Expressions of interest received for AMSA’s Saldanha Steel

13th December 2019

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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The Department of Trade, Industry and Competition (DTIC) has received expressions of interest from two parties that may want to buy the Saldanha Works operation from ArcelorMittal South Africa (AMSA).

AMSA last month announced that it would close Saldanha Steel following an operational review of its asset footprint.

Trade, Industry and Competition Minister Ebrahim Patel has urged AMSA to continue working with government and other social partners to reverse this decision and find solutions that would keep Saldanha Steel in operation and its workers in employment.

“If no solution is found with ArcelorMittal, they should consider selling the plant to ensure the country does not lose industrial capacity and workers, and to ensure that communities are not displaced,” Patel said.

The Ministry subsequently met with AMSA’s management to request the company to review its decision. The Ministry advised that potential buyers were considering making a bid for the steel plant.

“We are encouraged by these early expressions of interest in Saldanha Steel. If AMSA is still intent on closing Saldanha Steel, a decision we do not agree with, then, nonetheless, we urge the company to engage actively and openly with potential buyers and to offer them terms that would enable operations at the steel mill and lead to employment opportunities for the local community.

“Saldanha Steel plays an important role in South Africa’s industrial footprint. For the Saldanha region specifically, the steelworks is an important source of employment and development,” Patel said.

He indicated that the steel producer’s decision to place Saldanha on care and maintenance and retrench almost 1 000 workers camer despite considerable efforts by government to provide AMSA with support to prevent job losses across the company’s operations, including Saldanha Steel.

Patel said the DTIC, together with the Department of Public Enterprises, power utility Eskom and freight utility Transnet, had engaged with AMSA management on support that could be provided to reduce energy and logistics costs for the company and at Saldanha Steel, in particular.

He indicated that government had facilitated engagements with iron-ore and coal producers, as well as organised labour, to come up with solutions to reduce costs to avert job losses.

“The combined support package offered by government ranged from concessions on iron-ore pricing to electricity, water and rail tariffs, providing considerable cost savings. AMSA has asked for support, however, in excess of what was made available through the efforts of government.”

Patel also noted government’s support of AMSA, with tariff protection from imports including safeguard duties and the designation of steel for State infrastructure projects.

Further, he said that the South African government had brokered a pricing agreement for upstream steel mills to remain sustainable in the domestic market and to provide a competitive fair price for the downstream industry to support the entire steel and metals value chain.

Patel also indicated that the African Continental Free Trade Area, which will come into effect in July 2020, was expected to open up additional demand for primary steel across the continent.

“We have embarked on the process to develop a master plan for the steel and metals value chain in South Africa, which will include both demand- and supply-side measures, and bring greater competitiveness and dynamism to the entire steel and metals industry.

“A number of initiatives are in progress to foster greater demand for steel by both the public and private sectors, and to improve the cost base across the industry,” Patel said.

Meanwhile, Solidarity has urged AMSA to save jobs by selling the plant.

“Solidarity is strongly opposed to the closure of this plant. All [options] to save this plant must be investigated and its closure should be prevented at all costs,” said Solidarity Metal and Engineering Industry deputy general secretary Willie Venter.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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