Government notes that Kumba Iron ore and Arcelor Mittal South Africa have announced an interim resolution to the commercial dispute between them that had escalated to threats of imminent job losses and production cuts.
This follows an exploratory meeting between the companies and the Ministers of Trade and Industry, Economic Development and Mineral Resources. The settlement occurred before the intended mediation process led by the ministers.
While government notes that the threats of retrenchment and production cuts have been withdrawn following the interim settlement, critical issues arising from the dispute remain unresolved.
Government's view is that while the unbundling of Iscor took the form of a commercial contract between two private companies, a contract that is still in dispute, it also involved public developmental obligations.
The thrust of these obligations was:
- to ensure the viability and cost-competitiveness of local steel production, and
- to ensure a comprehensive steel pricing regime to support the development and deepening of value-added manufactured products.
The terms of supply to the economy of iron ore and primary steel products, to ensure these developmental outcomes, is in the national interest. They are critical to the success of the industrial policy action plan and a shift to a new more labour absorbing growth path. Government will use all tools available to it to ensure that these outcomes are realised.
The ministers will meet in the near future with key stakeholders to assess the impact of the interim settlement on long-term developmental objectives.
They will then engage with the two companies to ensure that the settlement does not have a negative impact on the steel price in the short run and that in the long run the rents arising from South Africa's mineral resources are used to develop the economy.
Contact:
Sidwell Moloantoa Medupe
Tel: 012 394 1650
Cell: 073 522 6801
E-mail: MSMedupe@thedti.gov.za
