Despite a temporary reprieve, the Newcastle community in KwaZulu-Natal has urged the government to take stronger action to prevent thousands of job losses as ArcelorMittal South Africa (Amsa).
Amsa had planned to shutter its longs division in Newcastle and Vereeniging, Gauteng, at the end of this month, but it announced at its annual results presentation on Thursday that the move has been delayed by a month due to talks on further support from the government, and following a R380 million shareholder loan from the Industrial Development Corporation.
A final announcement on the decision is expected in the second half of February.
The steel giant reported a staggering annual headline loss of R5.1 billion from last year’s R1.89bn loss reflecting the severe pressures facing the South African steel industry in 2024.
The South African steel industry is facing its greatest challenge since the events of the financial crisis of 2008/09, Amsa said.
“In terms of market conditions, steel imports into South Africa reached their highest recorded levels, accounting for 33.6% of the country's Apparent Steel Consumption. This represents a significant challenge for domestic producers, although import volumes showed some decrease in the second half of 2024,” it said.
Johan Pieters, the chairman of the Newcastle Growth Coalition Chapter, said the decision from Amsa to delay the possible winding down of Newcastle is very positive for the business community and the community in general.
“We, as the Newcastle Growth Coalition, are looking forward to the outcome between Amsa and the national government. This is not just for the sake of Newcastle but also more than a hundred thousand jobs upstream and downstream in South Africa,” he said.
The Newcastle Growth Coalition have faith that the outcome of the discussion will be positive, Pieters added.
Matthew Shunmugam from the Newcastle Residents’ Forum (NRF) said that despite the positive news, they are shocked and deeply concerned by ArcelorMittal's decision to shut down its steel-making operations in Newcastle and Vereeniging.
“This decision will result in the loss of approximately 3 500 direct and indirect jobs, devastating families and communities in our region, he said.
Despite reports of a potential R1 billion rescue package from the government, ArcelorMittal has chosen to proceed with the shutdown, citing unsustainable financial conditions.
Shunmugam added that the NRF demands that ArcelorMittal:
– Reconsiders its shutdown decision and explores alternative solutions.
– Engages in meaningful consultations with trade unions, employees, and the community, and
– Provides adequate support and compensation to affected employees and their families.
“We call on the government to intervene urgently and provide support to ArcelorMittal, its employees, and the affected communities.”
Shunmugam said the NRF will continue to monitor the situation closely and work tirelessly to support our community members affected by this decision.
BUSINESS REPORT