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Zuma tries mediation to stem job losses

President Jacob Zuma. Picture: Jacoline Schoonees, Department of International Relations

President Jacob Zuma. Picture: Jacoline Schoonees, Department of International Relations

Published Sep 9, 2015


Johannesburg - President Jacob Zuma yesterday met mining houses and organised labour to limit plans to shed thousands of jobs. However, analysts cast doubt on the impact of the meeting on limiting retrenchments, given the sector’s substantial challenges.

The meeting in Pretoria follows Zuma’s recent warning to companies chasing profits and labour seeking higher wage increases to tighten their belts to save jobs as the economy was “sick” when he launched the first unit of Eskom’s Medupi power station a week ago.

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Earlier this month, Mineral Resources Minister Ngoako Ramatlhodi got trade unions and mining houses to commit to limiting job losses.

“There is a lot of cosmetic action going on, and the end point is the same… I am not sure that the meeting changes anything as the fundamentals of jobs losses will remain,” Peter Montalto, an economist at Nomura International based in London, said yesterday.

The ailing mining industry accounts for 7 percent of the country’s gross domestic product and about 12 000 jobs are at risk as mining houses, including Lonmin, the world’s third largest platinum producer and global diversified mining company Anglo American plan to cut jobs.

Peter Major, a mining consultant at Cadiz Corporate Solutions, said politicians had no chance of turning things around by having one-on-one meetings with the mining bosses.

He said the meeting would potentially slow down retrenchments and mine closures.

However, the meeting would not get to the bottom of the challenges facing the sector, including debt, load shedding and labour unrest.


“The mining companies are all too damaged, too sick, too dysfunctional – for just a couple of high level meetings to fix – let alone turn around,” Major said yesterday.

Zuma’s intervention comes as Anglo American Platinum (Amplats), the world’s largest platinum producer and South Africa’s largest gold producer, Sibanye Gold, are scheduled to announce a deal in which Sibanye will acquire Amplats’ assets, after talks that begun a year ago.

Sibanye is buying Amplats’s troubled Rustenburg mines after recently agreeing to a $350 million (about R5 billion) three-year debt facility with banks which allows it to borrow money should it need it.

“We will be providing an update on the sale of the Rustenburg assets to the market tomorrow morning,” Pranill Ramchander, a spokesman for Anglo American, which owns 77 percent of the world’s largest platinum producer, said yesterday.

James Wellsted, a spokesman for Sibanye, confirmed the timing of the announcement, but declined to provide any details on the transaction.

Zuma said 463 orders of non-compliance had been issued in line with the mining charter, which includes transferring 26 percent of mines into black hands by last year, while a total of 204 orders had been issued in respect of non-compliance with environmental management plans.


“You have to save the mines, you have to save the jobs,” Ramatlhodi said.”It’s a balancing act. Difficult, though.”

The gloom in the global economy has posed a challenge for the South Africa’s economy, which is a net exporter of key mineral commodities, the Presidency said in a statement yesterday.

“It is our collective responsibility to resolve the challenges as the mining sector is strategic to the South African economy,” it said in the statement.

The Association of Mineworkers and Construction Union (Amcu), the biggest union in the platinum sector did not to commit to saving jobs, signed last month.

“A stable economy for the investors to invest more in the country, that’s what we hope for,” Joseph Mathunjwa, the president of Amcu, said.

Meanwhile, Amplats said its operations were disrupted at its largest and most profitable mine as communities in Ga-Mapela in Limpopo demand employment and the provision of infrastructure from the company.


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