South Africa’s mining sector faces the double-edged sword of a shortage of technical professionals and mass retrenchments expected next year.

After the threat of nationalisation, a shortage of key skills is the biggest risk facing the mining sector for next year, according to international credit insurer Coface.

Formally trained employees in the mining sector include engineers, who make up 10 percent of the workforce, and administrative staff (15 percent to 20 percent), Coface lead analyst Saijil Singh said yesterday.

“We completely rely on foreign parties to do analysis for exploration projects. For example, geologists in South Africa are few and far between. We pay exorbitant amounts to employ expatriates,” Singh said.

Labourers make up the balance of between 70 percent and 75 percent of the workforce. They have limited skills and are at the greatest risk of retrenchments next year as mines seek to curb costs.

“Mining faces a double whammy next year. On the one hand there is a shortage of skilled staff and on the other hand mines are stating that they believe it is not profitable to have a large workforce.”

It was difficult to up-skill employees to fill the shortage of engineers, he said.

Human resources expert Sandra Burmeister, the chief executive at recruitment group Landelahni, said the industry could cope with the technical skills shortage by outsourcing expertise.

“We will see approaches including bringing in expertise from abroad, centralising or the complete outsourcing of, for example, sinking of shafts and maintenance,” she said.

The Chamber of Mines said in its annual report that the Mining Qualifications Authority’s workplace skills plan revealed a 1.6 percent shortage of skills in both the professionals occupation group and the technicians and trade workers occupational group. It planned to unpack the figures because they “are too low to be deemed a shortage of skills in these two key occupational categories”.

The chamber said it was investigating the ways of reporting shortages and the accuracy of data and the interpretation and definition of shortage of skills to determine whether there was a shortage of skills.

The mining industry, which has gone from employing 1.4 million people to 523 000 over the past 25 years, and the downward trend continues.

Declining ore grades and the need to deepen mines have contributed to the complexity of mining in the country.

Careers in mining were under pressure and people who traditionally sought careers in the mining sector were finding jobs in the financial services and telecommunications sectors instead because of the long-term mining decline, Adcorp’s Loane Sharp said yesterday.

South Africa had 829 000 unfilled positions, more than half of which were management positions, based on research done last year, he said.

“The mining sector in South Africa, which depends on scientists and engineers for management, has an acute skills shortage. The skills shortage will be exacerbated next year by difficult economic conditions for mining and heightened labour relations risk.”

Landelahni research showed in 2010 that although South Africa produced more mining engineers than all other English-speaking countries combined, it was not producing sufficient skills to replace the ageing engineering and artisan population.

Burmeister noted there was a shortage of mining technical skills locally, but it was not so profound due to instability in the economy. She said the new trend of growth in mining, oil and gas in Africa meant skills would be sourced from South Africa. “We are soon going to feel the pinch of scarce technical skills in South Africa as these technical skills are drawn to where the growth is happening,” Burmeister said.