Renewed fears of an steel industry meltdown
VANDERBIJLPARK. - South Africa’s steel industry heartland, includingVanderbijlpark and Vereeniging and thousands of breadwinners and families, are anxiously awaiting a reported Government decision on import tariff protection on cheap Chinese steel before plant closures and thousands of job losses take place.
Craig Kotze – Special correspondent
VANDERBIJLPARK. – South Africa’s steel industry heartland, includingVanderbijlpark and Vereeniging and thousands of breadwinners and families, are anxiously awaiting a reported Government decision on import tariff protection on cheap Chinese steel before plant closures and thousands of job losses take place.
Vanderbijlpark Business Chamber Chairperson Hester Davis and several steel industry insiders yesterday described Government’s lack of policy direction on the steel industry as “extremely damaging” and a positive decision on import tariffs as “long overdue.”
“Government must get its act together and protect our steel industry. Thousands of jobs and the social and economic fabric of steel and steel-dependent communities hangs in the balance,” said Davis.
South Africa’s entire steel industry is in crisis and turmoil due to a flood of cheap Chinese steel imports – but is the only country in the Brics (Brazil, Russia, India, South Africa) economic bloc without import tariff protection on steel.
AMSA, the country’s largest producer, expected to release its quarterly results at the end of July, responded yesterday to widespread media reports that a 10% import tariff protection was expected by month-end by saying “no definitive decision” on any plant closures had been taken yet. AMSA also did not respond to reports that it would accelerate its Black Economic Empowerment (BEE) processes for more black ownership in return for import tariff protection. Also not to weekend statements attributed to AMSA CEO Paul O’Flaherty that “Rome is burning and the industry is losing millions every day…”
AMSA also refused to comment on whether ArcelorMittal’s largest shareholder, Lakshmi Mittal, had met with Government during his visit last month to South Africa. Evraz Highveld, South Africa’s second largest steel producer, is also in crisis and has applied for business rescue. Criticism of an “alarmist” AMSA media approach has also emerged from industry insiders, adding that media manipulation exercises such as over the weekend in a Sunday paper, could not substitute a considered industry-wide reputation and stakeholder management process.
Although O’Flaherty has since his appointment last year announced an engagement process for AMSA with Government, talks are held in secret with no public or media report-back, a lack of transparency seen as a hampering factor in building confidence in the steel industry.
