The Steel and Engineering Industries Federation of Southern Africa has weighed in on recent developments at ArcelorMittal SA (Amsa), pointing to the devastating impact on surrounding communities, suppliers, contractors and the broader metals and engineering sector.
Seifsa has repeatedly warned of a socioeconomic catastrophe should ArcelorMittal shutter its plants, says president Elias Monage.
Some of the most alarming estimates over and above the reported 3 500 direct jobs on the line are the medium-term impact of second-round effects in the order of 20 000 to 25 000 jobs – and in the longer term multiples of more than this.
The effect of this latest development will reverberate throughout the economy and the continent, impacting the auto, motor, construction and mining subsector of the economy and all who work in it.
Monage points out that this development presents a major setback to the base of the industrial sector and industrialisation more broadly.
“The tragic reality is that the lofty goals set by the Steel Master Plan (SMP) to charter a roadmap to re-energise the sector, expand production and increase demand across the steel and fabrication industry value chain and introduce an industrialisation programme have failed dismally.
“The SMP was meant to deliver a comprehensive industrial policy framework, where a total, inclusive, industry perspective would be taken and complementarities across the value chain enhanced.
“Sadly, what we are witnessing is the opposite, wherein policy is implemented in a fragmented manner, with a short-term view and with pockets of industry being pitted against one another.”
For South Africa’s economy, ArcelorMittal’s decision means that there will be fewer players in the country producing long-steel products such as fencing material, reinforcing bars, beams, rails and profiles that are used in the construction, mining and manufacturing sectors.
A sectoral engagement between dtic minister Parks Tau, representing the Department of Trade Industry and Competition (dtic) and the Metals and Engineering Sector took place in November last year.
It was the first formal engagement with the minister and sought to provide a platform for the ministry and industry to come together and develop a way forward to arrest the rapid decline in the sector’s performance.
The session made it clear that urgency was critical and that interventions needed to be as radical and ambitious as deemed necessary under the circumstances.
“Seifsa, representing both the up and downstream value chain, calls on government to urgently prioritise a long-term, inclusive strategy for the steel industry. A collaborative approach that considers all stakeholders in securing the future of South Africa’s steel industry and its critical role in economic development.
“The closure of ArcelorMittal longs steel business is a profound policy failure. Nevertheless, steel still has the potential to be the core of the reindustrialisation programme for South Africa. What is now required on an urgent basis in the face of this crisis is leadership – a focused character and decisiveness – that up until now has been missing and without which we will be doomed to the same results, with negative consequences for the long-term sustainability of the metals and engineering sector,” says Monage.
