TRADE unions on Tuesday urged the government to prevent the collapse of Russian-backed Evraz Highveld Steel & Vanadium, SA’s second-largest steel maker.
Highveld issued retrenchment notices to 1,800 staff members, Solidarity and the National Union of Metalworkers of SA (Numsa) said in a joint statement on Tuesday.
This resulted from the Department of Labour’s nonpayment in a previously agreed training layoff scheme, and also the failure of the state-mandated Industrial Development Corporation (IDC) to provide additional funding of R150m.
The funding was critical for the continuation of Highveld as a going concern, and might now result in the complete winding down of the business and the retrenchment of all employees, the unions said.
"This will have devastating implications for not only the local economy, but for the steel industry and SA as a whole. As representatives of the Highveld labour force, Solidarity and Numsa are urging government not to allow this to happen," they said.
Solidarity said it was already issuing food parcels to the families of 300 employees of Highveld and Vanchem Vanadium Products — which is also in business rescue but is not owned by Highveld — after the Department of Labour "paused" a training layoff scheme.
This comes as the steel maker said it had run out of money and had no choice but to stop paying its 1,800 workers. This has added to a slew of job losses in the mining and industrial heartland of Emalahleni (formerly Witbank) and the region.
Samancor Chrome has said it would close smelters and retrench workers in Emalahleni, Middelburg and Steelpoort.
Piers Marsden of Matuson & Associates, one of Highveld’s joint business rescue-practitioners, said the department owed millions of rand to Highveld as back payment after four months of nonpayment of contributions to the scheme.
In November, the company, the government and unions agreed to implement a training layoff scheme as an alternative to retrenchments. "An infinite amount of promises have been signed by Department of Labour, but the cash doesn’t flow," he said. Highveld had "with no legal obligation" funded the training layoff scheme from November to last week and was R38m out pocket. It had stopped operations in the middle of last year.
"All the company needs is R150m in working capital from the IDC," he said. At peak consumption Highveld used R130m of electricity a month and paid R90m in monthly wages and salaries. "So in that context we don’t think R150m is a big ask," Mr Marsden said.
Numsa general secretary Irvin Jim said it was a national crisis.
Government entities ranging from the departments of environmental affairs and labour, to Eskom and the IDC, had "not come to the party", he said.
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