NUM, Amcu at odds over mine retrenchments
● Two of the biggest mining unions are at odds over retrenchments in the industry after several mining companies proposed restructuring operations.
The National Union of Mineworkers (NUM) wants the government to revoke the licences of mining companies that rush to retrench workers when they are in difficulty, but the Association of Mineworkers and Construction Union (Amcu) disagrees.
NUM spokesperson Lupert Chilwane said: “The department of mineral resources & energy [DMRE] must revoke mining licences. It must make the process of retrenching workers a difficult and expensive exercise. They are custodians of South Africa’s mineral wealth; why are they so quiet, why are they not doing something to avert or at least minimise the retrenchments? They should step in as they are the regulator of the industry.”
However, Amcu general secretary Jeff Mphahlele said NUM should focus on serving its members instead of taking short cuts. He said NUM had refused to join Amcu’s court application to halt retrenchments at gold and platinum miner Sibanye-Stillwater.
“NUM is not fighting for its members. They want an easy way out. We were fighting Sibanye in court, they did not want to come to the party because we had to pay lawyers.
“Amcu does not support retrenchments. [But] even if the DMRE intervenes, they will not call out the mine bosses,” Mphahlele said.
Some mining houses have proposed restructuring shafts in response to the impact of power outages, rail and port weaknesses, and lower metal prices, all of which are compounding economic woes and hurting bottom lines.
Wesizwe Platinum is the latest miner to announce it will enter into section 189 consultations at one of its mines, Bakubung, to
Cost pressures such as the increase in electricity prices and labour costs have undermined the sector
Hugo Pienaar
Minerals Council South Africa chief economist
restructure operations — a move that could potentially affect 571 employees. On Wednesday, 250 NUM members staged a sit-in at the mine after the retrenchment announcement.
Sibanye-Stillwater said last week it had limited layoffs at its Kloof 4 shaft, a gold operation in Westonaria, to 575 employees. It also warned in October that it may cut more than 4,000 jobs at its struggling local platinum group metals (PGM) operations.
Anglo American is restructuring its global corporate office, including in South Africa. Its subsidiary Kumba Iron Ore is also cutting jobs.
In September, Seriti Resources’ Klipspruit mine and Glencore’s iMpunzi coal complex announced job cuts, blaming Transnet Freight Rail’s underperformance, which has resulted in lower volumes being railed to ports.
The DMRE said given high unemployment and the need to preserve jobs, the government is concerned about the potential job losses in mining.
“As part of regular engagements with the mining companies and the Minerals Council South Africa, there are ongoing discussions on how to best prevent the looming job losses,” the department said.
Gideon du Plessis, general secretary of trade union Solidarity, said since the planned retrenchments will compound unemployment, more people will join illegal mining activities to look after their families since there are limited options for out-of-work miners.
Union rivalry is also contributing to the challenges in mining because the recruitment pool is getting smaller.
“This creates more instability and becomes a vicious cycle in the sense that you will have more health and safety incidents like at Impala because it is an unstable environment. We are concerned,” he said, referring to the shaft accident at an Impala Platinum mine in Rustenburg in November in which 13 mineworkers died.
Minerals Council chief economist Hugo Pienaar said the South African mining in-
dustry is under significant economic and financial pressure, underscored by the third-quarter real GDP data released by Stats SA this week.
The mining sector contracted by 1.3% year on year in the first three quarters of 2023. This follows a steep contraction of more than 7% in 2022.
“Mining is one of only two sectors where value added, measured year on year, declined in 2022 and again during the first three quarters of 2023. The other sector is electricity and water.”
Pienaar said that along with the GDP figures, Stats SA released sectoral gross operating surplus data, a broad measure of profitability in the major sectors.
“The results are stark, with the gross operating surplus in mining tanking by 22.5% year on year in the first nine months of 2023. This is by far the worst performance of all the key sectors in the economy.
“If the mining sector is excluded from GDP, the countrywide [non-mining] operating surplus increased by 8.4% year on year through September 2023. The divergence in profit growth between the mining sector and the rest of the economy was already evident in 2022, when, according to the gross operating surplus data, profits stagnated in mining while they rose by more than 9% in the non-mining economy,” he said.
Pienaar said lower commodity prices in some subsectors of the mining industry, mainly coal and PGMs, have compounded the adverse impact of supply-side constraints that include load-shedding and power constraints.
“Increasing cost pressures such as the steep increase in electricity prices and labour costs have further served to undermine the sector.”
He noted that the private sector and government are trying to address these constraints and unlock the economy.
Pienaar said President Cyril Ramaphosa’s energy reforms in July 2022 were a welcome game-changer, but further urgent and significant reforms to enable greater private sector participation in rail and ports are urgently required.