Johannesburg - Data released by the Chamber of Mines this week suggests that, in the gold sector alone, employment could drop by 43 percent over the next ten years, halving gold mining sector employment to 68 000, if existing negative trends continue.
That’s on top of 35 000 retrenchments which have already taken place in the mining sector as a whole since 2012. And in the platinum industry, while no confirmed numbers are available, companies are threatening to retrench thousands of workers, and unions and business may have to make tough choices and even concessions to avoid further loss of jobs.
The current climate comes as metal commodity prices have slid over the last three years at least, caused largely by declining demand from China.
The Chamber of Mines’ head of economics Monique Mathys says the industry’s been hard hit by strike action and electricity cuts, which had increased cost inflation and led to production slowing down.
Further, the commodity price wouldn’t see a recovery any time soon, she said. “There will be unhappiness over job losses, but the companies share this (sentiment).”
Currently, 31 percent of companies in the gold industry and 45 percent of platinum companies, are loss making. As a result, at least three companies across the mining industry are engaged in consultations around retrenching. “Companies have cut back capital expenditure and there have been cutbacks at head office all round. Financial reports for the years show a slow bleed and not a once-off crisis.”
At the end of 2014, 495 000 people were employed in the mining industry as a whole, including 189 000 people in platinum and 119 000 in gold.
The trade union Solidarity earlier this month said it suspected the lay-offs were aimed at suppressing unions ahead of the gold sector salary negotiations.
Despite this, the Association of Mineworkers and Construction Union (Amcu) has forged ahead with its demands of R12 500 entry-level pay, while the NUM is understood to want R10 500 entry-level pay. Amcu also wants increases of R6 500 and R7 000 for artisans and officials in categories B1 to B7 respectively.
But the Federation of Unions of SA (Fedusa) and United Association of SA (UASA) have called these unrealistic wage demands that could destroy thousands of jobs and discourage investment.
“Fedusa supports the call of the Deputy Minister of Labour, Phate kile Holomisa, that unions should put the interest of workers upfront during these negotiations, and place decent work security at the centre of the campaign,” it said recently.
“Trade union leaders should prepare their members… (with regard to) the economic realities of the gold mining sector… such as the financial performance of the companies involved, productivity, and the impact wage demands would have on worker security,” Fedusa president, Koos Bezuidenhout, said.
Last month the NUM national executive committee came out criticising government, saying it lacked “political decisiveness” in holding the mining companies that hadn’t complied with the mining charter accountable. It demanded the Department of Mineral Resources hold companies to account by withdrawing their mining licences if they did not comply with their own projected targets.
This came as it emerged earlier this month that only 6 percent of mining companies had achieved and complied with the charter, which is aimed at achieving transformation of – among others – ownership, employment equity, housing and living conditions, sustainability and growth and beneficiation.
For example, the Department of Minerals’ report revealed that only 45 percent of mining companies had complied with the conversion of hostels into single and family units.
Some 64 percent of companies failed to comply with mine-community development targets, the report showed. But there is hope yet.
Mining consultant, Peter Major, said this year’s wage negotiations could be the most realistic in 12 years, given that unions had previously been more greatly appeased when commodity prices were higher. “Increasing productivity is the only way to reverse (the downward slide of the industry).
“You need to get the unions on the side with the mines, saying we’re all on the same side,” he said.
Labour Bureau