My first exposure to Evraz Steel was interviewing the Russian super-model lookalike who was sent to SA as the “spokesman” when the company first acquired Highveld Steel. It was during the early days of BRICS and there was great hope SA’s mighty new political ally would pour billions into the country. Much like the BRICS Bank – into which SA taxpayers will be injecting R12bn over the next three years – big politically-driven dreams made in sunshine often evaporate during more turbulent weather – leaving those who believed all that hot air paying the price. Evraz’s investment has been a disaster from every conceivable angle. But now crony capitalists own a slug of competitor ArcelorMittal, what is left of the once proud Highveld Steel is being fought over like vultures. Here’s the inside story from Solidarity’s General Secretary Gideon du Plessis who believes those behind the systematic murder of the company should be charged with treason. – Alec Hogg
By Gideon du Plessis*
Numsa and Solidarity recently had no choice but to sign a retrenchment agreement under duress with Highveld Steel where 1 721 employees had been retrenched due to the closure of the plant. The company is, however, not in a position to pay retrenchment packages, but our members want to access the Unemployment Insurance Fund (UIF) and their pension money and requested us to sign it. The emotional experience of having to see how those highly skilled employees now have to queue for food hampers that are being distributed by Solidarity’s Helping Hand, turned into anger about the reason for the closure of the 50 year-old plant which, until recently, provided work to 2 224 workers and provided the lifeblood of approximately 13 000 other workers and dependents working for 600 Highveld service providers.
Furthermore, Highveld contributed approximately R5 billion per annum to the local Emalahleni economy.
Walking about the deserted plant recently, the first anti-South African political decision struck me – Kusile is being built right next to Highveld with steel imported from China, steel which could have been supplied by Highveld. It may well be a win for a Brics partner, but it meant the destruction of thousands of jobs in South Africa.
Greedy capitalists also have their share in Highveld’s demise. In the first instance, Evraz, the Russian owner was only interested in taking money out of the country and was not interested in investing a cent in the plant. Secondly, when Highveld was placed in business rescue in 2015 to protect the company, creditors and workers, Sasfin insisted on the immediate repayment of the outstanding R100 million loan granted to Highveld in 2014. Moreover, Sasfin imposed a penalty of R35 million for the early repayment of the loan – frankly an underhanded move to force Highveld to its knees because shortly before the move, Sasfin had made a ridiculous offer for the takeover of Highveld, which had failed though. Sasfin may as well consider removing that part on its web page that refers to integrity and upliftment of communities in those places where they are involved.
Read also: Russian-owned Highveld Steel likely to shut shop – 2 100 jobs in balance
Highveld made ceaseless attempts to obtain working capital of R150 million from the Industrial Development Corporation (IDC) to get the structural mill – the only one of its kind in the country – going again to save 1 700 jobs in so doing. However, so far it was unsuccessful – this while the IDC recently announced that they were willing to support a Chinese group to establish a steel plant in SA worth R75 billion. An appointment was also secured with Luthuli House and although Enoch Godongwana, a high ranking ANC official showed real concern over the matter, he seemingly found himself on the wrong side of the political grouping behind Highveld’s demise and was unable to assist.
Highveld once again showed that government’s training layoff scheme is dysfunctional. By the end of 2015, all Highveld stakeholders agreed to the scheme in terms of which affected workers would receive training in portable skills and the Department of Labour would pay the workers a monthly stipend. Despite the fact that the department had confirmed and approved the process and payment in writing, no allowances have been paid, and Highveld has been burdened with an additional cost of R34 million for stipends. The rumour has it the agenda of the department was to embarrass Numsa through the process, since Numsa, a strong anti-Tripartite Alliance organisation, was instrumental in selling the scheme to the Highveld employees and then ended up having to face angry and disappointed workers. To aggravate matters, Eskom still continued to levy an additional tariff for maximum demand of R6 million per month, as if Highveld was producing at full capacity despite the plant’s closure months ago and despite an application for a waiver of the maximum demand tariff.
Read also: Even cheaper Chinese steel could kill ArcelorMittal. Does Pretoria care?
The lack of support from the Department of Labour (in this case, the Department of anti-Labour), the IDC’s reluctance and Eskom’s inflexibility not only resulted in direct job losses, but it also gives rise to the fact that the Treasury is losing around R15 million in tax revenue every month. The closure of Highveld Steel also has a significant negative impact on the country’s trade balance, since the steel in the Highveld product range would now have to be imported.
Highveld’s ruin began to make sense when Sake Rapport on 14 February 2016 reported that ArcelorMittal (Amsa’s) outgoing CEO Paul O’Flaherty indicated that with Highveld’s demise Amsa could now supply the entire market. This announcement happened to come at a time when it became known that Likamva Resources was Amsa’s potential black empowerment partner. Yakhe Kwinana, a board member of the Jacob Zuma Foundation and Leslie Maasdorp, Brics Development Bank Vice-President, serve on Likamva’s board of directors. Therefore, don’t be surprised if the IDC decides to support either Amsa, or a Chinese group to also take over the Highveld Mill based on Highveld’s own business plan.
There is so much more to disclose, but I was warned about certain information that is way too sensitive, and certain names I am not allowed to mention, because those individuals are apparently ruthless and worse than the mafia.
The end result, an anti-South African political agenda and greed resulted in the lives of thousands of workers and their dependents being wrecked and the destruction of a local economy. A tragedy – yes. Treason – most definitely!
- Gideon du Plessis, Solidarity General Secretary
