Petroleum Africa
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Tuesday, February 9, 2016
Release
The potential closure of ArcelorMittal’s Saldanha Works steel plant is a wake-up call for South Africa. The closure will cost 1100 jobs directly, with a ripple effect on the local economy affecting 4000 jobs in total. Saldanha Bay is a key area for growth in the Western Cape with the flagship Saldanha Bay Industrial Development Zone (IDZ) project.
The DA in the Western Cape calls for national government to save the plant in the short term, by offering ArcelorMittal an electricity rebate throughout the winter months to avoid closure. The DA-led Western Cape Government will offer the Energy Security game-changer to ArcelorMittal, and is working on landing Liquefied Natural Gas to our region, in aid of energy supply.
Electricity already accounts for 33% of the input costs. In that industrial electricity rates will spike in winter months, the plant will close for this period. We cannot afford to sacrifice 4000 jobs during this shutdown.
National government must engage with ArcelorMittal on how to prevent the closure of the plant. There is a need for energy at lower cost than current Eskom prices, energy price stability and certainty. Energy tariff increases are simply not possible.
The Western Cape Government, the City of Cape Town and businesses in our region are working closely together to diversify the energy mix. This will minimise the impact of load shedding and electricity price increases on economic growth. In a major development for renewable energy, the Atlantis Special Economic Zone (SEZ) will further position the province as a green energy hub.
The key priority of our time is to create jobs. Manufacturing has an important role to play in creating these jobs and in diversifying our economy.
Instead of using the global demand to improve productivity we have a national government that is imposing further burdens on business. Now that demand has slowed down, increased costs make it difficult for business to survive.
Government must be held accountable and provide opportunities, not stumbling blocks for business to provide jobs and economic growth.
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