Industrial retreat leaving ghost towns, poverty in its wake

RAMPANT retrenchment by mines and support industries is fast turning places around eMalahleni, Mpumalanga, into ghost towns.

“The mood is forlorn,” said Alisha de Lange, Mpumalanga regional organiser for Solidarity Helping Hand.

“We are busy giving food parcels to the communities. The situation is so dire that we now have volunteers coming all the way from Secunda, Bethal and Middelburg to assist with food parcels.

“We are giving groceries that could last for a month. There are also soup kitchens.”

Companies such as Evraz Highveld Steel and Vanadium, Vanchem Vanadium Products and associated smelters such as Ferro Metals, Assmang and Manganese Metal have all reduced activity.

Trade union Solidarity said Samancor planned to scale down activity at its smelters in a move that could lead to about 200 jobs being cut, while talks on job cuts that could affect about 2 500 workers were under way in the company’s mining division.

Vanchem has dismissed all of its 400 employees and has effectively closed down, according to Solidarity’s head of metal and engineering, Marius Croucamp.

“All the workers are . . . at home. It is a sad situation because they have not been paid their packages. They can only be paid through Vanchem’s liquidation or the sale of the company’s assets,” he said.

Steve Nhlapo, of the National Union of Metalworkers of South Africa, said: “There are no other opportunities in the area. But we are meeting in a task team with the government, trade unions and other employers who have an interest in saving the steel industry.

“We will try to salvage whatever we can.”

Croucamp said that all the companies blamed their predicament on low commodity prices.

“But there is a question mark on that because commodities are stabilising. So pleading poverty as a result of commodities doesn’t make sense,” he said.

South African stakeholders in the steel industry blame parastatals such as Eskom and Transnet for not procuring steel and other services locally.

“It is sad that a company like Evraz, which put all the big structural steel in the stadiums prior to the [Soccer] World Cup, is gone for good,” Croucamp said. “But the issue of local content is part of a 10-point plan of a task team that is discussing issues in the industry.”

Evraz shut its doors after a failed business rescue plan.

Now stakeholders are trying to put on the table a plan that might revive the part of the plant that makes structural steel, which could employ at least 350 to 400 people.

The structural steel plant is still being maintained, is environmentally sound and cost-effective to run.

Nhlapo said that despite the international steel market deteriorating, the biggest problem was the government, which for many years had failed to increase import tariffs.

“Yes, now they have increased them, but they have still not designated local procurement for steel. We are now losing jobs like nobody’s business . . . Our government is now talking about a government-owned steel company. How can you do that if you failed to protect your local manufacturers? The sad truth is that there is no country that can develop without its manufacturing sector,” Nhlapo said.

Henk Langenhoven, chief economist at the Steel and Engineering Industries Federation of Southern Africa, said the main concern, apart from employment numbers dropping continually, was that employment in the main markets for metals and engineering products — mining, construction and the car industry — was falling faster.

“Employment numbers being a good indicator of actual/real economic activity, this means that demand for products from metals and engineering will continue to decline until these trends are reversed and start to improve again,” he said.

Biggest problem was government, which for years had failed to increase import tariffs