past three years.