Highveld closed

A feeling of dismay and shock sank in when it was announced that Evraz Highveld Steel and Vanadium closed its doors.
This leaves some 1 753 employees without work and because of the company’s dire cash flow constraints, workers will not receive salaries or any other remuneration at this stage and they have no medical cover.
Although the reality of the steel company’s financial crisis stared everyone in the face, there was still a glimmer of hope that somehow the company would pull through.

The final nail in Highveld’s coffin was the lapse of the Training Layoff Scheme (TLS).
Every straw was held onto when Highveld was forced to stop production on July 20 last year. Several meetings with the Commission for Conciliation, and Mediation, National Union of Metalworkers of South Africa and Solidarity followed and it was decided to enter into the TLS as an alternative to avoid the proposed retrenchments.
Through this agreement, 600 staff has been placed on TLS for six months from November 26 rather than being retrenched.


Under the TLS employees had an opportunity to improve their skills whilst also receiving a percentage of their salaries. This was to be funded by the Unemployment Insurance Fund/MerSeta and National Skills Fund.
But this plan also did not see the light as the Department of Labour has decided to stop the payments of the TLS in response to the announcement that the Chinese International Resources Limited transaction has failed. The transaction collapsed after the conditions precedent were either not fulfilled or waived by the January 31 deadline.

“We are obviously disappointed with this development as we still believe that with the support of the Training Layoff Scheme as well as relatively modest funding, part of the company can be saved. However, these developments have significantly reduced our optionality,” Highveld Chief Executive Officer Mr Johan Burger said.

“The company had placed workers on a training layoff scheme and paid for their training in hopes that the UIF would refund the money spent and the company would then continue to operate,” said Solidarity Deputy General Secretary for the Metal Industry, Mr Marius Croucamp.

Croucamp said there are several irregularities in the behaviour of the Department of Labour with regard to Highveld Steel and the crisis in which the company finds itself.
He said the business rescue practitioners is now winding down and looking into the possibility of selling their assets to pay off debts and salaries.

Croucamp said that in order to allay the impact of the retrenchment process on its members, Solidarity will look after its members’ interests during consultations with the company.

“Among others things, we shall, in collaboration with Solidarity Helping Hand, supply food parcels to members and their families. In addition, we’ll continue to put pressure on the government to acknowledge its role in the crisis, as well as its responsibility towards the company and its workers.”

This sad news rocked eMalahleni to its core and it could be the end of Highveld’s rich history.
The company’ first entry on its timeline starts with excitement back in 1957 when Highveld was founded when Minerals Engineering of Colorado built a plant in eMalahleni to produce 1.4 million kilograms vanadium pentoxide a year.
Between the pages people built their dreams, and aspirations. Highveld was a beacon in the City of Coal and it became one of 15 largest steel producers in the world.

Its downfall was the cheaper Chinese imports, demand that plunged, a very high overhead cost base and inefficient structure in the company, poor levels of efficiency and productivity and constrained cash flow amongst others.
In a letter to its employees the company stated that the Business Rescue Practitioners will continue to explore the possible sale of all of the business or any part thereof as a going concern.

“If, at any stage during the consultation process an offer is made to purchase the business or any part thereof, as a going concern, serious consideration will be given to such offer. It is proposed that if the company continues with or enters into serious negotiations with any prospective purchaser in respect of the business or any part thereof, the proposed retrenchments in respect of the employees employed in respect of the business or the part of the business which is potentially to be sold will be suspended, pending the outcome of those negotiations,” is a glimmer of hope that Highveld offers.

Solidarity is calling on residents of eMalahleni to open their hearts.

“Solidarity and the Helping Hand branch of eMalahleni will be hosting a charity initiative on Friday, February 19 whereby families affected by the sudden closure of Highveld will be supplied with food,” said Ms Chris-Mari Hill of Solidarity’s Helping Hand project.

You can make a difference by donating fruit, vegetables or any other food.

Contact Hill for more information on this project: 072 180 2175 or 082 829 2546.

Another entity ‘Witbank in Nood’ has also come on board and is offering help to people affected by this disaster.

Ms Mara Cronje from ‘Witbank in Nood’ said they will appreciate everyone willing to help alleviate the need.

“There are so many households that are now facing an unknown future. People are going to loose their homes, their vehicles, schools are going to feel the impact as there is just no money to pay school fees. Please help,” Cronje pleaded.

If you want to contribute towards ‘Witbank in Nood’ contact Cronje: 082 840 5796 or Magda Schoeman 082 451 2148.

Zita Goldswain
Assistant Editor

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