BY Staff Reporter
Solidarity has welcomed the announcement that ArcelorMittal South Africa (AMSA) has deferred the planned closure of its long steel plants in Newcastle and Vereeniging to later this year.
The union said this was a positive step to avert the immediate threat of job losses for thousands of employees. A total of 3500 jobs are on the line, and according to experts, thousands more will be lost in the manufacturing value chain.
The decision to defer the closures from April to the end of August 2025 follows a government loan of around R1,7 billion.
“Of course, we are most grateful that such an intervention happened, even though it required tremendous pressure from trade unions in particular for these steps to materialise,” Solidarity deputy general secretary for the metal and engineering industry, Willie Venter, said on Tuesday.
“We are very grateful that our members and the employees affected by the planned closure and retrenchments will now have temporary job security.”
Venter warned that the postponement was far from a real solution.
“In the time to come, the government and AMSA will have to engage in serious discussions to see if they cannot address some of the major problems such as those related to electricity supply and transport costs,” he said in a statement.
“We call on both parties to use this period to find sustainable solutions to the structural problems plaguing the industry. Simply using even more taxpayer money is not the answer.”
Challenges crippling the industry include high electricity costs and rail freight rates, the dumping of cheap steel and the ban or restrictions on the export of scrap metal.
Venter said these issues affected the entire steel and engineering industry, and that a “golden mean” between primary metal producers, smaller producers and downstream manufacturers would have to be found.
AMSA, which has been in talks with the government about a relief package, announced at the end of February that it would cease long steel production by April after failing to get concessions on its demands.
The company wants lower freight rail and electricity tariffs, the imposition of import duties and the removal of a scrap metal export tax, which it argues gives its competitors – recycling mini-mills – an unfair advantage.
“The deferral of the wind down has accordingly been enabled by a facility provided by the Industrial Development Corporation of South Africa in the amount of 1.683 billion rand,” the steelmaker said in a statement on Monday.
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