The impending shutdown of ArcelorMittal South Africa’s (AMSA) long steel production plants has sparked fears of a jobs bloodbath, with over 3,500 direct job losses and a ripple effect that could impact thousands more. The Parliamentary Select Committee on Trade, Industry, and Cooperation has warned that the closures will devastate small businesses and critical sectors like mining, infrastructure, and automotive manufacturing.
The Ripple Effect on Jobs
While 3,500 jobs are directly at risk, the broader impact could be far more severe. Committee chair Sonja Boshoff emphasized that small businesses dependent on the steel industry, as well as sectors like mining and automotive manufacturing, will face significant disruptions.
“The automotive sector, which relies heavily on steel for manufacturing, will also feel the impact. Disruptions in the steel supply chain could affect production lines, putting even more jobs and economic growth at risk,” Boshoff said.
The National Association of Automotive Component and Allied Manufacturers (NAACAM) estimates that the automotive sector employs over 115,000 workers, many of whom could be affected in the longer term if no protective measures are taken.
Government Intervention Falls Short
In January, AMSA announced the wind-down of its Longs Business, citing high energy costs, logistics constraints, and an export scrap tax issue. Despite a R380 million loan from the Industrial Development Corporation (IDC) in February, which provided a temporary reprieve, AMSA confirmed the final shutdown at the end of the month.
Trade and Industry Minister Parks Tau stated that the government’s intervention aims to protect the sector from the negative impacts of the closures, particularly at the Newcastle plant. “The steel industry is critical in the reconstruction and recovery plan for the South African economy,” he said.
However, Boshoff criticized the government’s lack of communication, calling it “deeply concerning.” She stressed that employees and small business owners deserve clarity about their future.
The Timeline for Shutdown
AMSA has outlined a phased shutdown of its Longs Business:
- The blast furnace will shut down in the first week of March.
- The last steel will be produced by late March or early April 2025.
- The final wind-down into care and maintenance will be completed by Q2 2025.
A Call for Transparency and Action
Boshoff urged the government to prioritize transparency and include affected workers and businesses in discussions with AMSA. “These discussions are meaningless if they exclude the very people whose lives and livelihoods hang in the balance,” she said.
The shutdown of ArcelorMittal’s steel plants is a significant blow to South Africa’s economy, threatening thousands of jobs and disrupting key industries. While government intervention has provided temporary relief, the lack of clear communication and long-term solutions leaves workers and businesses in limbo.
As the steel industry plays a pivotal role in South Africa’s economic recovery, urgent action and collaboration are needed to mitigate the impact of the closures and safeguard the livelihoods of those affected.
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