The Congress of South African Trade Unions (COSATU) is pleased government is assisting ArcelorMittal South Africa (AMSA) keep its longs steel plant in Newcastle operational while a plan to make it sustainable is sought.
In January, AMSA sent shockwaves through the economy when it announced it would be shutting down its plant in Newcastle along with ancillary operations in Vereeniging, as it could no longer sustain the business given the extraordinarily high energy and transport costs. A total 3 500 direct and indirect jobs would be lost as a result, the steel producer said. It soon became clear that more was at stake when role players along the value chain estimated the total jobs at risk at around 100 000.
On Wednesday, the Department of Trade, Industry and Competition (DTIC) said engagements with AMSA were ongoing, and the Industrial Development Corporation (IDC) had provided a further R380 million injection in February, in addition to the R1 billion working capital facility it had extended in June last year.
The Unemployment Insurance Fund’s Temporary Employee/Employer Relief Scheme (TERS) has approved funding to the tune of R417 million to cover salaries for 2 982 workers for the next 12 months. This support is conditional on AMSA participating in the Productivity SA turnaround and recovery programme.
The DTIC clarified that the interventions were not aimed at providing direct financial relief to AMSA but were part of the overall strategy to protect the country’s steel industry and preserve its industrial capacity. It reiterated government’s commitment towards sustaining long steel production and safeguarding jobs.
COSATU supports government efforts to protect this vital industry and safeguard jobs, considering the country’s unemployment rate is stubbornly stuck at 41.6%. The Federation is ready to work with the technical working group comprising the Presidency, the DTIC, the Departments of Employment and Labour, Energy, Transport, IDC, SARS, Eskom, Transnet and Amsa to tackle challenges impacting the steel industry.
Issued by COSATU
Zanele Sabela (COSATU National Spokesperson)
Mobile: 079 287 5788/077 600 6639
Email: zaneles@cosatu.org.za
