Nkomati nickel mine closure could cost thousands their jobs

An aerial view of Nkomati nickel mine in the Lowveld. Image: African Rainbow Minerals website

An aerial view of Nkomati nickel mine in the Lowveld. Image: African Rainbow Minerals website

According to the mine manager, the mine has reached the end of its viable economic life.

Mining magnate Patrice Motsepe’s recent announcement that the Nkomati Nickel Mine on the R541 between Badplaas and Barberton is set to close will leave thousands of workers on the unemployment line.

The company sent a letter to its employees on July 1, informing them that the struggling mine recorded an unprecedented R186 million loss at the beginning of this year, reports Lowvelder.

Its owners at African Rainbow Mineral and Norilsk have suffered severe losses as a result of steadily dropping nickel prices. The mine was unable to sell all the metal produced from June to December last year. The dropping prices resulted in a negative market-to-market adjustment in the region of R158 million.

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Mineworkers received letters signed by the general manager, David Malunga, informing them of imminent job losses last week. An excerpt from the letter reads, “Nkomati mine has, over the past few years, experienced significant operational and economic challenges which management, together with employees and contractors, have worked hard to manage and address.

Image: African Rainbow Minerals

“The volatile nickel market price and above-inflation increases in mining, diesel and electricity costs have contributed to these challenges.

“The mine has now reached the end of its viable economic life.”

The letter continues to say that the “scaling down of jobs” would start towards the end of the 12-month period following the end of the contract between Nkomati and Moolmans on June 30, which was extended to September 30.

Operations at the mine may be coming to a halt within 12 to 14 months. Photo: Mining Magazine

“The most likely outcome is that operations will be ramped down over the next 12 to 14 months, thereafter it will be placed on care and maintenance,” Malunga said.

Besides producing nickel, the opencast mine also produces oxidised chromitite as part of the pre-strip of the future open pits and a large percentage of the labour force is sourced from nearby Machadodorp, Badplaas, Barberton and Mbombela. Businesses such as Bidvest Steiner Lowveld (BSL) also stand to lose around hundreds of thousands of rand in revenue due to contracts with the mine.

BSL general manager Bradley Topham told Lowvelder: “We will engage in discussions with the mine manager to look at a possible reduction in areas no longer in operation, or possible contract loss.”

According to Malunga, the mine would follow a responsible process in the ramping down and that it was engaging with government, union representatives and other stakeholders to ensure proceedings continued in line with its values

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