Business leaders are franticly trying to avoid the economic fallout with 2 280 jobs to be lost following ArcelorMittal’s decision to shut down the blast furnace in Newcastle, KZN.

ArcelorMittal announced on Tuesday that it will be embarking on a process to wind down the company’s ‘longs business, subject to a due diligence and consultation process’.

At least 1 400 permanent staff and 880 contractors in Newcastle will be affected, according to ArcelorMittal’s Chief Executive Officer Kobus Verster. This excludes the coke operations which employs 400 people.

The announcement caught the town by surprise with Louw Conradie, the chairman of the Newcastle Sakekamer, saying the company’s announcement came as a ‘big shock’ to the community, especially considering the timing, just ahead of the festive season.

“All of the businesses in Newcastle will be affected by this. It will have a ripple effect on all commercial activity right down to the informal traders.

“I hope something can be done to avoid this and to mitigate the job losses that will occur.”

Johan Pieters, the chairman of the Newcastle Growth Coalition, engaged with the management of Mittal and facilitated meetings between the steel giant and government role-players such as KwaZulu-Natal Premier Nomusa Dube-Ncube and Economic Development MEC Siboniso Duma, as well as with Trade and Investment KwaZulu-Natal.

“It is important for the Growth Coalition of Newcastle and KZN to see how we can assist to save the ArcelorMittal Newcastle works and indirectly, our town,” Pieters explained.

Verster confirmed that a consultation process with stakeholders is underway but is sceptical that it will yield any results.

“What can they do, realistically?” asked Verster.

Emphasising some of the major issues that contributed to ArcelorMittal’s decision, especially concerning the extensive and ongoing challenges with government entities such as Eskom and Transnet, Verster added: “I keep an open mind but I think those are complex issues that cannot be fixed in the short term. How do you solve those complex issues?

“It was a difficult decision in a country where there is high unemployment. We are keenly aware what this adds up to,” acknowledged Verster.

He stressed that the company will try to absorb as many people as it can through vacancies available elsewhere and that the plant will be stopped in such a way that ArcelorMittal will be able to restart ‘if things change in the future’.

The company’s decision not only affects most plants at the Newcastle Works, but also the Vereeniging Works, and ArcelorMittal Rail and Structures.

However, the ‘process’ excludes the coke batteries at Newcastle which will remain operative, producing metallurgical coke for use at the Vanderbijlpark Works and sale of commercial market coke to the ferro-alloy industry.