The Country And Its Mining Sector Are Staring Into The Empty Space

The words “tragic” have been used to describe the impending job cuts in two of SA’s major mining sectors – platinum and gold – and the country is in for a tough time.

The mass layoffs and their trickle-down effects spell trouble not only for mine workers and their families but has far-reaching implications for the country’s economy and labor relations.

Gold Fields yesterday announced they planned to cut 1 560 permanent and contractor jobs at their South Deep operation, potentially slashing gold output and impairing the mine by R4.8 billion.

The job cuts at South Deep – according to the company – were inevitable.

“The key challenge has been the difficulty in transitioning to a modern, bulk, mechanized mining approach,” they claimed.

Despite numerous interventions, the mine continued to make losses of more than R4 billion in the past five years.

National Union of Mineworkers (NUM) general secretary David Sipunzi – who this week met Gold Fields chief executive officer Nick Holland – was surprised.

Sipunzi, whose union claims to have over a 2 000 workforce at South Deep, said his organization was “not privy to information on challenges faced by the company”.

“We told Nick we were not aware of any failed attempts to turn around the mine operation. They will have to issue us with a 189 notice to retrench and request facilitated talks. This will certainly have a negative impact on the workers and their families.”

Recently, Impala Platinum Mines (Implants) announced it would cut 13 000 jobs over two years.

All job losses ‘will be legal’
Despite announcements by mining industry leaders Impala Platinum Mines (Implants) and Gold Fields of an intention to cut jobs, the Minerals Council (MC) is confident of the due legal process to be followed.

“Job cuts are not simply something that companies can unilaterally impose,” warned MC spokesperson Charmane Russell.

“There is a very clear process of consultation in place under the Labour Relations Act that includes an independent facilitation by the Commission for Conciliation, Mediation, and Arbitration (CCMA).

“At the end of such a process, the job cuts are unavoidable,” said Russell.

“We must work together in a constructive way to find real and workable solutions. Any ‘backlash’ will only serve to imperil more jobs,” she said.

Certain sectors of the industry, she said, were “under pressure”.

What an expert says:

“Given mine workers who have to support extended families, this is tragic,” said mining analyst Peter Leon.
But, Leon said, Gold Fields and Implants had no other option as “the mines are currently bleeding”.
“Both management will have to go through a process of the Labour Relations Act and are compelled to notify the department of mineral resources of job cuts.
“The problem we are having in the industry is that you are dealing with deep level and high-cost mines. And given the flat commodity prices, regulatory uncertainty bedeviling the industry like the Mining Charter – the industry is not allowed to develop.

Issues include:

Rising operating and overhead costs and consistent failure to meet targets.
Extensive infrastructure and support services required to underpin mining activities.
Poor productivity impacted by poor maintenance practices.

Written by BT

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