JOHANNESBURG - South Africa’s largest steel producer, ArcelorMittal South Africa is pulling the plug on its long steel business and with it, 4000 workers will be retrenched.
The company says talks with government have failed to resolve long-standing structural problems including rising imports, limited tariff protection, high electricity costs and the worsening performance of the rail system
Willie Venter from the trade union Solidarity, confirmed that the staggered notifications to employees started on Monday.
“In that notification to employees they indicated that they want to start the process today. Later in the day we received the Section 189 notices that also indicated that they wanted to broaden the retrenchments to another 500 positions mainly at the Vanderbjilpark plant," explained Venter.
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The impact of the closure will be felt most at the towns of Newcastle, Vereeniging and Vanderbjilpark.
Solidarity says the vast majority of workers have at least four people who depend on them.
“We’re looking at roughly 16 to 20 thousand dependents in the direct families, but it’s a lot wider than that because there’s subcontractors that also do work at the long steel products department in Newcastle and in the Vaal region. This may actually reach close to 60 000 to 80 000 people," added Venter.
“In the long time it may have a wider reach because ArcelorMittal produces specialised steel used for component manufacturing of vehicles. This component manufacturers may also be forced to close," Venter said.
READ: Arcelormittal | Steel plant closure threatens thousands of jobs
The Emfuleni Local Municipality, where the additional jobs will be lost, said the situation was beyond their control.
“Really there’s obviously little that we can do, because we were hoping that national government will be able to help through the Independent Development Corporation."
“I think it had done so in the past few months, but it’s clear that maybe whatever they were offering was not enough. So, it’s a very sad state because already here in our municipality we have more than 52 percent unemployment. These extra jobs that are being lost is a very depressing situation,” said Makhosonke Sangwenu, the Emfuleni Local Municipality spokesperson.
In a statement, ArcelorMittal said efforts to secure funding to operate beyond the 30th of September have failed.