Trade unions Solidarity and the National Union of Metalworkers of South Africa (Numsa) have urged government to intervene in the collapse of Evraz Highveld Steel & Vanadium to prevent the loss of a strategic player and thousands of skilled jobs.
The steel major on Tuesday issued notice to 1 800 of its staff members as a result of the Department of Labour’s nonpayment for the previously agreed Training Layoff Scheme and the failure of the Industrial Development Corporation (IDC) to provide additional funding of R150-million.
“The absence of this funding, which is critical for the continuation of Highveld . . . may result in the complete wind down of the business and the retrenchment of all employees,” said the unions in a joint statement.
They further highlighted the devastating implications of Highveld’s downfall, not only for the local economy but also for the steel industry and South Africa as a whole.
The unions noted that Highveld Steel could be “a clear case study” for government to show its ability and willingness to deliver on its own strategic objectives.
“These priorities have been made clear, with President Jacob Zuma reiterating them as recently as his address in last week’s State of the Nation [Address].”
Solidarity and Numsa argued that a government intervention in the demise of Highveld Steel would preserve at least 1 750 skilled and well-paying jobs. “Saving this business would ensure that unique structural steel capacity is maintained in South Africa and deindustrialisation reduced.
“Further, it would support local skills, capacity and domestic supply chains. Importantly, it would also reduce imports and pressure on the current account by manufacturing local steel.”
The unions added that the IDC, which had a mandate to preserve South African industrial capacity, had set a benchmark to invest R450 000 per job in the future. It would therefore cost as low as R85 000 per job at Highveld – less than 20% of this benchmark in current terms.
“These skilled jobs are paying decent wages. In addition, Highveld contributes about R200-million to the fiscus in [pay-as-you-earn tax] and supplies local supply chains to the value of R4-billion in yearly procurement. Saving Highveld is clearly a win-win situation.”
The unions reiterated that, with the right level of funding on commercial terms, the business could be saved.
The two unions were trying to secure an urgent meeting with the President on this matter.