A new steel mill, Chung Fung Metal, near Nigel, South Africa, is set to begin operations soon, producing 600 000 tons of long steel annually. Backed by Chinese investors, the R2.5 billion project has raised concerns amid a struggling steel industry and recent mill shutdowns.
According to various reports Chung Fung Metal has stated that the plant is situated on a 120-hectare site in the Kaydale industrial zone, just off Nigel Springs Road near the Dunnottar Airbase (Dunnottar Extension 8), and that it uses electric-arc furnace (EAF) technology, enabling lower carbon emissions compared with traditional blast furnaces.
Furthermore, the company added that the site was selected for its proximity to existing infrastructure, including rail links to the Durban port corridor, thereby providing strategic access to transport networks and integrating into the local industrial landscape previously dominated by legacy operations.
The investment arrives against a backdrop of persistent challenges for South Africa’s steel sector. Ongoing power shortages, rising input costs, and the influx of cheaper imported steel continue to erode the competitiveness of domestic producers.
Over the past year, ArcelorMittal South Africa (AMSA) – the country’s largest steel manufacturer – has announced several plant closures, retrenchments and production curtailments, citing unsustainable financial pressures. AMSA began preparatory steps to wind down its long-steel operations in Newcastle, KwaZulu-Natal, effective 1 September 2025. This has since been put on hold by a Labour Court ruling on 29 October 2025 ordering worker reinstatements. However, AMSA have applied for leave to appeal.
Nevertheless, the company stated that despite engagements with government and stakeholders it had been unable to secure a viable path forward to sustain operations without incurring significant financial risk.
Despite the challenges faced by AMSA, Chung Fung Metal has projected the Nigel project will create approximately 1 200 direct jobs, with 1 000 positions already filled during phase one and further employment expected as operations expand.
The company reported that over 70% of the current employees are drawn from local townships, including Duduza, Tsakane and KwaThema, in line with its local economic empowerment commitments.
Recent job postings emphasise general-worker roles requiring red-seal qualifications and experience in the metal or civil-construction industries. In August 2025, local community groups petitioned the company to clarify recruitment processes and expand local-hiring quotas; Chung Fung Metal responded by increasing recruitment in line with regulatory and empowerment objectives.
It should be pointed out that in September 2025, the Industrial Development Corporation (IDC) announced a separate partnership – via a Memorandum of Understanding with China’s Hebei Iron & Steel Group (HBIS) and the China-Africa Development Fund – estimated at up to R90 billion, to explore a new green-field steel plant with projected output of up to five million tonnes per year (drawing from ambitions in a 2014 MoU, with the 11 September 2025, agreement emphasising initial feasibility studies for a major iron and steel project).
Although unrelated to the Nigel project, the IDC stated the agreement reflects growing Chinese engagement in South Africa’s metals and processing industries.
