Fear mounts as min­ing sec­tor suf­fers

Lesotho Times - - Jobs & Tenders -

JOHANNESBURG — As min­ing com­pa­nies in re­source-rich Africa bleed jobs due to plung­ing com­mod­ity prices, the rip­ple ef­fect of re­dun­dan­cies has raised con­cern about so­cial un­rest amid de­clin­ing eco­nomic growth.

Top min­eral-pro­duc­ing coun­tries like South Africa, Zam­bia and the Demo­cratic Re­pub­lic of Congo have seen cash-squeezed com­pa­nies slash work­forces, shut oper­a­tions and re­duce ca­pac­ity.

In South Africa, where min­ing has long been a crit­i­cal source of jobs, unions say 19 000 jobs are on the line.

Most of the coun­try’s cur­rent min­ing lay­offs are in the plat­inum sec­tor, which has seen a price drop of about 40 per­cent since 2011, while the gold sec­tor has also been badly hit.

“We are in cri­sis. Com­pa­nies can’t just let go of so many peo­ple,” said Joseph Mathun­jwa, the leader of the As­so­ci­a­tion of Minework­ers and Con­struc­tion Union (Amcu).

Amcu led the five-month strike over higher wages at Lon­min in Marikana in 2012, which be­came a bloody sym­bol of the price of in­dus­trial un­rest.

Thirty-four min­ers were killed at the plat­inum mine when po­lice opened fire dur­ing a vi­o­lent wild­cat strike, in a tragedy that badly shook South Africa’s post-apartheid con­sen­sus.

Zam­bia and the DRC have also suf­fered from a sharp de­cline in in­ter­na­tional cop­per prices, which have slumped by 25 per­cent dur­ing the first eight months of 2015, com­pared to the av­er­age price in 2014.

“The con­tract­ing me­tal prices, es­pe­cially cop­per and plat­inum, will con­tinue to pres­sure com­pa­nies to cut their costs,” said An­drius Bal­sys, in­dus­try an­a­lyst at Euromon­i­tor In­ter­na­tional.

Bal­sys said in ad­di­tion to job cuts, com­pa­nies were “ex­pected to re-eval­u­ate ex­pan­sion projects more care­fully” and may halt those in the pipeline.

Switzer­land-based Glen­core this month sus­pended pro­duc­tion at cop­per mines in Zam­bia and the DRC, as the com­pany reels from what it de­scribed as the worst com­modi­ties mar­ket since the fi­nan­cial crash of 20082009.

The Con­golese gov­ern­ment has urged Glen­core to “re­spect its com­mit­ments” to the pro­ject and re­sume pro­duc­tion.

Glen­core’s Mopani mine in Zam­bia is the largest em­ployer in the coun­try’s min­ing sec­tor, with a work­force of 10 000.

Cop­per is the big­gest for­eign cur­rency earner for Zam­bia, where the lo­cal kwacha has been in free fall.

Chi­nese-owned Luan­shya Cop­per Mines also sus­pended oper­a­tions, ren­der­ing 1 200 work­ers job­less.

“The African min­ing in­dus­try’s chal­lenges have to be seen in the global con­text of a slow­ing China and weak com­mod­ity prices,” said Sarah Boumphrey, head of strate­gic in­sight at Euromon­i­tor In­ter­na­tional.

“The dif­fi­culty in Africa is that many gov­ern­ments are over-re­liant on the sec­tor as a source of ex­port and gov­ern­ment rev­enue.”

The com­mod­ity crunch came as South Africa’s min­ing sec­tor was suf­fer­ing from pro- longed strikes, es­ca­lat­ing wage de­mands and reg­u­lar elec­tric­ity cuts that many com­pa­nies blamed for poor prof­its.

The in­dus­try, which has its roots in colo­nial times, re­lies on mi­grant labour from neigh­bours like Mozam­bique, Malawi, Le­sotho and Swaziland - mak­ing the im­pact of re­dun­dan­cies a re­gional prob­lem.

South African Pres­i­dent Ja­cob Zuma’s gov­ern­ment has tried to step in, bring­ing to- gether mine bosses and unions to find ways to avert job losses, in a coun­try with a 25 per­cent job­less rate.

“It is our col­lec­tive re­spon­si­bil­ity to re­solve the chal­lenges as the min­ing sec­tor is strate­gic to the South African econ­omy,” Zuma told a meet­ing be­tween unions, com­pa­nies and the gov­ern­ment this week.

The par­ties have signed a pact which calls for al­ter­na­tive jobs for re­dun­dant work­ers and for the selling of trou­bled mines, as op­posed to aban­don­ing oper­a­tions.

But the hard-line Amcu has re­fused to sign up with any gov­ern­ment-led deal.

Johannesburg-based labour min­ing an­a­lyst Mamokgethi Molopy­ane told AFP that the tur­moil in the sec­tor could not have come at a worse time.

“The econ­omy is ail­ing, un­em­ploy­ment is high, with in­creas­ing food prices,” she said.

“The mas­sive job losses are cer­tainly go­ing to deepen poverty lev­els and have a rip­ple ef­fect.”

The col­lapse of min­ing em­ploy­ment is not new - South African Cham­ber of Mines data emerged in May re­veal­ing 35 000 job losses in the gold, plat­inum and iron ore sec­tors be­tween 2012 and last year.

Fur­ther mass un­em­ploy­ment from the mines would pose a fresh headache for many African na­tions.

The so­cial risk was high­lighted ear­lier this year in South Africa in a re­newed bout of deadly xeno­pho­bic at­tacks by lo­cals tar­get­ing mi­grants in un­rest driven in part by lack of jobs. — AFP

Amcu pres­i­dent Joseph mathun­jwa

Newspapers in English

Newspapers from Lesotho

© PressReader. All rights reserved.