ArcelorMittal job cuts ‘to exacerbate’ Vaal economic woes
ArcelorMittal South Africa is on the verge of cutting 3,500 jobs in a move the company claims is necessary to ensure its survival.
This week, the steel producer announced a shutdown of its long steel business, putting at risk the placement of around 3,500 employees.
AMSA says slow economic growth and excessive costs for both energy and logistics led to the decision.
The wind-down will impact all long steel plants, including in Vereeniging and Newcastle in northern KZN.
The Golden Triangle Chamber of Commerce said the move would exacerbate the already dire economic conditions in Vereeniging and the Vaal as a whole.
“We have double the unemployment rate of South Africa. It’s already a struggling area, and news like this further exacerbates the already dire situation,” said GTCC President Jaco Verwey.
“Even though the number of job cuts is small, it will largely affect Newcastle. It’s still sad news.”
Verwey believes that the only solution is for the government to tackle the issues in the steel manufacturing industry.
“I don’t know why there is a lack of interference from the government in implementing policies. I know they tried last year but nothing really came out of it. If we want to stop the steel industry from hurting like other industries, government interference is vital – they should step in and put policies in place.”
Verwey cited a lack of energy security as one of the contributing factors in the downfall of an area once known as the country’s industrial hub.
“There is a lack of local governance, and that is a big role, including energy, logistics and water. The influx of big industrial plants like ArcelorMittal in the Vaal Triangle played a vital role in the establishment of Small, Medium, and Micro Enterprises (SMME), which relied on them for supply.
He said that the district is now relying on upcoming projects to potentially create new employment opportunities.
“Vaal Triangle is struggling post- and pre-COVID-19. There are now one or two projects, including the River City Mall, that’s developing that promise some form of employment,” Verwey added.
The steel manufacturer’s retrenchment strategy has since been met with shock from unions.
Metalworkers’ union NUMSA has already vowed to “fight tooth and nail” for its members.
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