Bench Marks Foundation and economists yesterday raised concern about the 3 500 jobs on the line at ArcelorMittal South Africa (Amsa) following an announcement that the steelmaker would wind down the Longs Business by the end of January 2025.
Amsa yesterday said that company was at a point where any further delay could affect its sustainability and therefore, a decision cannot be pushed back any further.
Amsa announced that the final number of retrenchments will depend on agreed alternatives and consultation outcomes, but it was envisaged that approximately 3 500 direct and indirect jobs may be affected.
“Steel production is anticipated to cease by late January 2025, with the wind-down,” Amsa said.
David van Wyk, lead researcher at the Bench Marks Foundation, a non-profit, faith-based organisation which has done extensive research on the mining industry, said it was devastating that 3 500 jobs would be lost.
“There is no alternative and these jobs will definitely be lost,” he said.
“I’m disappointed in Amsa as they have created a market for the export of scrap metal instead of steel products and that is why we are finding so much scrap metal being stripped from railway lines and others.”
Van Wyk added that South Africa is a producer of steel and should be producing steel products to be exported and not exporting steel.
“We should be making more steel beams and pipes that should be exported. If you look, there are so many steel producing companies that have closed down and it's unquestionably because of the onset of more scrap metal being exported and stolen,” he said.
“We need the South African government to come down hard and stop the sale of scrap metal. If not, we will continue to have thousands of jobs being lost in the steel industry just like how it's happening in Amsa.”
Efficient Group chief economist, Dawie Roodt, said that the job losses at Amsa are very unfortunate but said it was a long time coming.
“The steel industry in South Africa has been under immense pressure for a number of years. I feel the government also hasn’t done enough to ensure that the logistics sector is functioning efficiently and this is to do with Transnet and years of inefficiencies that have caused the steel industry to suffer,” he said.
Roodt added that it was sad to see thousands of jobs lost but there seems to be no light at the end of the tunnel.
“Due to the challenges faced in the past it's unlikely that we will see the steel industry recovering.”
Waldo Krugell, an economics professor at North-West University, said that Amsa’s closure of its long steel manufacturing was a result of a low international price and domestic cost pressure.
“The job losses are something we can hardly afford.It shows how difficult it is for reindustrialisation efforts to weigh against global market forces. But also that the major reforms that will make manufacturing more competitive are crucial,” Krugell said.
Numsa general secretary, Irvin Jim, said that as the union they will fight these proposed retrenchments because it was their duty to do everything possible to save jobs.
“However, government led by the Department of Trade, Industry and Competition and the entire economic cluster must be involved as it is related to Eskom and Transnet,” Jim said.
“Unless a solution is found to retain the current capacity, allowing these plants to close could be potentially catastrophic and it would spell disaster for manufacturing and industrialisation of our country.”
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