The Newcastle Business Chamber and the Association of South African Chambers has said that potential 3 500 job from ArcelorMittal South Africa’s (Amsa) winding down the Longs Business will have a devastating impact on the South African and KwaZulu-Natal economy.
Amsa on Monday announced that it was left with no alternative but to proceed with the winding down of the Longs Business, despite their best efforts and the government help, it was not enough to sustain the business, and at year-end.
Morne Seaman, president of the Newcastle Business Chamber, yesterday said that in 1969, the government announced the establishment of the third Iscor Works in Newcastle (Amsa).
“As a direct result of Iscor’s presence, Newcastle rapidly developed into an industrial town and became a key growth point in Northern Natal. In Newcastle, almost anyone on the streets has either worked for Amsa or knows someone who has,” he said.
Seaman added that the impact on Amsa employees will be the most profound.
“The prolonged uncertainty surrounding the potential closure of Amsa Newcastle must have taken a tremendous toll on the employees and their families. With unemployment already at a high level, many long-serving employees will face significant challenges in finding new employment,” he said.
Seaman said that the closure of Amsa Newcastle will have a profound impact on both livelihoods and businesses in Newcastle and surrounding areas.
“We hope this development will serve as a catalyst for open and constructive dialogue between businesses, the Newcastle local municipality and the provincial government. As the Newcastle Business Chamber, we stand ready to facilitate these essential conversations.”
Melanie Veness, chair of the Association of South African Chambers (ASAC), said that the winding down of Amsa’s Longs Business in Newcastle and Vereeniging, was devastating for the towns concerned and for South Africa as a whole.
“We had hoped that with strong government policy intervention, the closure of the division could be averted, but it appears as if the requested interventions failed to fully materialise as anticipated. South Africans deserve to be told why this is the case and why not enough was done to save these jobs,” Veness said.
Samantha Wade from the Newcastle Growth Coalition said they were concerned about the situation at Amsa.
“We have received confirmation from the Department of Trade, Industry and Competition that the ministry would continue its efforts in this situation to find solutions that would be beneficial to the economy,” Wade said.
Malcolm Hartwell, Norton Rose Fulbright director and Master Marine, said that Amsa announced that they would be mothballing their Newcastle and Vereeniging steel mills.
“As the only producer of this product in the country, it obviously has significant effects not only on the industries they serve but also on the South African economy. Obviously, the loss of a heavy industry such as this will affect everybody involved in the manufacture and transport of these products, which would include the local logistics industry,” Hartwell said.
“Presumably, the buyers of ArcelorMittal’s steel will now have to buy this product from someone else, which means that the same amount of steel should still have to be transported. The transporting will accordingly still be done in South Africa, but it may now be carried out by the international logistics companies that the Chinese suppliers tend to favour. This means that it will still have a negative impact on the smaller South African logistics players who currently service ArcelorMittal’s needs.”
BUSINESS REPORT