Mittal charts new direction to avoid job-loss disaster

VANDERBIJLPARK. – ArcelorMittal SA (AMSA) last week announced no further job cuts in the Vaal, apparently staking the future of the company – and the entire steel industry – on loans larger than its total worth and on additional future protection measures by government.
This was announced by CEO Paul O’Flaherty last week, but as he continued his vigorous advocacy to save jobs and gain protection from government – especially strategic and localised designation for the industry – no clear policy guidelines on the steel sector has yet come from government.
O’Flaherty said no job losses would take place at Vanderbijlpark Works as AMSA would need to maintain full production capacity there – the blow was also considerably softened at its Vereeniging Works as 283 of the proposed 450 job cuts would in fact take place at the Melt Shop.
“The sustainability of the Vanderbijlpark Works is heavily dependent on the implementation of import tariffs and other trade remedies requested from government, as well as the designation of primary steel for localisation,” O’Flaherty said in announcing the cancellation of job cuts at the Works.
He said AMSA would seek to raise up to R4,5 billion in a rights issue underwritten by its Luxembourg-based shareholder. He added AMSA was still in talks with government on the long-term viability of the steel industry.
“AMSA’s future hangs in the balance unless government does more than the 10% import duty it has imposed on some steel products,” O’Flaherty warned. Up to between 30-60% anti-dumping duties would need to be implemented to counter a flood of cheap state-subsidised Chinese steel.
O’Flaherty has emerged as the leader of industry attempts to avoid a catastrophic melt-down in the steel and engineering sector but thus far AMSA’s public advocacy has not resulted in strategic sustainability or a clear policy commitment by government.
Government has not yet meaningfully and decisively engaged with the industry to the same extent that it has intervened in mining after the Marikana Massacre in the Platinum Belt, experts believe.
“AMSA is the National Key Point that clearly is not treated as of national importance if one looks at government’s response to the crisis in the steel sector,” said one expert anonymously.
“The key issue now emerging is: What exactly is government policy on the steel industry?” he said.
AMSA also admitted that the crisis was taking its toll on the well-being of its employees and contractors, with a rise in safety incidents, which would be countered by new measures. But community and business organisations have warned against complacency, saying stress levels were in any case too high amongst employees and contractors whilst companies were not doing enough proactively to build resilience in the workplace and community.