Steelworking slip hammers Vaal Triangle
AS SOUTH African steel companies fight for survival, the streets of Vanderbijlpark, the heart of the industry, are lined with unemployed people looking for piece jobs.
The once-thriving town, which owes its existence to the birth of local steelmaking a century ago, has suffered with the industry after a slump in local demand and a flood of cheap Chinese imports.
Local steelmakers have not turned a profit for four years.
Recently, the second largest, Evraz Highveld, was forced into business rescue.
The biggest, ArcelorMittal South Africa, warned it would close down some plants and divisions in both Vanderbijlpark and Vereeniging if the government did not provide some protection against cheap imports.
ArcelorMittal SA’s value has fallen dramatically, from about R60-billion in 2007 during the commodities boom to little more than R5-billion.
Late last year, the company said it would retrench 200 managers at its Vanderbijlpark plant. It has not replaced workers who have retired and has implemented several rounds of retrenchments.
At the once-vibrant KwaMasiza hostel, in the heart of Sebokeng, near Vanderbijlpark, almost 100 former ArcelorMittal SA employees said they had been unfairly retrenched.
They have to make do with working for contractors and get by on government grants.
“I will not leave this hostel. I will fight if they kick me out. ArcelorMittal kicked us out
Chinese steel is now officially cheaper than cabbage
with packages [but] without pension. And the money they gave was very small. It is finished. I have not seen my children for more than 12 years,” said Ernest Sigaqane, originally from the Eastern Cape.
But ArcelorMittal SA said all retrenchments complied with the Labour Relations Act and employees received compensation as agreed between the parties.
Sigaqane and his former colleagues have been living in squalid conditions at the hostel, which fell into disrepair after the company sold it.
The men at the hostel said they wanted their jobs back.
“They [the company] forced me to take a package. I did it because I had nothing. Now I am sitting here with nothing. My ears are not working. I wanted them to take me out on disability pension. I have worked for them since 1973. Why would they do this to us?” asked Phineas Mdobela.
Samson Mokoena, a youth leader with the Vaal Environmental Justice Alliance, said employment opportunities in the area had dwindled as contracts from the steelmaker dried up, putting small steel fabricators out of business.
“There are contractors who do come here but this is on a piecemeal basis. But rampant retrenchment doesn’t help the situation and this becomes unsustainable,” he said.
Mduduzi Duma, also from Sebokeng, said youth are leaving to go to Johannesburg and other areas with the hope of getting employment because “everything is dead here”.
Hester Davis, the chairwoman of the Vanderbijlpark Business Chamber, said the survival of the steel plant and the town would depend on global steel prices recovering and the competitiveness of the local plant.
“We had meetings with stakeholders, such as ArcelorMittal and Sasol in the Vaal Triangle, and the impression is that these stakeholders have strategies to survive the difficult economic times, and that their view is that the economy will change for the better in 2017,” she said.
Steel contributes between 15% and 20% of the economic activity of the Vaal Triangle.
The industry’s biggest headache is the global oversupply of steel, estimated at 240 million tons, and cheap steel being dumped by China.
China’s steel is now officially cheaper than cabbage. After a 10-day slump in the metal, a ton of hot rolled coil from China is sold at 105 yuan (about R210), whereas the average wholesale price of round white cabbage in Shanghai is 115 yuan a ton.
On top of global pressures, domestic steel companies have to deal with rapidly increasing electricity prices and an unreliable power supply.
Companies are now begging the government to implement a dumping tariff on cheap imports to help them — and, by extension, their staff.
“There is hunger everywhere. The situation is getting more serious every day. There are definitely going to be no employment opportunities at ArcelorMittal,” said Mokoena.