Johannesburg - Further job cuts in South Africa’s mining industry are on the cards, especially in the iron ore sector, given a prediction by the World Bank that the price of iron ore will be the biggest loser among metals this year.
Solidarity’s deputy general secretary for energy, Deon Reyneke, said yesterday that local iron ore mine producers were facing retrenchments.
In the latest development, three Northern Cape mining companies, all based in Kathu, announced that they were seeking to restructure and cut jobs, according to the union.
Aveng’s Moolmans, as well as Kumba Iron Ore’s Tau iron ore mine and Assmang’s Khumani iron ore mine, had all this week notified trade unions of planned restructuring, the union added.
“The restructuring is expected to affect around 600 employees at Aveng’s Moolmans, 175 workers at Tau and 250 workers at the Khumani mine,” Solidarity said.
Reyneke said the trade union was concerned about the wave of retrenchments that had hit the Northern Cape.
“Northern Cape mines are under tremendous pressure and those three mines are not the only ones facing possible retrenchments,” he added.
“The retrenchments will have a tremendous impact on the socio-economic well-being of employees in the Northern Cape,” Reyneke said.
Various mining companies in South Africa, including Kumba, South Africa’s biggest iron ore producer, and Assore are in dire straits. Kumba had lost 1.47 percent in its share value to reach R32.17 at the JSE close yesterday, which valued the company at R10.36 billion. Kumba has lost 85 percent of its value over the past year.
Assore rose 1.06 percent yesterday to close at R85.90, which valued the company at R11.99bn. The company has lost 51 percent of its value over the past year.
At the same time, the World Bank is estimating that iron ore would post the biggest loser among metals this year as low-cost supply continued to outstrip consumption.
25% drop predicted
In its quarterly outlook, the bank said on Tuesday that iron ore demand was nearing its peak and prices would drop by 25 percent to average $42 (R693) a ton this year from $55.80 last year.
Iron ore had collapsed to less than a quarter of its 2011 peak as the slowdown in China restricts demand from the biggest user, spurring a glut.
The global market was set to see a further jump in supply, with the largest miners, including Brazil’s Vale, Rio Tinto Group and BHP Billiton in Australia, increasing output to build market share.
In other developments, Solidarity is in restructuring consultations with Lonmin, the world’s third-biggest platinum producer.
The consultation process with South32 has been completed.
The union was also scheduled to meet with diversified mining house Exxaro Resources later this month.
BUSINESS REPORT