By Lehlohonolo Lehana.
Steel producer ArcelorMittal South Africa (AMSA) has indicated that it may close its long-products business, which could result in the loss of 3 500 direct and contractor jobs at its Newcastle and Vereeniging operations.
In a statement on Wednesday, the JSE-listed company said the potential wind down had been precipitated by structural issues outside of its control, including: Eskom’s power crisis and high Transnet costs, as well as the decline in local infrastructure development.
The company indicated that the implementation plan to scale down and close the plants has not yet been finalised and that numerous consultations with stakeholders are yet to take place.
CEO Kobus Verster said the board and management decision to consider a wind down of the long-products business was reached after “all possible options” were exhausted, had not been “taken lightly” and was being pursued in an effort to place the rest of the business on a “sustainable financial footing”.
The company also acknowledged the potential negative impact on the regional and local economies in which the mills were located, in particular the Newcastle Works, which was a major source of economic activity and jobs in the KwaZulu-Natal town.
The company said the wind-down would exclude the coke batteries at Newcastle, which would remain operative, producing metallurgical coke for use at the Vanderbijlpark Works, and for sale of commercial market coke to the ferro-alloy industry.
A consultation process in accordance with Section 189(3) of the Labour Relations Act will be initiated with unions and “every effort will be made to manage down the number of jobs affected”.
“The conclusion and number of affected posts will be finalised within a detailed wind down implementation plan that is being developed,” the company said.
Trade union Solidarity’s Willie Venter says ArcelorMittal has an attitude of announcing without engaging the union and workers on the retrenchments.
“A consultation process with key parties affected by such a decision, including trade unions, should undoubtedly have preceded such an announcement.
“The last weeks of 2023 could have been used to discuss solutions or alternatives before a final decision was taken about the matter and employees were notified of the decision.”
Venter has lambasted the government for failing to address logistics and energy crisis to save the much needed jobs.
“While we are awaiting the formal section 189(A) notices that precede this type of restructuring, it is also clear how the government’s mismanagement of state enterprises such as Eskom and Transnet, and the government’s inability to promote economic growth, are claiming victims.
“After receipt of the section 189 (A) notice Solidarity will start to meet with members and will support them during all the processes that may follow.”