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Business Times reports that according to Department of Trade, Industry & Competition Minister Parks Tau, SA’s steel industry would lose a major slice of the domestic market for long steel products if the government allowed ArcelorMittal SA (Amsa) to close its Newcastle plant.
He said last week that the R1.6bn cash injection for Amsa from the Industrial Development Corporation (IDC) had been approved not just to protect the 3,500 jobs at risk, but also to preserve the industry’s position in the local market. He said keeping the plant operational was crucial for the economy of Newcastle and northern KwaZulu-Natal, and to avoid the downstream repercussions on private sector infrastructure projects. The state-owned IDC, whose cash injection is aimed at providing a breathing space of at least six months for the Newcastle plant, is also considering increasing its stake in Amsa. According to Amsa CEO Kobus Verster, the company will now focus on making the long-steel business profitable. “We should use this time to bring the business to sustainability and profitability. That is our objective during the next six months,” he indicated. Preserving jobs is at the heart of the agreement with the IDC and the Unemployment Insurance Fund, which has approved a TERS (temporary employer/employee relief scheme) grant to fund employee costs. “We will not do mass restructuring or reduction. We will still work on the salary bill that is in terms of the pay scale and things like that. We will continue to work on things like productivity and pay scales. The government realised that it is a lot cheaper to prevent job losses than to fund the unemployed people through the UIF and other social means,” Verster commented
- Read the full original of the report in the above regard by Kgothatso Madisa & Dineo Faku at Business Times (subscriber access only)
Get other news reports at the SA Labour News home page