Saldanha steel plant closure will be 'catastrophic' for West Coast

13 November 2019 - 12:42 By Jamaica Ponder and Maggie Connolly
The steelworks at Saldanha Bay on SA's west coast. Operations will begin winding down early next year.
The steelworks at Saldanha Bay on SA's west coast. Operations will begin winding down early next year.
Image: 123RF/Peter Titmuss

The impact of ArcelorMittal SA winding down operations at its Saldanha steel plant early in 2020 will be catastrophic for the region, about 100km north of Cape Town.

An estimated 900 workers will be left jobless by the end of the first quarter of 2020 as the factory scales back production from its current 1.2-million tons of steel each year to none.

The West Coast Chamber of Business has called for a meeting with stakeholders in the steel industry, warning about the impact of the closure.

Shanah Damonse, chairperson of the chamber, said it would be catastrophic. “No one can afford more unemployment,” she said.

“Nine hundred people are being retrenched. If those 900 people are responsible for four people in their household, 3,600 people are being indirectly impacted.”

She said this was taking into account only the immediate impacts. It was expected that there would be a ripple effect on several small businesses involved in the Saldanha steel industry, leading to even more job losses.

“I think the magnitude is much bigger than we can imagine. The reality is we’re not going to see the scale of the damage quite as soon as we’d like to. It’ll probably happen in the next month to three months,” said Damonse.

The South African Social and Economic Development Forum has called for a march to the factory gates.

The organisation said in a statement that it was writing to trade and industry minister Ebrahim Patel and President Cyril Ramaphosa, seeking their intervention.

“This has a far greater impact than just Saldanha Bay,” it said. “Think about the many contractors and their workers, think about the many workshops, suppliers of goods and services and the permanent and temporary staff and workers who are dependent on Saldanha Steel. Simply said, Saldanha Steel cannot close down at all.”

ArcelorMittal said it was closing the plant because it could no longer compete in export markets.

It was announced in September that the company might close some operations as part of a review aimed at strengthening long-term sustainability amid cheap imports, rising costs and a flagging local economy.

“Saldanha has lost its structural competitive cost advantage to effectively compete in the export market, mainly due to raw material and regulated prices,” ArcelorMittal said in a statement. 

The factory had been suffering severe financial losses which were forecast to continue into the future.