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Covid-19 and retrenchment double whammy for workers at ArcelorMittal in Saldanha


Nobulumko Nkondlo is an ANC MPP in the Western Cape provincial legislature, and the ANC’s Shadow MEC of Finance and Economic Opportunities.

The West Coast town of Saldanha has been hammered by the closure of ArcelorMittal’s Saldanha Steel plant, with not just the plant’s workers retrenched, but scores of downstream jobs lost as well. And now Covid-19 has struck…

As the country is locked down for 21 days in the fight to contain the spread of Covid-19, the working class and poor are not spared the further effects in an unequal society like ours.  

The workers at ArcelorMittal have been battling against unemployment and an inability to fend for themselves and their families throughout the 2019 festive season. More than 50% of the workforce have been sitting at home since the first announcement of the closure and a few are left with less than a week to officially exit the employ of ArcelorMittal SA (AMSA). 

It is not only the estimated 1,000 AMSA employees who face retrenchment by the end of March 2020, but almost the same number of workers are facing the same fate. That will make this number rise to 2,000 job losses with the closure of the Saldanha plant.

These are numbers from companies contracted to AMSA, who have also concluded the Section 189 retrenchment processes. They include companies like Tube City, Bid Port Operations, Westarcor and Uniref, while other companies are still finalising their retrenchment processes. 

The first group of retrenched employees left in December 2019, and soon only 18 employees will be left for maintenance and security purposes. 

David Maynier, the Western Cape MEC of Finance, Economic Development and Tourism, responded to questions sent on 13 March 2020, confirming these facts. He further pointed that “AMSA has been circumspect in selling its plant for a variety of reasons, including their hope that when the business cycle and market gain positive momentum, they may be able to reopen their plant”.

Such are the wonders of private markets, who at the sight of losses, won’t think twice about packing up and going, leaving governments and society to pick up the pieces to mend back into dignity those affected. 

Since the first announcement was made on 11 November 2019 that the company would be closing, Saldanha Steel following what it called an operational review of its asset footprint, Minister Ebrahim Patel urged AMSA to continue working with the national government and other social partners to find solutions that would keep Saldanha Steel in operation and its workers in employment.  

The minister was very clear that if no solution was found with ArcelorMittal, the company should consider selling the plant to ensure the country does not lose industrial capacity and workers, and also ensure that communities are not displaced.  

He said, “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 offer them terms that would enable operations at the steel-mill and employment opportunities to the local community.” 

Over and above this, the Department of Trade, Industry and Competition together with the Department of Public Enterprises, Eskom and Transnet, engaged with AMSA management on the support which could be provided to reduce energy and logistics costs for the company and at Saldanha, in particular.

The combined support package offered by government ranged from concessions on iron ore pricing, electricity, water and rail tariffs, to providing considerable cost savings.  

Despite all government support, AMSA has gone on to retrench workers. What is concerning in the provincial government intervention – something that has been raised by the ANC – is the lack of integration and coordination of government players both horizontally and vertically in this situation.   

Regarding support to SMMEs and downstream industries affected by the closure, we are told of meetings facilitated and discussions taking place with SEDA, DTI among others, with three affected companies having applied to the provincial department for Booster Fund assistance. These companies were reliant “almost 80%” on AMSA as their core business.

So, as we endure the Covid-19 lockdown, let’s not forget that to millions this brings additional burdens over the multiple challenges they face due to their economic standing.   

It is a double whammy for the AMSA and other workers in Saldanha. It is happening right under our noses, having their plight move down the priority list in the Covid-19 pandemic. For them, life has become bleaker. DM


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