Government steps in to save South Africa's struggling steel industry

THE government is racing against time to avert the collapse of the steel industry, engaging major player ArcelorMittal South Africa (Amsa) in crucial negotiations aimed at sustaining its Longs Steel business.

- TAWANDA KAROMBO

Amsa had decided that it was closing its longs steel manufacturing plants in Vereening and Newscastle by April this year, but said on Thursday that it was engaging the government and financiers “regarding funding and related matters to enable the deferral of the wind-down of the longs” business.

The company and government were also discussing steel industry issues that were affecting the viability of Amsa’s operations, including an influx of cheap scrap and imports of cheaper steel as well as logistical constraints.

The Congress of South African Trade Unions (Cosatu) said it was supportive of these measures.

It said it was “pleased government is assisting ArcelorMittal South Africa keep its longs steel plant in Newcastle operational while a plan to make it sustainable” was sought.

While Amsa has previously blamed the government for not acting speedily to fix the operating environment constraints it was facing, the Department of Trade, Industry and Competition (the dtic) has laid out financial interventions to ensure Amsa preserves its production capacity.