Tags: South Africa | mining | workers | jobs

FT: South Africa's Miners Face Hard Times as Prices Collapse

FT: South Africa's Miners Face Hard Times as Prices Collapse

By    |   Monday, 08 February 2016 12:59 PM

The global collapse in commodity prices is being felt especially hard in South Africa, home to some of the world’s richest mineral deposits.

Mining companies may cut about 32,000 jobs in the country, or about 6 percent of the industry’s work force, according to a report in The Financial Times. The industry faces rising electricity costs, wages that  outstrip inflation and a government that is seen as hostile to business.

 “The big problem is that it is not an investor friendly climate. There is a toxic cocktail of issues that needs to be addressed. The mindset needs to change,” Neal Froneman, chief executive of Sibanye Gold, a large South African miner, told the newspaper.

Energy costs make up 17 percent of operating costs for platinum miners, compared with 6 percent to 7 percent five years ago, according to data cited by the FT. For gold miners, energy was about 12 percent of operating costs and is now about 23 percent.

Major mining companies have left the country in droves. BHP, the largest global miner by market value, basically cut ties to South Africa when it spun off its operations in a new company called South32 last year. Rio Tinto, Glencore and Anglo American have either cut back operations or have a small presence in the country.

“Commodity prices have fallen for quite some time and that is causing problems in term of jobs and restructuring,” Mineral Resources Minister Mosebenzi Zwane said last month. “We are engaging with companies to try and see how best we can deal with that situation in a responsible way.”

Mining accounts for more than half of the nation’s exports and employs about 440,000 people, a critical source of jobs in a nation with a 25 percent unemployment rate, according to Bloomberg News.

The department will seek to soften the blow of job cuts by transferring workers to other mines, retraining employees and asking companies if they can cut costs in other ways, Zwane said.

“Where there are job losses, we’ll put in mechanisms to deal with that situation,” he said. “We’re going to do everything possible in our power to try and control the situation until the price of commodities improves.”

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The global collapse in commodity prices is being felt especially hard in South Africa, home to some of the world's richest mineral deposits. Mining companies may cut about 32,000 jobs in the country, or about 6 percent of the industry's work force.
South Africa, mining, workers, jobs
367
2016-59-08
Monday, 08 February 2016 12:59 PM
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