The National Union of Metalworkers of South Africa (Numsa) in a memorandum of understanding (MoU) on Friday that they had been engaged with the Department of Trade, Industry and Competition and other government departments to intervene and stop ArcelorMittal South Africa (AMSA) from closing plants.
This follows AMSA announcing in January they would be winding down their Longs Steel Business. Earlier this month, AMSA announced they would be postponing the winding down for one month to allow for government engagement.
Numsa said that they had been engaging with all government departments within the economic cluster to deal with this challenge which has been raised by AMSA since 2023. “We have immediately called for the government to move swiftly and engage all critical issues that AMSA has raised that have led to it throwing in the towel and closing down the Long Steel business. As AMSA is of the view that it is completely unsustainable to produce and trade in long steel products as it has become completely uncompetitive and economically unviable.”
Numsa added that it is the union’s firm view that the government must do whatever it takes to protect South Africa’s specialty long steel capacity coming from AMSA Newcastle. “It is our view that as a country we cannot afford to lose such capacity, especially against the backdrop that as a country we have been de-industrialising and it is a known fact that once you lose such capacity as a country, it never comes back.”
“It is against such a background that as a union, given the state of the triple crisis of unemployment, deepening poverty, and inequality, we expect government to act in such a way that shows to everyone that manufacturing matters by protecting the primary steel production capacity at AMSA, which is at the epicentre of the upstream and downstream in the steel sector,” added Numsa.
Numsa said that they want to be on record that the failure to arrest this crisis at AMSA will be catastrophic in the manufacturing sector. “It will be a setback to the rest of the South African economy which must be industrialised and transformed from the minerals-energy-finance complex which makes up the South African economy that the democratic government inherited from the past. If this crisis is not resolved, it will destroy jobs in both the upstream and downstream activities, in the engineering sector, in the motor components sector, and destroy backward and forward linkages across various sectors of the economy.”
Numsa added that they are concerned about the impact this would have on the automotive industry. “NUMSA wants to register to the DTIC and all departments that the union is disappointed that despite the efforts made by various stakeholders, the South African Government and AMSA were not able to find a solution to save the Long Steel Business (Longs Business) before this crisis. The automotive sector uses some 70,000 tonnes per annum of specialty long steel products, with AMSA being the only local source.”
Numsa said that the automotive sector requires at least 12 months to certify another supplier due to the safety-critical nature of the steel. “The consequence of the wind down of Long Business from Quarter 1 2025 is as follows: There are no local suppliers of this steel and upgrading the capabilities and technologies of the foundries and mini mills will take a significant amount of time and investments to fill the gap.”
Numsa added that Toyota South Africa has informed us that in assembling their cars, they source not less than 17,000 tonnes of steel from AMSA. “If AMSA finally pulls the trigger of closing these plants, Toyota will shut down its operations in May and it could take more than six months for them to find an alternative supplier that will meet their specifications.”
BUSINESS REPORT