TRADE union Solidarity is worried about possible retrenchments at Samancor Manganese as global metals markets and SA’s steel industry roil in crisis.

 

It said Samancor Manganese had issued a section 189 notice about a major restructuring process that would soon begin at its Metalloys plant near Johannesburg. This would probably affect 500 jobs.

 

"The company cited deteriorating market conditions and the resultant operational loss as reasons for the restructuring process," Marius Croucamp, head of metal industry affairs at Solidarity, said on Tuesday.

 

"A retrenchment storm is brewing in several industries and the metal industry is currently the worst hit."

 

Samancor has invited Solidarity to participate in a consultation process regarding the restructuring. But Stephen Nhlapo, head of collective bargaining at the National Union of Metalworkers of SA, said on Tuesday a "proper notice" had not yet been issued and matters were "still at an initial stage".

 

The parties still needed to go through a consultation process. "I think it is too early to start discussion on that issue (retrenchments)," he said.

 

The Samancor Manganese notice comes after SA’s second-largest steel maker, Evraz Highveld Steel & Vanadium, entered into business rescue in April. Subsequently, SA’s largest steel producer, ArcelorMittal SA, said in July it might close parts of its specialised Vereeniging plant. The group said at the time it had already spoken to about 1,200 affected employees. Then Scaw Metals — a smaller steel maker owned by the state-mandated Industrial Development Corporation — issued in August a retrenchment notice possibly affecting 1,000 employees.

 

The Metalloys plant is one of the largest smelters in the world, producing high-carbon ferromanganese and medium-carbon ferromanganese alloy, used in stainless steel and hi-tech engineering products.

 

South32 holds a 60% interest in Samancor Holdings and Anglo American holds the remaining 40%.

 

Samancor indirectly owns 74% of Hotazel Manganese Mines in Northern Cape, which is home to 80% of known manganese ore resources.

 

South32 said on Tuesday in its capacity as manager of the Samancor Manganese joint venture that it had been decided to delay the restart of three of the four high-carbon ferromanganese furnaces at Metalloys.

 

"As announced on October 22 2015, the delay in the restart of the furnaces will continue indefinitely. A decision on the future of the fourth furnace will be made on conclusion of the review of the South African manganese business," it said.

 

South32 said the decision to delay indefinitely the restart of the furnaces followed the non-recovery of high-carbon ferromanganese alloy prices, which fell sharply in the year. The review was expected to be completed before end-December.