Categories: Business NewsNews
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2023-11-28 11:35 AM

South African Mining Sector Braces for Massive Job Losses

  • Potential Job Losses in South African Mining Sector: The article highlights the imminent threat of substantial job cuts, estimated at around 10,000 within the next two months, across various companies operating in South Africa's platinum group metal (PGM) sector.
  • Factors Driving Workforce Reductions: Declining prices of crucial metals like platinum and palladium, coupled with operational disruptions and escalating operational costs such as electricity and water, have prompted major mining companies like Anglo American Platinum, Wesizwe Platinum, Sibanye Stillwater, ArcelorMittal, and Impala Platinum to consider restructuring and downsizing.
  • Industry Response and Market Impact: Companies have initiated consultations and restructuring plans, with Wesizwe Platinum already exploring significant job cuts at one of its mines, causing share prices to plummet. While some firms offer voluntary separation packages, the overarching impact of these potential job losses on South Africa's employment landscape and economy is profound and concerning.
By Miriam Matoma

The National Union of Mineworkers (NUM) in South Africa has issued a dire warning, indicating that approximately 10,000 jobs within the mining sector are at risk of being axed in the upcoming two months. This announcement casts a dark shadow over the nation’s already challenging employment landscape, leaving workers and their families in distress during what should be a celebratory festive season.

The distressing revelation emerges against the backdrop of a tumultuous period for companies operating within the South African platinum group metal (PGM) sector. A confluence of factors, including substantial drops in metal prices and persistent operational disruptions, has propelled several prominent entities—Anglo American Platinum, Wesizwe Platinum, Impala Platinum, and Sibanye Stillwater—to contemplate substantial workforce reductions.

The plummeting prices of crucial precious metals like platinum and palladium have significantly impacted the profitability of these companies, with declines of approximately 11% and 40%, respectively, over the course of this year alone.

Anglo-American Platinum made headlines recently by signaling potential staff reductions at two of its South African units. However, the extent of these cuts remains undisclosed pending further consultations.

Wesizwe Platinum, partially owned by the Chinese group Junchuan Group International Resources, has initiated discussions to potentially slash 571 out of 761 positions (75%) at the Bakubung platinum project mine in the North West province. The company stressed the absence of viable alternatives and the necessity to implement measures to bolster efficiencies and pave the way for Bakubung’s profitability and growth.

The repercussions of these announcements reverberated through the financial markets, evident in Wesizwe’s share price plummeting by over 13% on the JSE.

Sibanye-Stillwater, in an October declaration, unveiled plans to restructure its PGM operations, impacting 4,095 full-time employees and contractors across various mining shafts. The company attributed this restructuring to escalating electricity and water costs coupled with the declining prices of PGM.

ArcelorMittal, not immune to the industry’s turmoil, confirmed deliberations about potentially cutting around 3,500 jobs at its Vereeniging and Newcastle plants. This underscores the widespread impact of economic challenges on multiple sectors within South Africa.

Impala Platinum, earlier this month, announced its proposal for “voluntary job cuts” at its Rustenburg mining complex in the North West province. The exact number of job cuts remains undisclosed, although the company’s spokesperson highlighted the earnest efforts to curtail expenses, citing labor as a significant cost factor.

In the face of these challenges, companies are exploring various avenues to trim costs, with labor being a focal point through the provision of voluntary separation packages. The evolving situation within the mining sector casts a somber outlook on the immediate future, exacerbating the already alarming unemployment levels in South Africa.

As the industry grapples with these adversities, urgent measures and sustainable strategies are imperative to safeguard jobs and foster a path toward economic recovery. The National Union of Mineworkers remains steadfast in its commitment to advocating for the welfare of workers and seeks viable solutions in collaboration with stakeholders to mitigate the looming crisis gripping the mining sector in South Africa.

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Miriam Matoma

Miriam is a freelance writer, she covers economics and government news for Rateweb. You can contact her on: Email: Twitter: @MatomaMiriam

Tags: Job losses