The National Employers’ Association of South Africa (Neasa) has criticised ArcelorMittal’s decision to postpone the planned wind-down of its Long Steel Business, arguing that the move only delays the inevitable.

ArcelorMittal’s decision to delay the closure comes after receiving financial support of R1.68 billion from the Industrial Development Corporation of South Africa SOC Limited (IDC), which aims to protect jobs and sustain operations.

If the company proceeds with the closure, 3,400 direct jobs will be lost, further exacerbating the already high unemployment rate in the country. The Portfolio Committee on Employment and Labour has also voiced its support for government intervention to prevent further job losses.

Announcing the decision to postpone the closure, CEO Kobus Verster emphasised their ongoing collaboration with the government to address the "structural challenges" facing the business.

"We will work closely with the government to address the structural challenges our business has been facing," Verster said.

However, Neasa’s Chief Executive Officer, Gerhard Papenfus, condemned the decision, accusing ArcelorMittal's CEO, of making repetitive and ineffective statements.

"AMSA has merely, again with Government bailouts, delayed the inevitable. Once again, the steel downstream and the South African taxpayer will bear the brunt of AMSA’s crippled attempt at crawling to its inevitable death," Papenfus said.

He also criticised AMSA's continued role in the South African steel sector, calling it a liability.

"AMSA has been and will continue to be a liability for the entire South African steel industry, and the Government’s continued attempts of carrying it to its end, to the detriment of the downstream, is insulting, to say the least," Papenfus added.

FAST COMPANY

#arcelormittal

Is the ArcelorMittal Bailout Just Delaying the Inevitable?