Zuma aware of country’s mining crisis

Did not know of minister’s licence suspension

PRESIDENT Jacob Zuma yesterday acknowledged that South Africa’s mining industry was facing a crisis, but gave no hint on how the administration intended to stabilise the industry.

The mining companies have announced a wave of job cuts in recent weeks following the rapid decline of commodity prices including coal, iron ore, gold and platinum.

Zuma said he had no idea that the Minister of Mineral Resources, Ngoako Ramatlhodi, on Tuesday suspended Optimum Coal’s operation licence in Mpumalanga, a unit of global diversified miner Glencore, for the way in which it was retrenching employees.

“The minister has not reported this to me. I am not aware of this decision. I cannot answer this question because I don’t have the report,” Zuma said in Parliament.

Ramatlhodi suspended Optimum Coal’s licence for failing to follow the law in its job cuts at the mine. In addition, the company had allegedly failed to live up to its social and labour plan commitments.

Trouble

He said earlier that commodities were indeed in trouble and that there were discussions within the Brics countries.

The government has responded with strong-arm tactics on job cuts, while Sibanye Gold chief executive, Neal Froneman, called for an end to political rhetoric.

“We are tired of political comment instead of concrete actions and it is really very sad… the sooner government understands the economic realities of running a business, the sooner they’ll do the right thing,” Froneman said in Johannesburg yesterday.

Froneman’s words add to those of Mark Cutifani, the chief executive at Anglo American, who last week said that “the industry would take necessary action to survive”.

Peter Attard Montalto, an executive director and senior emerging markets economist and strategist at London-based Nomura, said mining problems were here to stay as long as the government thought it could stand in the way and stop the inevitable consequences of the wider environment it had built around mining.

“As long as unions think they can ignore economic reality and as long as companies remain fearful of action by both sides the next leg will be divestment that takes the form of the state championing a local black controlled and managed mining company from the divested assets of the majors,” Montalto

The minister has not reported this to me. I am not aware of this decision. I cannot answer this question.