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South Africa’s mining sector faces a “perfect storm” that poses a massive challenge to emergency talks by trade unions, the department of mineral resources and the Chamber of Mines, according to the chamber’s CEO, Roger Baxter.
The discussions, aimed at saving most of the 15 000 jobs in the mining sector, began this week as government suspended Glencore Optimum Coal’s mining licence for “inhumanely” retrenching 630 workers, a decision the state reversed on Friday.
Mineral Resources Minister Ngoako Ramatlhodi convened the meeting and established a technical team comprising his director-general, Thibedi Ramontja; Joseph Mathunjwa from the Association of Mineworkers and Construction Union (Amcu); Franz Stehring from the United Association of SA; Sipho Dube from the SA Mining Development Association; Luthando Brukwe from the National Union of Mineworkers; Gideon du Plessis from Solidarity; and Baxter.
All the participants except Amcu, which said it did not have confidence in government’s intervention, have welcomed the initiative to save jobs, while some mining bosses tore into the state’s regulatory uncertainties.
These included comments by Sibanye Gold CEO Neal Froneman at his company’s interim results presentation this week, where he said mining bosses were uncertain about government’s regulatory policies and continued to disagree with the state about the ownership clause in the Mining Charter.
Ramatlhodi’s special adviser, Advocate Mahlodi Muofhe, said the team would work on possible solutions that would be presented to all stakeholders to curb job cuts by the end of the week.
Muofhe said that one of the interventions being considered was the introduction of a jobs fund to reskill mine workers or use the Mining Qualifications Authority, a state entity, to train workers to find other jobs once they had been retrenched.
“The mere fact that the minister convened the meeting emphasises how devastating it is to think of the possibility of losing almost 15 000 jobs – the majority of those people support up to 10 people each,” said Muofhe.
The metals sector is also facing a continuing jobs blood bath, with Scaw Metals Group announcing its intention this week to cut as many as 1 000 jobs.
Eskom’s irregular power supply to mining companies was a crucial issue raised at the meeting, with stakeholders resolving to engage with the power utility about solutions to sustain supply as mining companies, such as Kuyasa Mining, plan to invest billions of rands to build their own power plants.
Speaking on the sidelines of the talks, Baxter pointed to weak commodity prices across the globe, spiralling wage costs and production declines in the gold sector, and a 33% decrease in employment in the gold sector alone.
“The mining industry is supportive of collaboration between all stakeholders, ensuring that the mining industry continues to play a fundamental wealth-creation role in South Africa.
“Government is a key stakeholder and has a role to play in maintaining the health of the industry. It is government’s role to ensure that companies adhere to the law. But it is equally important that government creates an environment that is conducive to successful mining operations,” said Baxter, echoing Froneman’s take on uncertainties regarding regulatory framework.
Decisions by mining companies to cut jobs were never easy, said Baxter.
“Any decision to reduce jobs is not taken lightly. Before companies do so, they reduce numbers through natural attrition, early retirements and voluntary severance packages. Involuntary retrenchments are a last resort,” he said.
“That said, it should also be recognised that mines have finite lives and that, at some stage, all operations must close.”
