Municipal action prompted by ArcelorMittal plant closure
“I was greatly shocked by the news of Saldanha closing. We can’t have the same thing happen here in Newcastle.”
Newcastle Municipality is extending a helping hand to ArcelorMittal, but will it be enough?
“I am seriously concerned,” admitted acting Municipal Manager, Muzi Mayisela, regarding the future of ArcelorMittal’s Newcastle Works, following the closure of the steel giant’s Saldanha Works last week. “I was greatly shocked by the news of Saldanha closing. We can’t have the same thing happen here in Newcastle.”
Roughly 900 permanent and contracted employees’ jobs hang in the balance, fears Mayisela, as ArcelorMittal South Africa (AMSA) commences with the second phase of its ‘strategic asset footprint review’.
“What is even more worrying is that behind each of these employees are the families that person is providing for, so the number of people who will be directly affected will be much more,” he stated. “We simply cannot allow a situation like that to happen. Not only is AMSA the municipality’s biggest client, but the staff there also pay rates in Newcastle and the municipality will be affected if the staff are unable to pay for rates and services.”
In an urgent email addressed to AMSA Newcastle’s General Manager, Jacques Kotze, Mayisela invited the steel giant to engage with the Newcastle Municipality on how local and provincial Government may play a role, in reducing the impact of further cost-cutting measures on the local community.
“I have engaged with the Mayor, the Premier and the MEC for Economic Development and we want to offer ArcelorMittal any assistance possible to try and avoid a similar situation to what happened in Saldanha,” explained Mayisela. “The economy is down and the financial situation is already bad.”
The Newcastle Municipality has provided some financial relief to the company, having responded positively to the objection to the 2019 property valuation submitted by ArcelorMittal. The Revenue Enhancement Department confirmed the value of AMSA’s Newcastle property was reduced, and the company would have seen a considerable decrease the monthly rates payable.
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Cornelius van Leeuwen of Solidarity Union said the atmosphere at the Saldanha plant was permeated with shock and devastation, and he sincerely hoped Newcastle would not suffer the same fate. He admitted to being uncertain about what outcome to expect following the review process.
“The only thing I am certain about is that we need ArcelorMittal in Newcastle. Not only is it the largest employer in the town, it also provides business opportunities for local contractors. We have an idea there will be 820 jobs affected nationwide, but we will have a better idea of what that will mean for Newcastle once the process of winding down the Saldanha plant in completed,” said van Leeuwen.
The entire steel and engineering industry was under pressure, he added, with no large projects such as stadiums or malls in the pipeline in the country.
“In order to sustain the steel industry in South Africa, all stakeholders need to come to the table, including organised labour, government and employers to talk about productivity, to secure government assistance, and to discuss how we can protect the local market.”
Van Leeuwen believes, while the intention to support the steel industry is genuine among government officials, their efforts may be hindered by the lengthy processes involved in obtaining approval for relief measures that businesses require urgently. The second phase of AMSA’s strategic review will be completed in the first quarter of 2020.
“We cannot lose the Newcastle plant as an asset for South Africa,” concluded van Leeuwen.
ArcelorMittal’s management has declined the Newcastle Advertiser’s request for an interview, regarding the future of the company’s Newcastle plant. Response was given by AMSA Communications Manager, Tami Didiza.
“We cannot engage with any other person on any decision likely to have a financial impact on the company without issuing a SENS (Stock Exchange News Service) announcement. Once a decision is taken on the Newcastle footprint review, we will definitely issue a SENS announcement which will, on the same day, be followed with engagements with all our stakeholders including the media. As one of our key stakeholders, we will keep you posted on any developments around Newcastle.”
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