BL Premium reports that the inefficiencies at Transnet have increased costs exponentially for the steel industry and have brought the sector to its knees, according to ArcelorMittal SA (Amsa), which is on the verge of shedding 3,500 jobs.
Amsa relies heavily on rail monopoly Transnet to transport 91% of the iron ore and 100% of the coking coal consumed at its Newcastle and Vanderbijlpark plants. CEO Kobus Verster pointed out that between 2019 and 2022, the company’s use of road transport to bring raw materials to its plants grew 210%, while production fell 20%. “The situation has worsened in the current financial year. The impact of this is that we have to use road transport, which comes at a premium. And internally, we have to incur additional costs because our plants are designed with equipment to tip into conveyor systems to take to the ovens,” Verster indicated. He went on to say: “In October we had to stop a blast furnace in Newcastle for five weeks because we ran out of iron ore because Transnet could not deliver it. And to stop a blast furnace comes at an enormous cost.” The net result of Transnet’s underperformance was that Amsa had to idle its blast furnaces for 33 days at Vanderbijlpark, the first time that had happened for unplanned reasons. Amsa said on Tuesday that it would embark on a retrenchment process and the number of jobs affected would depend on the alternatives identified through the consultation process. “However, at this time it is estimated that approximately 3,500 people (own and contract employees) may be affected. The company will continue to engage directly with government throughout this process,” Amsa said in a statement.
- Read the full original of the report in the above regard by Kabelo Khumalo at BusinessLive (subscriber access only)
- Read too, Thousands of jobs at risk as ArcelorMittal shuts Newcastle, Vereeniging operations, at Fin24
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