SEIFSA estimated that the ArcelorMittal closure will cause a staggering 293 754 direct and indirect job losses and not only the 3 500 direct losses.
Trade unions Solidarity and the National Union of Metalworkers of South Africa (Numsa) are not happy with ArcelorMittal South Africa (Amsa) closing down its long-steel business and are demanding answers about the way forward for the steel producer as well as talks with all stakeholders to save jobs.
Amsa announced on Monday that it will close down its Longs Business due to sustained challenges, including weak economic growth, high logistics and energy costs and an influx of low-cost steel imports, particularly from China.
The Numsa said in a statement that it noted with great concern the internal memo sent by Amsa management on possible job cuts at the Long Steel Business and other divisions, but that the union has not formally been served with a section 189 notice that deals with the retrenchment of workers.
Numsa says before the end of last year, Amsa indicated that it was going through financial difficulties. “Numsa closed the year calling on government to open up a discussion and dialogue with all social partners in steel and engineering to engage on the issues raised by management about its challenges.
“In our view, these engagements should include the auto sector and the components value chain to discuss the details and claims made by Amsa that they are operating under unbearable uncompetitive conditions. Amsa claims that its competitors are given an unfair competitive edge on discounted scrap metal of about 40%, and it is demanding a discussion on import duties,” Numsa says.
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Numsa will fight ArcelorMittal retrenchments
Irvin Jim, general secretary of Numsa, says as the union, Numsa will fight these proposed retrenchments because it is its duty to do everything possible to save jobs. “However, government, led by the Department of Trade, Industry and Competition (DTIC) and the entire economic cluster must be involved as it is related to Eskom and Transnet.
“In our view, there should be no holy cows in this debate as it is about protecting the current capacity for manufacturing and this is crucial in order to drive the most needed manufacturing and industrialisation of our country, so that we can protect existing jobs, create new jobs that we desperately need and to stimulate economic growth”.
He points out that this problem was identified at the end of 2023, already and the DTIC and the economic cluster of government, including the office of the Presidency, have been engaging with Amsa on its plans to close the plant.
“It means those negotiations and engagements failed to bear fruit. As Numsa, we demand that the Office of the Presidency must give a public account about what they cannot agree on regarding Amsa’s demands.
“We must understand the bigger picture to protect this capacity, which in our view cannot be destroyed, as this collapse will not only destroy the down-stream industry in the steel sector, but it will also destroy the auto sector and the component value chain.”
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Government does not appreciate how dangerous ArcelorMittal closure is
Jim says at this stage, Numsa does not think government appreciates how dangerous it is to allow Amsa to close its plants. “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.
“This would have a direct negative impact on the community in Sedibeng and in Newcastle where these plants are located. That is why Numsa has no choice but to fight back in defence of these plants in order to defend the jobs of our members.
“We cannot allow even more workers to lose their jobs unnecessarily if something can be done. We all have a responsibility to protect jobs, particularly because we have an extremely high unemployment rate and the highest levels of inequality in the world.”
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Solidarity also demands answers about ArcelorMittal closure
Labour union Solidarity says in a statement it will use the upcoming labour consultation on retrenchments at Amsa to demand answers about the way forward for the country’s beleaguered steel producer.
Willie Venter, deputy general secretary for the metals and engineering industry at Solidarity, says there will also be unequivocal questions about the apparent failure of Amsa’s talks with the government about a possible bailout that was conducted during 2024.
He points out that the announcement was not unexpected, as Amsa already made it clear in 2023 that it wants to close down its Long-Steel Business. “Since then, Amsa sparked hopes when it reconsidered the long-term lockdowns and when, at the urging of trade unions, it held talks with the government about possible rescue plans.”
In October 2024, Amsa made a desperate appeal to the government to intervene against Eskom and Transnet’s unnecessarily high tariffs plaguing it and also urged government to intervene regarding the abolition of the export tax on scrap metal. Due to the sensitive nature of the conversations, Amsa handled their contents with great secrecy.
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Why did nothing come from talks with government?
However, Venter says it seems that nothing came from these talks. “We were still hoping for a positive outcome for the talks between Amsa and government, but had to abandon it. It is very bad that the government apparently just shrugging its shoulders and is not intervening to stop such a large-scale retrenchment.
“Of course, this announcement once again comes at a particularly bad time of year. In the case of Amsa, it is always just before Christmas or just after New Year. For the employees, it is simply a brutal way to start the year.”
Solidarity says it will negotiate the best possible outcome for its members in the upcoming retrenchment consultation process regarding severance packages and placements elsewhere in the company.
Venter says the union will also hold Amsa accountable as an employer for the ongoing struggle and demand more details about the failures of the critical government talks following the Amsa cry for help.
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Unions and public must know what went wrong with ArcelorMittal talks
“It would only be fair to give an indication to trade unions and the general public of what went wrong in the talks to enable the workers to better understand their situation. Furthermore, Amsa owes a clear answer to Solidarity and South Africa about the way forward, although there is a wide understanding of the pressure the steel industry is under currently and the lack of demand for products that paralyses their business.”
Furthermore, Solidarity says it understands that long steel production cannot be saved without the active intervention of government, Eskom and Transnet. This is the reason why talks between Amsa and government should have resulted in better solutions.
“We want to know why the talks then failed. This has serious consequences, which also affect our own members, but the consequences go further – even beyond just the Newcastle area, where the impact is indeed very large and jobs extremely scarce.
“It is also bad for the companies that depend on the steel that Amsa produces and for iron ore mines in other parts of the country that supply iron ore to Amsa. It is not just 3 500 employees and their families for whom 2025 starts on this sad note,” Venter says.n
