Trade union Solidarity on Tuesday said it had received a retrenchment notice from South32’s Hillside aluminium smelter, in Richards Bay.

The trade union stated that the retrenchment process could impact the lives of up to 30 000 people and, consequently, the entire Richards Bay area.

Solidarity deputy general secretary Marius Croucamp commented that the notice fed growing concern about the South African steel sector, which shed around 8 000 jobs in 2018.

“Although the initial notice makes no mention of the number of employees who are potentially facing retrenchment at [the smelter], the company indicated in its request to the Commission for Conciliation, Mediation and Arbitration (CCMA) that it intends to . . . cut its workforce by 500 jobs,” Croucamp stated.

A South32 spokesperson told Creamer Media that, “the company has informed employees at its Hillside smelter that it intends to commence consultation with them in accordance with Section 189 of the Labour Relations Act.

The consultation is related to a proposed restructure of the business, which is aimed at reducing Hillside’s costs and improving resilience to volatility in commodities markets.”

In its financial results, released last week, South32 reported that Hillside’s underlying earnings before interest and tax decreased by 133%, or $159-million, in the first half of the 2019 financial year.

Hillside experienced a loss of $39-million with stronger sales volumes offset by higher raw material input costs, an increase in pot relining costs and an “unfavourable” movement in inventory. 

Croucamp noted that South32’s intended restructuring process was “highly complex,” as it involved simultaneous retrenchments, reorganisation and salary adjustments.

He noted that the company intends to achieve three goals through one process, which he believes is “a difficult task.”

The South32 spokesperson could not corroborate Solidarity’s intimation that 500 jobs would be affected, as the consultation process has yet to start.

Croucamp explained that more information would become available once the CCMA appoints a commissioner as facilitator and the consultation process is initiated.