Trade, industry & competition minister Parks Tau said negotiations with troubled steelmaker ArcelorMittal SA (Amsa) continued and it was hoped that a deal to save the business could be hammered out this week.
“We are hoping, if possible, that this week we can reach an agreement. We are working very hard, but I can’t guarantee that agreement. We are still negotiating,” Tau said in his address to the national bargaining conference of the National Union of Metalworkers of SA (Numsa) in Joburg on Monday.
In January, Amsa announced its decision to close its long steel operations in Newcastle and Vereeniging, affecting at least 3,500 jobs.
This prompted the government to set up an intergovernmental task team including the trade department and the department of employment & labour to try averting the closure.
The urgency of the situation was underlined last week when the government stepped in to prevent the closure of the plants. The bailout, supported by the Industrial Development Corporation (IDC), involves the government taking over salary payments for a year and the IDC injecting cash into the business.
At Numsa’s three-day conference in Sandton on Monday, Tau said his department had been engaged in “intense discussions” with Amsa.
“Our considered views [are that we need to come up with] short-term measures to avert the closure and give ourselves breathing space to find lasting solutions to issues highlighted,” the minister said.
“Amsa indicated they are not stopping their processes [to close down the long steel operations] until an agreement has been reached. We are pursuing this agreement with the urgency that it deserves, but we can’t instruct them to stop their process.”
Tau said Amsa holds a “strategic position” in SA’s industrial value chains, “hence it’s important for us to intervene”.
Tau’s remarks come as Business Leadership SA CEO Busi Mavuso, in her weekly newsletter, warned that the rescue plan, which involves using the Temporary Employer/Employee Relief Scheme (Ters), would be fine only if there was a clear and sustainable endpoint, adding: “There doesn’t appear to be one.”
When contacted for comment on Monday, Amsa spokesperson Tami Didiza referred Business Day to a Sens statement issued on March 19, saying it was the latest update and there was nothing new.
“ArcelorMittal SA is engaging with stakeholders, including government, regarding funding and related matters to enable the deferral of the wind down of the Longs Business, as well as regarding the interventions previously announced.
“Without agreement regarding the funding and related matters, the deferral of the wind down of the Longs Business will not be feasible,” the Sens statement reads.
“Accordingly, the wind down process has not been stopped and is being managed in a manner that accommodates ongoing funding discussions.
“During this time ArcelorMittal SA has received various approaches regarding the strategic alternatives for the company, as well as the Longs Business.
“None of the approaches constitute a firm intention to make an offer in terms of the Companies Act, 2008. The company will continue to explore strategic alternatives where appropriate.”
Numsa president Andrew Chirwa criticised Amsa’s decision to close its steel operations, characterising the decision as “reckless and selfish”.
“They don’t care that over 3,000 workers are set to lose their jobs. It’s because their profit is falling [that] they are now making workers to be victims. We hope a final lasting solution will be found, and that jobs won’t be lost,” Chirwa said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.