LETTER: Amsa too important to fail

Despite ArcelorMittal SA’s (Amsa’s) announcement that its factory closure has been postponed for another six months, it must unfortunately be accepted that this is the end for this proud, giant steel producer given that all measures taken over the past few years to save it in particular, and the steel industry as a whole, have failed (“Now is an opportunity to stimulate demand side of economy”, July 10). 

Is there anything possible left that can succeed? Amsa’s request that import tariffs be lifted to 25% will not be sufficient. A feasible step in the right direction will be to allocate a government contract to Amsa for total control over steel production in the country to ensure profitability. This would also have to include all imports. This implies that all commercial requests for steel products be forwarded to Amsa in accordance with an advertised tariff list, based on reasonable profits for the company. 

Legislation may be required to categorise Amsa and the steel industry as a whole a national key industry to free it from union action. Sufficient demand for steel products can be created in a reasonable short period, for example through macro requests for railway lines and corrugated iron sheets, both main production lines of Amsa, to repair the damaged railways and build double railway lines to free the roads from heavy truck transport, and also to provide steel and corrugated iron sheets for the provision of economic accommodation for SA’s squatter millions.   

It must once and for all be accepted that a proficient steel industry is an essential pillar of a country’s economy, more so for SA. If it collapses, the whole economy will collapse. Amsa, with its wide range of production capacity (unfortunately not all fully operational) and its able administration system, has the capacity to fulfil the country’s needs in a reasonable short period of time as a government instituted monopoly, similar to Eskom and others. 

Jan Labuschagne
Via email

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