Wednesday, 15 January 2025: - The South African Communist Party (SACP) pledges its solidarity with the workers and reiterates its call for decisive state intervention to halt the erosion of our national industrial base and stop manufacturing de-industrialisation. Ensuring that ArcelorMittal does not mothball or shut down production at the long-steel operations in Newcastle Works, Vereeniging Works and the Retail and Structural Mill must be an immediate priority. In making this call on 3 December 2023, the SACP Central Committee stressed that the continuity of production at the factories that ArcelorMittal adopted its intention to mothball or shut down must not hinge on the ownership of those factories by the Global North-based multinational corporation.
“Therefore, state intervention should include possible transfer of ownership or direct takeover [of the affected productive capacity] from ArcelorMittal to ensure the continuity of production, as opposed to allowing ArcelorMittal to close [it]”, said the SACP Central Committee in a statement of the key outcomes of its plenary, held from 1 to 3 December 2023.
The SACP reiterates this call, further noting that any engagements that may have taken place between the government and ArcelorMittal have not translated into the desired outcomes, given the decision by ArcelorMittal to go ahead and mothball or close down production at the factories to be affected.
Over and above the reported 3,500 direct workers to be affected are others in the medium- and longer-term multiples in the value chain, in the region of 20,000 to 25,000. This is unacceptable in a country struggling with an unemployment crisis, with over 12 million active and discouraged work seekers unemployed.
ArcelorMittal: Privatisation failure
ArcelorMittal is what was once a state-owned Iscor since 1928. It is a result of Iscor’s privatisation in 1989 by the apartheid regime after adopting neo-liberalism in the 1970s. This privatisation was, however, not completed until the early 2000s following the adoption of the neo-liberal economic policy called Growth, Employment and Redistribution (Gear), by the first administration post-apartheid in 1996. Along with the subsequent foreign acquisitions and mergers, Iscor’s privatisation marked the beginning of the distressing journey that forced our pre-existing industrial capacity to succumb to foreign control and private profit-driven monopoly closures, now under ArcelorMittal.
The full takeover of the Saldanha Steel Mill in 2002, developed through a joint venture with a public entity, the Industrial Development Corporation, paved the way for ArcelorMittal to determine the future of our domestic steel manufacturing industrial landscape, with far-reaching implications, including the recent decision by ArcelorMittal. This privatisation failure should shame the advocates of privatisation. However, they are typically unrepentant and unlikely to acknowledge the truth in their tendency to insist on more of the same failed neo-liberal policy prescripts.
The global context in which neo-liberal forces pushed privatisation, affecting state-owned enterprises, such as Iscor, was and still is characterised by capitalist competition for dominance and monopoly. This is a characteristic feature of imperialism. Foreign-controlled multinational corporations, such as ArcelorMittal, have multiple manufacturing factories in different global regions. Others have overcapacity. As a result, they tend to neglect investment into parts of the productive capacity that they capture from privatisation, mergers and acquisitions, in favour of importing the affected products from elsewhere within their global value chains.
The repercussions for affected countries have been dire. In our national situation, they include the anti-developmental import parity pricing model that ArcelorMittal resorted to, abusing dominance, making its affected domestic steel products expensive. From this standpoint, ArcelorMittal’s “complaint” about other domestic producers who, unlike itself, did not resort to the exploitative import parity prices but instead offered the same class of products at lower costs, sounds unreasonable.
As an industrial policy instrument, export tariffs on scrap metals have the positive effect of ensuring that scrap metal, which would otherwise be exported, is made available for domestic foundries, thereby supporting associated employment. This benefits the associated products, which are made available at lower costs without the greed of import parity pricing.
However, to the extent that import duties, if any, must be raised from below the World Trade Organisation’s bound rates as part of measures to develop the domestic metal industries, this should be considered.
Issued by the South African Communist Party,
Founded in 1921 as the Communist Party of South Africa.
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