The Congress of South African Trade Unions (COSATU) has issued an urgent plea for a collaborative meeting involving key stakeholders, including the Department of Trade, Industry and Competition, the National Union of Mineworkers (NUM), and ArcelorMittal South Africa, to avert a looming crisis that threatens to displace thousands of workers in Newcastle. The call follows ArcelorMittal’s alarming announcement that it intends to wind down its long steel mill operations this month, a decision that could result in 3,500 direct and indirect job losses.
As sub-Saharan Africa’s largest steel producer, ArcelorMittal South Africa’s potential job cuts are a significant blow not only to its workforce but also to the local economy of Newcastle, which relies heavily on the steel industry. The company’s recent statement highlighted ongoing challenges that have rendered the long steel business unsustainable. These issues include sluggish economic growth, escalating logistics and energy costs, and a surge of low-cost steel imports, particularly from China.
The company noted that the longstanding Price Preference System (PPS) and the Export Scrap Tax have contributed to the unsustainability of its Newcastle operations, disproportionately favouring scrap-based steelmaking processes at the expense of local beneficiation of South African-sourced raw materials.
COSATU’s National spokesperson, Zanele Sabela, has not held back in expressing her discontent with the company’s decision, labelling it as “ill-considered” and expressing concern over the dire implications for both workers and the broader Newcastle economy. “Given the country’s unemployment rate sitting at a staggering 41.9%, we cannot afford to lose another 3,500 jobs, which will only plunge these workers into deeper poverty,” Sabela stated. “The mill closure will not just affect jobs but will negatively impact on Newcastle and its surrounding communities.”
Moreover, Sabela has accused the government of neglecting consistent calls to abandon a neoliberal approach to economic management. She strongly advocates for increased investment in infrastructure, particularly in energy supply from Eskom and the improvement of Transnet and Prasa services to ensure reliability and efficiency.
“ArcelorMittal has pointed out deteriorating market conditions both locally and globally,” Sabela stressed. “It is essential for the government to consider implementing protective measures for industries that support mass employment.”
