‘Save the Saldanha steel plant’

An ArcelorMittal steel foundry. File picture: Supplied

An ArcelorMittal steel foundry. File picture: Supplied

Published Feb 9, 2016

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Cape Town - The DA in the Western Cape Legislature has called on the national government to help save the Saldanha steel plant by offering ArcelorMittal SA an electricity rebate through winter to avoid closure.

Last week, ArcelorMittal SA placed its Saldanha Works under review, as plunging global steel prices, weak demand and competition from Chinese imports threaten the industry.

DA MPL Beverley Schäfer said the potential closure of ArcelorMittal’s Saldanha Works steel plant should be a wake-up call for the country.

“The closure will cost 1 100 jobs directly, with a ripple effect on the local economy affecting 4 000 jobs in total,” she said.

Highlighting that Saldanha Bay is a key area for growth in the Western Cape with the flagship Saldanha Bay Industrial Development Zone project, Schäfer said the national government must engage with ArcelorMittal on how to prevent the closure of the plant and save jobs.

“There is a need for energy at lower cost than current Eskom prices, energy price stability and certainty. Energy tariff increases are simply not possible,” she said.

According to Schäfer, the DA-led Western Cape government, the City of Cape Town and businesses in the region are working closely together to diversify the energy mix.

She added that the provincial government would offer the Energy Security plan to ArcelorMittal, and would work on supplying liquefied natural gas to the region to make up the energy shortfall.

Schäfer said electricity already accounts for 33 percent of the input costs.

Stressing the importance of job creation in the province, Schäfer said manufacturing has an important role to play in creating these jobs and in diversifying the economy.

“Instead of using the global demand to improve productivity, we have a national government that is imposing further burdens on business.

“Now that demand has slowed down, increased costs make it difficult for business to survive,” she said.

Tony Ehrenreich, Cosatu’s provincial secretary, said the DA was schizophrenic and unsure of its own stance.

Ehrenreich said the DA was moving from its position not to support industries, “which is clearly unsustainable, to the ANC and Cosatu’s position which says you must intervene, subsidise and help”.

Ehrenreich added that while they agreed on an intervention, the DA’s call was naïve.

“What we need to do is have a comprehensive industrial strategy for the steel industry that is linked to the rest of the economy.

“We need a policy on steel that addresses the present global economic realities,” he said.

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