Retrenchments loom for thousands at Glencore and ArcelorMittal
Glencore said that a retrenchment process has been initiated at its joint-venture Rustenburg ferrochrome smelter and vanadium operations in South Africa as significant economic pressures continue to impact the businesses. While a union hints at bigger job losses than initially expected at ArcelorMittal.
Image credit: Glencore
South Africa holds approximately 80% of the world's known chrome ore reserves, according to Glencore, positioning the country as a key player in global ferrochrome production.
However, problems with power cuts, rising electricity prices and economic pressures forced the miners to suspend production at the venture's ferrochrome Boshoek, Wonderkop and Lion smelters in May.
The smelters are operated by the Glencore and Merafe Resources joint venture.
"The (retrenchment) consultation process is as a result of the continuing economic pressures facing the South African ferrochrome industry and the lack of sustainable industry solutions that could alleviate the pressures in the near to medium term," Merafe said in a separate statement.
The process will affect the Boshoek and Wonderkop smelters in Rustenburg. In addition, the Lion smelter is currently being evaluated and may potentially see a reduction to half of its operating capacity, Glencore said in a statement.
The London-listed miner also said its Rhovan vanadium operations in the North West province and its carbon division in Emalahleni will also be affected.
As part of this process, Glencore will also proceed with further streamlining and restructuring of support functions within the mining division at Rustenburg and Lydenburg smelters, head office and shared services functions, as anticipated, it added.
"It is important to note that the process is not a forgone conclusion. A notice has been sent to all recognised unions, affected employees and other stakeholders," Glencore said without saying how many jobs are affected.
Willie Venter, deputy general secretary of the Solidarity union, said Glencore has already been hit hard with 10 of its 22 furnaces permanently or temporarily closed. He warned that if the remaining furnaces are also forced to shut down, some 2,425 direct jobs and more than 17,000 indirect jobs will be affected.
ArcelorMittal's job cuts
Meanwhile, at ArcelorMittal South Africa (AMSA), Solidarity stated that the steelmaker plans to lay off 4,000 workers, nearly half its workforce, and more than initially expected, with cuts now set to extend to its main Vanderbijlpark plant.
The steelmaker previously announced plans to shut its long steel plants at Newcastle and Vereeniging this month, resulting in the loss of 3,500 jobs, as talks with the government have failed to provide an alternative solution.
AMSA said it was "limited in what we can say in the public domain given the complexities of the matters under discussion and a cautionary announcement we issued recently", adding that "certain processes are still ongoing."
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The company produces some 2.4 million metric tonnes of steel annually, about 4% of group output.
The Solidarity union said AMSA had told employees that it was preparing "mass retrenchments involving more than 4,000 jobs".
Its statement said the cuts had been expanded to include Vanderbijlpark - AMSA's flagship operation, making flat steel.