A tale from the industrial heartlands of Northern France. A giant global steel firm is closing down one of the plants that form the still beating heart of this historic iron and steel producing area. This could indeed be a loyal workforce being sacrificed on the altar of corporate capital and its profits. Or it could be a story of the effects of technological change:
In a valley lashed by wind and rain in the industrial heartland of north-east France, steelworkers blockading the local foundry see their action as a last stand to save their jobs, their factory, their region's economy – even the entire French steel industry.
As thunderstorms raged in the area this week, the symbolism was potent: the picket-line bonfire hissed and went out. The tent where protesters had taken refuge from the elements ditched its concrete anchors and threatened to blow away. "Let go of nothing," someone shouted as men grabbed tent poles. The others laughed.
There is little humour to be had these days outside the ArcelorMittal steelworks in Florange, where the "temporary" closure of two blast furnaces was declared permanent on Monday, with the loss of 629 jobs. Bitter jokes and anger are directed at the Indian-born, British-based Lakshmi Mittal, owner of the world's largest steelmaking company. "That man is a predator," said Edouard Martin, head of the CFDT union at Florange where he has worked for 32 years. "He's not an industrialist, he's a financier."
OK, it's a report from The Guardian so you can imagine how the rest of it goes. But there's one little point buried in there which makes it a rather more complex story.
In the Vallée de la Fensch in the Moselle, whose rich iron-ore fields once made it the jewel of France's industrial crown, and where – for this reason – the earth is soaked with German and French blood spilled in conflicts over the last 140 years, Florange is the last steelworks standing. It's an industrial crisis that has echoes of the privatisations and plant closures that all but wiped out British steelmaking and coalmining in the 1980s and 90s. Unemployment in this area of France is already above the 10% national average, and the Florange plant, which supplies the car industry, has been hit by a fall in demand for new cars.
OK, it makes auto steel. This is important.
Mittal is not shutting the entire site, but the so-called "hot line", the blast furnaces, where the iron ore is melted to produce steel, and the neighbouring coke plant.
And it's not in fact closing the steel production plant at all. It's closing the blast furnaces and associated equipment (if you're not running a blast furnace you don't need a coking plant).
If you take a long view you can look at then production of certain metals as having something akin to the environmental Kuznets Curve. Or if you prefer, we move over the decades (perhaps centuries) from an industry operating on a flow basis to one operating on a stock basis. This latter being something that the Greens and the hippies have been arguing we should be doing for decades now. It's expressly pointed out in Blueprint for Survival, forming part of Limits to Growth and it's an important part of the steady state economics promulgated by Herman Daly. Pretty much a centrepiece of green economics in fact.
As you're building an industrialised society you need to be producing vast quantities of new (or as the industry calls it, "virgin") iron and steel. This means running iron ore through a blast furnace along with limestone and coke. That's just how you make it all. But there comes a point where you're no longer building such a society: you're actually recycling one. Take the example of cars: as you move from no cars per person to one car per head of population obviously the total stock of iron/steel that the country is using is rising. You need to keep making virgin material to provide it. However, if you get to a point where car ownership per head is no longer rising, plus you've got a reasonably static population, then you don't need to be making virgin material. For you can melt down the cars you made 10 years ago as they are scrapped to make the new cars you want this year.
Obviously, it doesn't quite exactly work like this: you'll never be entirely in balance. There are also losses to weathering, no recycling process is 100% efficient and so on. But we do end up moving from a society which needs ever larger inputs of virgin iron and steel to one that provides some to much to near all of its desired usage from recycling old iron and steel.
Which brings us to two technical points (there was always going to be some metals geekery in this post, wasn't there?). The first being that you don't process scrap iron and steel through a blast furnace: you use an electric arc furnace for that. The second is that automotive steel is the most difficult of steels to make from scrap. Indeed, it was only recently cracked by Nucor, an American company. Recently, in the steel business, means in the last couple of decades by the way.
Which means that we would expect, over time, the blast furnace part of the iron and steel industry to gradually close down. While we might remain an iron and steel based society we just need less of what a blast furnace produces, virgin material, and we supply more of our needs through recycling. Further, we'd expect the last part of the blast furnace industry to face problems to be those making automotive steel. Which is exactly what is happening.
Yes, there are other things going on in the steel industry. This isn't all of the story by any means. But it is at least part of the story and an important part of it. The big US integrated producers, the Bethlehem Steels, the US Steels, have faced exactly the same problem in recent decades. There was some influence from imports, some from dumping even, but a goodly part of the story was that very development of better steels from recycled materials by Nucor and the like. It's a standard assumption in the industry that no one will ever build a new blast furnace in the advanced economies.
Or, if you like, we really are moving from a flow economy to a stock one. Instead of digging up more of Gaia each year we are recycling what we have. This doesn't apply to China and India and such rapidly developing places as yet but it does to some, even a large, extent in the advanced economies. It really is cheaper and better to recycle than to make anew. Thus the reason these blast furnaces are closing is because not only were the hippies right, they're winning. And rightly so for they were and are correct on this point.
