Steel import and dumping protection: Too late to stop Vaal job losses?

Craig Kotze, Special Correspondent
VEREENIGING. – Government action to protect a severely battered South African steel industry against subsidized Chinese imports seems imminent – but will it be too little, too late to prevent 1 200 job losses in the Vaal and other cuts throughout the industry?
This is the tipping point confronting South Africa’s entire steel industry this week as the country’s largest producer – ArcelorMittal SA – considers not only closing the Vereeniging plant but is also expected to announce further huge financial losses later this week.
AMSA is also publicly auctioning off redundant equipment such as the electrical arc furnace at its Vanderbijlpark Plant in a desperate attempt to generate cash flow. It goes under the hammer on Thursday and could fetch millions depending on demand.
“Government is fully sympathetic and in full support of protection of the steel industry – but applications for import tariff and anti-dumping duties must follow due process through the International Trade Administration Commission (ITAC),” Trade and Industry Minister Rob Davies said through his spokesperson earlier this week. AMSA has already applied for up to 15% import protection on various products.
“The South African steel industry as a whole is critical to government’s industrialization plan and Minister Rob Davies fully supports duties and tariffs on steel imports,” DTI Ministry spokesperson Sidwell Medupe told Vaalweekblad this week. But he refused to commit to a timeline for government protection, again emphasizing “due process through ITAC” for Minister Rob Davies to make a considered decision weighing all relevant factors.
Statements of support – but yet no concrete action – come against the background of crisis for the entire metal industry. AMSA CEO Paul O’Flaherty last week confirmed high-level talks with President Jacob Zuma in recent weeks on protection against subsidised Chinese steel imports.
O’Flaherty, who has won the respect of the steel industry for his unceasing advocacy for protection against steel job losses, last week announced at a media conference in Vanderbijlpark that AMSA would make a decision on closing its Vereeniging Plant at the end of August.
AMSA also earlier warned of further massive financial losses as it prepares to release its quarterly results on Friday July 31. AMSA was still a “going concern” and not in the same desperate position as Evraz Highveld which is in business rescue and is for sale, O’Flaherty said.
“Government should regard the steel industry as strategic,” he said, adding that accelerated transformation was on the cards for AMSA – from increased black ownership to improved social responsibility.
“We are still untransformed and have not been a good corporate citizen and that needs to change,” said O’Flaherty.