The National Union of Metalworkers of South Africa (NUMSA) has voiced its profound concern over ArcelorMittal South Africa’s (AMSA) decision to wind down its Longs Business operations at Newcastle Works and Vereeniging Works.
AMSA announced on Monday, 6 January 2025, that this decision, while difficult, was necessitated by prolonged challenges, including sluggish economic growth, rising logistics and energy costs, and an influx of low-cost steel imports, particularly from China.
In its official statement, AMSA said, “Despite extensive consultations with Government and stakeholders to find viable solutions to sustain the Longs Business, progress was insufficient to avert the wind-down. The company will now transition the Longs Business into care and maintenance. Steel production is anticipated to cease by late January 2025, with the wind-down of the remaining production processes completed in Q1 2025.”
The wind-down will directly impact operations at Newcastle and Vereeniging Works, as well as AMRAS, AMSA’s rail and structural subsidiary. Although Newcastle’s coke-making operations will continue, they will be scaled back to match reduced demand. AMSA estimates that approximately 3,500 direct and indirect jobs will be affected, with further knock-on effects on roles within the Flat Business and corporate support services.
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Reflecting on AMSA’s decision, NUMSA highlighted that the steel giant had indicated financial difficulties before the close of the previous year. The trade union emphasised in a statement that it ended 2024 by urging the Government to initiate discussions with all social partners in the steel and engineering sector to address AMSA’s challenges.
“In our view, these engagements should include the Auto sector and the components value chain to discuss the details and the claims made by AMSA that they are operating under unbearable uncompetitive conditions. AMSA claims that their competitors are given an unfair competitive edge on discounted scrap metal of about 40%, and they are demanding a discussion on import duties,” the union stated.
Furthermore, NUMSA General Secretary Irvin Jim affirmed the union’s commitment to fighting the proposed retrenchments, stating that it is NUMSA’s duty to protect jobs.
“However, Government, led by the Department of Trade, Industry and Competition (DTIC) and the entire economic cluster, must be involved as it is related to Eskom and Transnet. In our view, there should be no holy cows in this debate; it is about protecting the current capacity for manufacturing, which is crucial to drive the much-needed industrialisation of our country. This is vital not only to safeguard existing jobs but also to create new ones and stimulate economic growth.”
NUMSA further explained that this issue surfaced at the end of 2023 and persisted throughout 2024, with the DTIC and other government entities, including the Presidency, engaging with AMSA regarding its plans to close the plants. According to NUMSA, these negotiations and engagements have failed to yield positive results.
“As NUMSA, we are demanding that the Office of the Presidency provide a public account of what has prevented agreement on AMSA’s demands. We need to understand the broader context so that we can act to protect this capacity. Its collapse will not only devastate the downstream steel industry but also the Auto sector and the components value chain. At this stage, we believe there is insufficient appreciation within government of the dangers posed by AMSA’s closure plans,” the union stressed.
Additionally, NUMSA warned that unless a solution is found to preserve the current capacity, the closure of these plants could have catastrophic consequences for South Africa’s manufacturing and industrial sectors. “This would directly and negatively impact the communities of Sedibeng and Newcastle, where these plants are located,” NUMSA stated.
Given the severe implications of AMSA’s decision, the union declared it has no choice but to fight to defend these plants and the jobs of its members. “We cannot allow even more workers to lose their jobs unnecessarily if something can be done. We all have a responsibility to protect jobs, particularly given our extremely high unemployment rate and the highest levels of inequality in the world. NUMSA will continue to engage AMSA management and the Government constructively to find a viable solution,” the union concluded.
As NUMSA intensifies its efforts to combat the impending job losses and economic challenges, what are your thoughts on the matter? Share your views in the comments section below.
Comments 7
Yes government must intervene urgently as this will affect everyone in the supply chain in a negative impact thousands of people and businesses will loose money
Maybe a meeting should be held between all the interested parties.
Chaming news for all us
It is clear to me that this country is not going to be further industrialized…In my opinion the Unions as a whole are the main culprits because of their continuous and relentless/militant wage demands since 1994 and the demands ALWAYS considerably above Inflation… Second culprit is the Governent bcause of a) tolerating (and condoning) 30 years of continuous inflation which has already mostly eliminated the broader middle class through emigration and b) the opressive labour laws and the Government enforcement of minimum wages…. And last but not least: the whole untenable situation is presided over by a bloated and largely incompetent government which in turn entices large scale corruption
Gerd Kopanki
Gerd, I am with you on this comment 100% right.
Seeing that our government is failing to create employment, the best they can do is to prevent unemployment in this scenario with AMSA we just cannot afford more people being unemployed especially if government has the wherewithal to prevent this.
NUMSA, and other trade unions, must take a hard look at themselves for the role they played in the demise of the company through their strikes and demands for higher wages but did not give higher productivity in exchange