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West Coast region hard-hit by Saldanha Steel closure

Close to 1 000 jobs to be lost.

The closure of ArcelorMittal South Africa’s Saldanha Steel plant will affect roughly 900 workers – 550 of whom are directly employed by the company, with the remainder sub-contracted.

The move is expected to have serious economic consequences for the region, where ArcelorMittal is one of the largest employers. Shanah Damonse, chairperson of the Weskus Sakekamer (West Coast Business Chamber), said she is concerned about the financial impact not only on affected employees, but the region at large.

“There are a number of local businesses that relied heavily on Saldanha Steel and unfortunately the true extent of the financial impact or damage will only be apparent in a few months,” she said.

Read: ArcelorMittal South Africa to close Saldanha operation

Efforts to save the plant were in vain

Francine Higham, spokesperson for the Provincial Minister of Finance and Economic Opportunities, said the Western Cape government had been working with ArcelorMittal since June on measures to prevent the shutdown of Saldanha Steel. This included assistance in exploring alternative energy sources, in a bid to reduce electricity and freight costs and including the company in the Saldanha Bay Industrial Development Zone.

The Saldanha Bay Municipality also allowed ArcelorMittal relief on water tariffs.

However, ArcelorMittal South Africa CEO Kobus Verster said high electricity costs and water tariffs were not the only factors and that the changing international competitive environment had contributed to a bleak long-term outlook for the steel sector.

“The international steel market downturn in 2019 was steeper and quicker than anticipated.

“Globally, the steel industry is experiencing its 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 ten-year low,” he explained.

He reiterated that Saldanha Steel is largely an export-driven business, that had been impacted by the international market.

“With multiple factors at play, there is no easy solution and in the long-term, we don’t see any of the factors within our control changing.”

Verster said contractual domestic sales orders from Saldanha would be fulfilled by the Vanderbijlpark Works.

A miracle required to resume operations

Verster told media that the plant would retain a core staff in order to prevent vandalism and maintain the plant in a state such that it could resume operation “at some point in time … if some miracle does happen”.

Over the next few months, management will try to determine what type of activity can be driven from the plant to reduce the financial impact of its maintenance. This process is expected to be concluded in the first quarter of 2020.  

Verster noted that the financial drain on the company is a concern, adding that “the bottom line is that we don’t have a two-, three- or five-year timeline to resume activity at the plant”.

Saldanha Steel produced roughly 1 million tons of steel a year, but had been operating at roughly 70% capacity over the last five or six months. Verster said this was the lowest production level since the plant’s doors opened in 1998.

The latest in widescale retrenchments

He confirmed that the retrenchment consultation process for Saldanha Steel staff would kick off on Tuesday morning. “In terms of an allocation process, if we are able to accommodate skills elsewhere in the business, that will be an option.”

ArcelorMittal is already in the process of retrenching 2 000 staff, both direct employees and sub-contracted staff, at a national level.

According to the Commission for Conciliation, Mediation and Arbitration’s 2018/2019 annual report, a total of 529 large-scale retrenchment referrals were received in the past year.

Of the 38 588 employees who were the subjects of the large-scale retrenchment referrals, 21 391 were retrenched, while 15 787 jobs were saved. Of these, the metal sector accounted for 1 741 retrenchments, second only to the mining sector with 3 260 retrenchments.

Tough sector to be in

 

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Our political leadership does not understand that the international marketplace is a highly competitive environment. The international market does not care about the ANC manifesto, cadre deployment, the minimum wage, labour laws, redistribution, Employment Equity or Empowerment. The various factions in the ANC and the tripartite alliance do not create any employment opportunities, but they do destroy hundreds of thousands.

International sanctions bled the apartheid government dry. International free-market competition is bleeding the ANC government dry. Our record-high and rising, unemployment figures are red cards or penalties for uncompetitive behaviour. The ANC is delighted when they score own goals because that is what voters want them to do.

This destruction results from the socialist motto of “From Each According To Their Abilities, To Each According To Their Needs”.

The government creates werkloosheid

yes the anc thought they were creating jobs by dishing out cadre employees in soe’s and the government, meanwhile they were creating a long term salary / pension problem that they never thought of.

Sensei … you could have stopped at: “Our political leadership does not understand …”

Sensei is on the mark. This event is a cameo of similar happening all over SA and spells darkness, doom and negativity. We can bleat all we like about how cool our country is, but the entire fabric is ripped and un-repairable in our lifetimes.

Our children can only look forward to a “good SA life” of nice weather and wildlife and other natural phenomena we are blessed with. They do not stand a chance in the international workplace where they would likely be aiming, for their own goals and solid purpose. The political dispensation and collapse of basic services has robbed them of that. Local education is sadly lacking, with teachers unqualified, trying to teach kids that are needing proper input, not half mast stuff. Lowering the pass mark? We have all seen the problem, don’t delude yourself that it will “get better”.

Prepare to live in a faster polarising environment, where crime and angst gets worse and all hide behind platitudes, fences and cellphones, blaming others and taking no responsibility.

Hello new world in SA

I don’t think Newcastle and the Vaal Triangle will be spared.

This is a disaster.Other sectors like farming in the western cape is also in very bad shape.

Wait till the DA rip up the farms at Phillippi Horicultural Area (PHA) for their greedy developer buddies to pour concrete over and build 30,000 soul-less housing widgets.

What could possibly go wrong, especially since the PHA is on top of a major Cape Town aquifer…

Yes … this development prospect is bizarre in the extreme. The PHA is supplying not only most of the fresh vegetables to the Cape Town markets but also employment in areas where high unemployment is the source of drug and gang warfare.

I have serious concerns about the friends of friends in the Western Cape DA and their ability to actually run the Province.

At the moment the economic hardship creates a problem for the individuals who lose their jobs. It is also a huge problem for the rulings party. At some stage it will become an issue for the financial system. Then it will become the Reserve Bank’s problem. They should act proactively and lower the interest rate by 2 percent to weaken the currency and stimulate our ability to compete.

We are losing the international currency war because our Reserve Bank has to compensate for the Luthuli House disaster.

This means more votes for the EFF – what a tragedy…590 people losing their livelihood means that 2500 people are actually affected and having to live off social grants. So the poor old taxpayer has to clean up this mess AGAIN!

Logical consequence of the decimation of the construction sector, primary user of steel. Said sector decimated due to investors sitting on their cash (def don’t want to be in hard assets when the klepto-cadres are running the show). Everyone goes on about FDI but LDI – local direct investment the real tragedy. That money flowing off shore, hey, I’m not criticising, mine is too!

Sensei, you captured it all in about 128 words structured in a couple simple sentences and paragraphs and still it is too much for the ANC to grasp and understand. It is the best summation of ANC politics ever written.

The “honorable” Patel thinks it is a brilliant idea that they sell the Saldanha Plant and not put it in care and maintenance.

I am sure he thinks that as he is probably the gofer of the more connected corrupt ANC elite (you know what family I am talking about) that stands ready to get their dirty grubby paws on it for just about free. It would not surprise me if this has been an orchestrated campaign by this corrupt government.

Remember the R 1.5 billion fine they got not so long ago?

Something not right here. Hey “honorable” Patel??? How did you become a minister?? Oh now I remember!! You were the guy that were not elected to anything? Roped in to do the dirty work?

He is the product of brainless cadre deployment by the delusional ANC. But in Africa that is important.

A lesson for all involved is encapsulated in the Netflix release: “American Factory”. The Chinese are the only potential source of relief but would local labour and unions come to the party?

I doubt it …

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