Following the decision to wind down its Saldanha plant in the Western Cape, it seems that ArcelorMittal South Africa is indeed looking at its Newcastle operations.
The steelmaker is looking at the second phase of its strategic asset footprint review, which will be focusing on Newcastle in order to improve the group’s structural cost position and service offering.
The company explains the benefits of a concentrated operating footprint will be important during this phase of the review.
Employing nearly 2 000 people in Newcastle, the looming threat of job cuts is leaving many with a dark cloud hanging over their heads. Especially with the winding down of the Saldanha operations, where 900 jobs are on the line.
Following the announcement of winding down Saldanha Works, Kobus Verster; the chief executive of ArcelorMittal, emphasises that international steel prices falling at a faster and steeper rate than the raw material prices has resulted in substantial margin erosion.
“The global steel industry is experiencing the most challenging time since the global financial crisis. Locally, the situation is exacerbated by continued weak economic growth, especially in steel and steel-consuming sectors, with apparent steel consumption at a 10-year low,” said Verster in a statement issued by the company.
Solidarity’s Deputy General Secretary for the Metal and Engineering Industry, Willie Venter says the union is aware the company is facing overwhelming challenges in Saldanha.
However, he says following the drastic steps being taken in Saldanha, the union is now worried about the further cuts at Newcastle.
With the fate of the Newcastle operations hanging in the balance, Trade and Industry Minister Ebrahim Patel has urged ArcelorMittal to reconsider its decision. He has cited the government’s efforts to support the steel industry, which includes the introduction of safeguards on imported hot rolled steel.
Patel claims the closure of Saldanha Works, and the subsequent retrenchment of workers will be a harsh blow to industrialisation in South Africa.
He further states if ArcelorMittal cannot find a solution, the company should rather sell the Saldanha plant. This will ensure the country does not lose its industrial capacity and workers and their respective communities are not displaced.
With a bleak future ahead for ArcelorMittal ahead, what are your thoughts on the matter? Do you feel ArcelorMittal should accept government assistance? Or do you feel the company should sell its Saldanha plant to ensure no further jobs are lost? Share your views and opinions with us in the comment section below.