Newcastle Growth Coalition ‘extremely concerned’ over AMSA wind down

AMSA (Arcelor Mittal South Africa) CEO Kobus Verster said the decision by the board and management was not taken lightly and comes off the back of ‘extensive’ negotiations with the national and provincial government, Eskom and Transnet and other stakeholders.

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However, the Newcastle Growth Coalition is not giving up just yet. Johan Pieters, the chairman of the coalition, sent out a message to its members shortly after Verster’s announcement to inform them that he had already engaged with AMSA and entered into discussions with DITC (Department of Trade Industry and Competition), EDTEA (Economic Development, Tourism, and Environmental Affairs) and the KZN Premier.

“The provincial and national governments can still stop this closure,” Pieters said.

In correspondence addressed to Yamkela Fanisi, the spokesperson for the DTI national minister, Parks Tau, Pieters outlined the advantages of having the steel giant remain open and enquired as to what funding was suggested during initial discussions.

“A national task team was set up by the minister (led by Dr. Tebogo Makube) to work on AMSA’s requests. During November 2024 we (the coalition) received a call from AMSA to inform us that they were trying their best but the government was not coming back to them.

“The national task team of DITC was informed that AMSA urgently required feedback from the government on or before January 3. Up until today, no feedback has been given by the minister or the premier’s office,” Pieters explained.

He implored the government to intervene for the sake of Newcastle and its people.

Response from Ministry:

There was a swift response by the national government to the Newcastle Growth Coalition’s press release.

Yamkela Fanisi, spokesperson for the national Minister of Trade, Industry, and Competition, acknowledged the economic consequences that the closure would have, particularly in the context of job losses and its downstream effects.

“The steel industry is a critical component for the reindustrialisation of the South African economy,” Fanisi remarked, stressing the government’s recognition of the issue’s importance.

Fanisi noted that the government had made attempts to intervene but suggested that the actions had been insufficient.

He assured the Newcastle Growth Coalition that the ministry would continue its efforts to seek solutions aimed at improving productivity, attracting investments, and driving technological advances, as well as addressing the pressing issues of decarbonisation within the steel sector.

While the government’s stance was clear in its commitment to finding solutions, Fanisi’s statement failed to address the specific concerns raised by AMSA regarding the factors undermining the company’s financial sustainability and long-term viability.

One of the major issues highlighted by AMSA is the Price Preference System (PPS), which, according to a joint oress release from AMSA and the National Union of Metalworkers of South Africa (NUMSA), allows competing companies to receive discounts of up to 40%, creating an uneven playing field in the market.

AMSA has called for a review of this system, along with the removal of the export tax, both of which the company claims have significantly impacted its competitiveness.

In addition to the PPS, the steel giant is also grappling with the burden of high electricity tariffs and escalating rail and port charges, further eroding its ability to operate efficiently.

NUMSA has raised alarm about the impending loss of some 3,500 jobs, urging the government to take swift and decisive action to preserve both the steel industry and the livelihoods of those dependent on it.

Fanisi, however, said that while the DTIC had responded to AMSA’s concerns within the given timeframe, it seems that the correspondence did not reach its intended recipients at AMSA.

This is currently under investigation, according to Fanisi’s office.

• Written by Sam Wade on behalf of the Newcastle Growth Coalition

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