Africa’s largest steel producer Mittal Steel SA will cut 800 jobs through voluntary severance packages by the end of 2006, CEO Davinder Chugh said on Thursday.
Of these 800 jobs cuts, about 350 will be at the company’s largest plant at Vanderbijlpark. The job cuts are worth about R159-million a year.
The Congress of South African Trade Unions (Cosatu) said on Thursday it was outraged at Mittal’s plan.
“This is a cruel blow to workers and their families, who face a bleak future of poverty and a struggle to survive,” the union federation said.
It added: “The announcement illustrates perfectly why Cosatu [Congress of South African Trade Unions] needs to continue and intensify its jobs and poverty campaign. At a time when the whole country should be uniting to save and create jobs, we see the world’s biggest steel producer ruining the lives of 800 families just to save R160-million per year. To Mittal this is a drop in the ocean but to the retrenched workers the loss will be huge.
“Cosatu demands the immediate reversal of the decision and, failing that, the federation pledges its full support for any action its affiliate Numsa [National Union of Mineworkers of South Africa] decides to take to save their members’ jobs and livelihoods. This issue will also be included in the submission to Nedlac under Section 77 of the LRA [Labour Relations Act] to facilitate discussion and future action on jobs and poverty.”
Meanwhile, Mittal said it would incur R1-billion extra in costs as a result of the 120% rise in coking coal prices for the year-end June 2006, Chugh said on Thursday.
However, with effect from July 1 2006, coking coal prices will decrease by 8%.
In the first quarter of 2006, Mittal Steel SA’s costs rose 10%.
Chugh said that the company was facing severe cost pressures due to the current commodity price up-trend. ‒ I-Net Bridge