Maybe I have lived in SA too long because from where I am sitting a lot of the economic pain is self inflicted and could even be being done on purpose. For the SA Government to take over the steel production is SA would be a big win for themselves and this surely has been their end game. This is not about the country and all about themselves and how much more they can loot by having more industries under their control.
Today one of the large labour groups in South Africa called for the ArcelorMittal steel mill to be nationalized. This facility used to belong to the Apartheids government Iscor many years ago so this used to be an SOE company. Somehow somewhere along the line Iscor was sold off to Arcelor Mittal and now they are asking this to do a full circle.
The problem the government is now facing is the job losses with the steel mill shutting down. The 3500 direct jobs is one thing and there are another estimated 100 000 indirect jobs tied to the steel industry. The government has known about this for over 12 months and have not taken this seriously and with the introduction of the US tariffs things have deteriorated rapidly.
The government is not protecting local manufacturers from cheap imports which flood the local markets and this is being done on purpose. This is how the Chinese destroy local manufacturing removing all their competitors one by one. This would be a quick fix as one could add a 50% duty on these cheaper imports making them too expensive to compete. This would save the steel production and all the jobs associated in this industry.
The problem of nationalizing the steel mill is the costs and the inevitable corruption that follows. The government is better off protecting these industries through tariffs and other controls which in the long term will not cost the tax payer any money. The International Trade Administration Commission of South Africa (ITAC) released a report stating that the steel industry was directly affected by the Chinese dumping steel in South Africa and nothing has been done about this. Someone high up is protecting the Chinese and is being well paid for their support whilst harming the local economy. I say this because it is that obvious to anyone with a brain what is going on and we have seen this same plan happening with the auto industry.
The 100 000 jobs would be a massive hit to the economy and no doubt to the government losing voters in the process. Was the initial plan to see ArcelorMittal shut down and then the Government picks up the pieces for nothing afterwards?
I just find it a coincidence that last month Goodyear tires closed down and the government asked if they would be donated the facility. Goodyear refused to hand over the facility which is the correct answer. If the government had done their job and protected the workers by introducing tariffs then Goodyear would still be operational.
This reminds me of the begging mentality in Africa which I hate so much and you do question if this has all been done on purpose to steal these companies away for themselves. Why wait until the last minute when these facilities are closing down before raining this topic of nationalization. This surely is to either claim the facility for free or at a knock down bargain price.
One has to be sinical when understanding the government as the only other reasoning is to screw the investors owners over so they shut down and then the government swoops in at the last minute saving jobs. Not only are they creating another SOE, but also winning votes which is still crooked. This maybe giving them too much credit as I do not think they are that smart and this is all about lining their pockets somehow. We shall see what happens as owning the largest steel mill in SA would be a proper steal.