Vaal shudders as ArcelorMittal shutdown looms 

Sebokeng township-based businessman Enock Motaung, who makes a living designing steel gates, is worried the proposed closure of the ArcelorMittal SA (Amsa) steel plant could ruin his business and impact his livelihood. 

The announcement by the multinational steel company that it will be shutting down its Vereeniging operations has created anxiety in the community, small businesses and business forums in the Vaal area. 


The community’s economy has been intrinsically linked to the company for decades, providing thousands of jobs to residents of nearby townships. 

The plant has also been the lifeblood of SMMEs and other businesses in the area. 

“I design security gates and palisade fences for the communities in the area. If this plant shuts down, I won’t have a chance to provide for my family. It’s a sad situation for me and other businesses that rely on Amsa for steel,” said Motaung. 

An employee from Sebokeng who works at the plant said he was worried about his family. 

“I don’t know what I will do if this plant shut down. I have been supporting my family from the money I earned at Amsa and if it shut down, that means my family of six will bear consequences,” said the man who asked not to be named. 

Hawker Melissa Phori, who has made a living selling food in the area, is uncertain about the future. “The government needs to do something about the situation as we survive through the company here,” she said. 

The threat to close the plant operations has been blamed on cheap steel imports. At least 3 500 workers are set to lose their jobs.  

The secretary general of the Vaal United Business Forum, William Mphuthing, said the closure would cause distress to small businesses that had contracts with the multinational. 

He also stated that as such, even local companies and small businesses that were buying steel from Amsa, including people working for the same enterprises, would all lose income based on the closure. 

“If this closure goes ahead, crime rates will escalate in the Vaal as many people many families are going to suffer, and this will impact badly to the economy in the area. We already have a high rate of unemployment in the Vaal, and when this company closes down, it’s going to be a disaster,” said Mphuthing. 

“There are also politics at play here. You need to understand that Amsa as a European company feels that the role played by the Chinese steel manufacturers was aimed at taking it out of the business.

As we all know China is part of Brics, there are politics behind the frustrations of Amsa to keep the business running as there is this cheap steel coming from China and infiltrating the market. In that sense, Amsa is actually losing money to those Chinese companies, and the government is doing nothing about it as it is part of Brics,” he said. 

“The sad part is that our own government is not taking us seriously as black business owners, as we are regarded as chancers. There should have been a consultation that was made to deal with the crisis but as business forums we were never consulted.”  

 Independent researcher of township economies in the Vaal, Nicho Ntema, said the threat of the closure of the plant had been going on for years. 

“These issues do not start now, as it has been going on for many years, and also involve other international issues, whereby other countries have ring-fenced their locally produced steel makers.

In the case of Amsa, that did not happen, whereby cheap steel is being imported to the country and as such, Amsa found itself on the back foot of making a profit. Australian company Blue Scope Steel faced a similar situation as Amsa, where cheap steel was being imported to the country. If those companies are not being protected from outside manufacturers by their governments, then, there will be these cases,” said Ntema. 

Business activist and CEO of Vaal Business Corporation Klippies Kritzinger said they had various meetings with Amsa to discuss issues around operations at the company and the effects that communities, businesses and employees found themselves in.  

“Vaal has 80% unemployment already, with the broke Emfuleni Municipality at hand. Many people will end up committing suicide due to lack of employment. We are hoping that there will be a solution, and I need to point out that Amsa is being killed by steel imports from  
other countries.” 

ANC Sedibeng chairperson and the deputy chair of chairs in the Gauteng legislature, Thulani Kunene, played down the impact of the closure in the Vaal.  

“We are not going to be heavily impacted as Sedibeng as it appears in the media. Newcastle is the one that is going to be heavily impacted as the entire plant will be shut down. As for our region, we are hoping that those 200 plus employees from Vereeniging will be absorbed to the main plant in the Vanderbijlpark” he said. 

Amsa’s announcement to shut down its long steel operations in Newcastle and Vereeniging plants is due to financial challenges and difficulties in keeping the company going. 

Labour and employment minister Nomakhosazana Meth and the CEO of Amsa, Kobus Verster, met on Friday in Vanderbijlpark to discuss the matter. Speaking to Sunday World after the meeting, Meth said they had requested that Amsa delay the retrenchment of workers. 

Visit SW YouTube Channel for our video content

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News