Solidarity asks Minister Patel to intervene in ArcelorMittal retrenchments

Union Solidarity has asked Minister of Trade, Industry and Competition Ebrahim Patel to sit in on an ArcelorMittal meeting aimed at discussing the company's restructuring plans, which could see as many as 2 000 employees retrenched.

The union expressed concern that while the company blamed "power tariffs, steel imports and rail freight tariffs" for the retrenchment plans, ArcelorMittal SA still had capital to make a R300m offer to acquire Highveld Steel's heavy structural mill.

According to ArcelorMittal South Africa, the company will pay an initial R150m when the transaction becomes effective and a further R150m at a later stage, following a payment trigger.

It will either fund the latter amount internally, should the funds be available, or borrow from the Industrial Development Corporation or a similar financial institution with board approval.

The union's statement said Solidarity planned to invite the Department of Trade and Industry to the next ArcelorMittal retrenchment meeting.

"The reason for the invitation is so that the ministry can get first-hand information from the company regarding the reasons for the retrenchments," the statement said, citing the country's unemployment rate of about 29%.

"Taking into account the massive unemployment in the country, the minister must come up with proposals to assist this company, and others that may follow, in these difficult times," the statement said.

ArcelorMittal last week announced that it had entered into an agreement with Highveld Steel to buy its subsidiary the Highveld Structural Mill. HSM is capable of producing heavy section structural steel for infrastructural development and, with further investment, mainline rails, ArcelorMittal said in its interim financial results. 

The company was "mindful and respectful" of the consultation process regarding restructuring, it told Fin24.

"ArcelorMittal South Africa management are both mindful and respectful of the consultation process which has now started with the announcement of the proposed restructuring at the company and will therefore not be providing any further comment on the subject until it is appropriate to do so," ArcelorMittal said in response to questions.

It previously argued that the localisation of mainline rails would support jobs, strengthen industrial capability and enable export opportunities, "while allowing for the transfer of specialised intellectual property and skills associated with rail production." 

The Department of Trade, Industry and Competition did not respond to questions on whether it received the invite by Solidarity and whether the minister would agree to attend the ArcelorMittal meeting.

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