Many face gloomy Christmas with over 2000 jobs on the line
In a press statement, ArcelorMittal said several interventions had been adopted over the last few years to secure its long-term sustainability, including aggressive cost-cutting activities, increased raw material cost savings, asset footprint modifications, and numerous other productivity initiatives.
Newcastle’s business leaders are franticly trying to avoid the economic fallout with 2280 jobs to be lost following ArcelorMittal’s decision to shut down the blast furnace.
Mittal announced on Tuesday, that it will be embarking on a process to wind down the company’s ‘longs business, subject to a due diligence and consultation process.’
At least 1 400 permanent staff and 880 contractors in Newcastle will be affected, according to Mittal’s Chief Executive Officer, Kobus Verster. This excludes the coke operations which employs 400 people.
Watch as Newcastle Advertiser Journalist, Zianne Leibrandt speaks to Xoli Mngambi of Newzroom Afrika about the AMSA situation (Video by Newzroom Afrika):
The announcement caught the town by surprise with Louw Conradie, chairman of the Newcastle Sakekamer, said Mittal’s announcement came as a ‘big shock’ to the community, especially considering the timing, just ahead of the festive season.
“All of the businesses in Newcastle will be affected by this. It will have a ripple effect on all commercial activity right down to the informal traders.
“I hope something can be done to avoid this and to mitigate the job losses that will occur.”
Johan Pieters, chairman of the Newcastle Growth Coalition, engaged with the management of Mittal and facilitated meetings between the steel giant and government role-players such as KwaZulu-Natal Premier, Nomusa Dube-Ncube and Economic Development MEC, Siboniso Duma, as well as with TIKZN (Trade and Investment KwaZulu-Natal).
“It is important for the Growth Coalition of Newcastle and KZN to see how we can assist to save the ArcelorMittal Newcastle works and indirectly, our town,” Pieters explained.
Verster confirmed that a consultation process with stakeholders is underway but is sceptical that it will yield any results.
“What can they do, realistically?” asked Verster.
Emphasising some of the major issues that contributed to Mittal’s decision, especially concerning the extensive and on-going challenges with government entities such as Eskom and Transnet, Verster added: “I keep an open mind but I think those are complex issues that cannot be fixed in the short term. How do you solve those complex issues?
“It was a difficult decision in a country where there is high unemployment. We are keenly aware what this adds up to,” acknowledged Verster.
He stressed that the company would try to absorb as many people as it could through vacancies available elsewhere and that the plant would be stopped in such a way that Mittal would be able to restart ‘if things change in the future’.
Mittal’s decision not only affects most plants at the Newcastle Works, but also the Vereeniging Works, and ArcelorMittal Rail and Structures (AMRAS).
However, the ‘process’ excludes the coke batteries at Newcastle which will remain operative, producing metallurgical coke for use at the Vanderbijlpark Works and sale of commercial market coke to the ferro-alloy industry.
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