The decision places around 3 500 direct and indirect jobs at risk at its Newcastle and Vereeniging operations.

The company has attributed this to the prolonged weak economic conditions, logistics and energy challenges. It is a dull start to the year for workers facing the chop at ArcelorMittal’s long steel division.

It follows months of consultations between the company and government that have ultimately failed to prevent job cuts.

Chief Executive Officer of the South African Chamber of Commerce and Industry Alan Mukoki has described the situation as disappointing.

“Well, you know, we’re obviously very disappointed because I don’t think that any business organisation would like to see a major outfit such as ArcelorMittal, even though it’s just one part of their business, their long steel business, which is actually closing. I mean their coke-making operations at Newcastle will continue. Although they also say that they’re going to be scaling that back, obviously to reflect lower demand in terms of what they have, they have announced. We can’t be happy about that, obviously, because as you know, it affects the economy negatively, jobs are likely going to be affected and I think that the number of around 3 500 people were mentioned. So, that is not necessarily good news because obviously to the fiscal year, losing any taxes that may well be available if they were still in operation,” says Mukoki.

Meanwhile, the Golden Triangle Chamber of Commerce has weighed in on the matter, saying this move points to the story of South Africa’s deindustrialisation. President Jaco Verwey highlights the several challenges facing the sector.

“I think the deindustrialisation is happening in South Africa. We should know that the energy is a big problem. We know Eskom’s problems, but we also see in the last 4-5 months that Eskom is busy recovering by hook. How they do it? We don’t need to know. We don’t need generators anymore, but that impact has the direct impact on any large industry, especially in the area like the Vaal which is known for being the industrial hub of South Africa and then of course the logistics as well because of the non-existing railway system in South Africa is getting more and more expensive. Crude oil is getting more expensive and diesel is getting more expensive,” says Verwey.

--SABC--