The evil of unemployment should be our common enemy

SA has unacceptably high levels of unemployed people, in particular among the youth. To quote Ellen Wilkinson, the former British Labour politician, “unemployment is a national danger and a national scandal”. The level of employment is an important measure of the economic health of society, and by that measure alone we are failing as a country. The latest figures released by Stats SA pre-lockdown indicated an official unemployment rate of 30%, with the expanded definition of unemployment, which includes discouraged work seekers, significantly higher. In the second quarter of 2020, the economy shed a further 2.2-million jobs as a result of the lockdown measures taken in response to the pandemic.

It is clear that we are not a rich nation and we are not able to throw money at the problem, as has been done in other parts of the world. However, good policy costs little, and the government must prioritise employment-friendly initiatives at the centre of economic strategy. Not to do so would significantly impact the pace of recovery and limit the growth potential of the country.

Meaningful, sustainable employment is the basis for personal pride and self-esteem. The salary earner is quite often the only breadwinner in an extended family, and formal employment brings community stability and local economic development.

The private sector creates employment through the application of capital, and the mining industry in particular has the ability to employ large numbers of unskilled and semi-skilled people in the largely rural areas in which we operate. In the mining regions there is a dearth of economic opportunity, and the need is great.

There are a number of shovel-ready mining projects in SA which should happen in the current environment of rising commodity prices.

However, policy uncertainty surrounding the Mining Charter is inhibiting the capital allocation decision-making of company boards.

Mining projects by nature are capital intensive and have long-dated cash flow returns. When board members are confronted with the uncertainty associated with the ownership element of the Mining

Charter, the decision to initiate a project becomes much more difficult, and sometimes impossible to make.

Mining sits at the base foundation of the economic triangle, and we have a very high multiplier effect into the broader economy.

Unfortunately, a number of large projects are lying fallow in the ground, companies are choosing to allocate capital in other jurisdictions and some of the larger companies continue to disinvest from SA.

It is essential that the government and industry put aside ideological differences and come together around the table to discuss these issues in a genuinely open-handed fashion. We need to prevent further capital flight from the country, and I am not sure that the long-drawn-out legal route will be timeous enough for the needs of our country and its people.

As one of my fellow CEOs remarked recently, we are drifting into a transactional relationship and this will lead to short-termism and sub-optimal outcomes.

Northam Platinum is a medium-sized mining company operating in the platinum group metals industry. We have pursued a counter-cyclical growth strategy over the past six years, and this has resulted in a capital investment totalling R11bn and the creation of approximately 6,000 direct, meaningful and sustainable jobs. By far the majority of these new employees come from our host communities. This demonstrates how mining can contribute to society. Unfortunately, there are only a few examples that we can point to in recent times.

Much more can be done if the right investment environment were to be enacted. The government has the ultimate responsibility to create the conditions, and in turn South African business leaders can deliver and do what is required to emerge from our economic spiral.

Of the numerous social issues facing us as a country, I believe that unemployment, particularly among the youth, is the most critical, and in my opinion, unemployment is the greatest of all economic evils and no matter which side of the political spectrum you sit, this should be our common enemy.

Dunne is the CEO of Northam Platinum and has been working in the South African mining industry since 1987

Government and industry must put aside ideological differences