Unions have voiced concern at the recent announcement by ArcelorMittal to slash 2 000 jobs, with Solidarity warning that the retrenchments may be the first of many to come.
On Wednesday, the local unit of the giant steel maker announced that it would be embarking on a restructuring plan as part of a strategy to reduce costs.
The steel industry has been reeling from high costs for electricity and raw materials amid poor domestic economic growth.
"We warned Nersa that this increase will destroy the industry. Yet, they continued and now the employees must suffer the cost," said Marius Croucamp, Deputy General Secretary of Solidarity.
He added that the recent implementation of carbon tax piled more pressure on the struggling industry, arguing that it was poorly timed.
"Higher input costs in the steel industry, which is already under enormous pressure, will necessarily lead to job losses," said Croucamp.
The first phase of carbon tax came into effect on June 1 and will run until 2022. It is set at R120 a ton of carbon dioxide emitted. Companies have a tax-free allowance of 60%.
First of many
Solidarity warned that if key players in the steel industry do not intervene urgently, ArcelorMittal retrenchments "may be the first of many to follow".
ArcelorMittal employs a total of 8 769 workers.
For its part, the National Union of Metalworkers of South Africa (Numsa), which is the majority union at ArcelorMittal, has lamented the way the company has arrived at the number of people whose jobs are on the line, without first consulting with it.
Numsa Sedibeng Regional Secretary, Mokete Makoko, said a notice received by the union from the company did not mention the number of employees who will be affected by the restructure. He claimed the company’s lack of consultation before arriving at the 2 000 figure was a "flagrant disregard" for workers' right to due process.
'We will do everything'
Last year government intervened in a decision by the US to impose a 10% ad valorem tariff on imports of aluminium products, and a 25% ad valorem tariff on steel products, for national security purposes.
Through engagement, the US granted SA tariff exemptions on 161 aluminium and 36 steel products.
SA’s aluminium exports to the US account for 1.6% of total aluminium imports by the US. SA’s steel exports in 2017 only accounted for 0.98% of total US steel imports, Fin24 previously reported.