EVRAZ Highveld stops steel production

EVRAZ Highveld Steel confirmed on Monday that it has temporarily halted steel production at its steel mills in Mpumalanga Province, South Africa (SA). The decision was made in order to cut costs in the face of weakening domestic demand for steel products, mainly due to a significant increase in Chinese imports. "Many companies are feeling the impact of China's economic policy and feel that some of the BRICS countries are benefiting from SA," said SA's National Union of Metallurgists.

An EVRAZ spokesman said: "We have informed our employees that we are ready to resume production, provided adequate funding and improved trading conditions for steel are provided to ensure sustainable financial viability in the future." EVRAZ Highveld, the second largest steel producer SA, which is 85.11 percent owned by EVRAZ PLC, employs about 2,500 people. The company filed a business rescue application back in April, saying it did not have enough funds to meet its short-term obligations. She referred to sustained financial losses and weak market conditions. Since April, the company has continued to produce steel, looking for buyers.

Unions said EVRAZ Highveld will scale down its operations, possibly with temporary or permanent layoffs, but they would like to be able to quickly restart operations once new owners are found or the business environment improves. Another meeting will take place this week with more detailed proposals. The unions believe that the company is not in danger of liquidation. They are considering long-term options for survival, such as import tariffs.

The Office has been in discussions with the Department of Trade and Industry and the Industrial Development Corporation (IDC) to find a solution. IDC has already provided funding to help save the business. IDC's money is being used to pay off debt that EVRAZ Highveld has accumulated over the past two years after making the sale decision, which has raised questions from unions.

Stephen Nhlapo, organizer of SA's National Union of Metallurgists, said 1,700 people would be sent on unpaid leave for two months. Trade unions are vehemently opposed to this, claiming that without pay, workers will not be able to exist. If they were downsized, then they could at least receive unemployment benefits, insurance loans and their reserve funds.