A black business chamber and a community activist in Newcastle have accused embattled steel manufacturer ArcelorMittal SA (Amsa) of failing to empower emerging businesses and black residents from the KwaZulu-Natal town.
Victor Cele, the chairperson of Northern KwaZulu-Natal Combined Economic Chambers, told Sunday World during an interview on Friday that they were in favour of the government coming up with measures to save Amsa’s Newcastle operations.
However, Cele, whose business chamber is an umbrella body for enterprises and business forums in Amajuba municipality, said the state should introduce conditions that would compel Amsa to empower emerging black contractors hailing from Newcastle.
His comment comes after Amsa announced this week plans to transition the Newcastle long-steel plant into care and maintenance, with production anticipated to stop later this month and the wind-down of the remaining production processes completed by March.
“If Amsa closes the plant and retrenches thousands of people, Newcastle will be in crisis and turn into a ghost town.
“Many of those who are going to be retrenched are taking care of at least five family members,” said Cele.
“We are in favour of the government saving the company but there needs to be terms and conditions because as local black people, we should be immediate beneficiaries of Amsa’s business but that’s not been happening.
“Amsa is a company that’s resisting transformation, more especially to black people who are based in Newcastle. Even for me to [be awarded a contract], I penetrated it through an effort of business structures I grew up in,” he said. Cele, who runs a business providing short-distance trucking services to local mines and production companies, was referring to a three-year contract his consortium was once awarded by Amsa.
The contract entailed the distribution of personal protective equipment, steel-making material, among other things, to Amsa’s Newcastle plant between 2020 and 2023.
“When the contract ended, I’d no interest to renew it because when the contract was running Amsa was renegotiating for me to drop my rates. They wanted to pay me far less than what I was being paid, which was unfair because the costs of running my business are always rising,” said Cele.
To fast-track transformation at Amsa, Cele added that his business chamber persuaded the company in the past to start an incubation centre where local emerging businesses could have a platform to get access of opportunities at the steel producer. Cele’s views were echoed by community activist and an official of Sisonke Justice Network Lucky Shabalala, who, however, accused greedy politicians of benefiting from Amsa’s empowerment contracts at the expense of locals.
“I don’t believe Amsa has service providers who are black locals. I’m also not sure what Amsa has done for the Newcastle community in terms of corporate social responsibility,” he said.
