Mining: Cosatu engages industry, govt in talks amid job cuts

Following plans by embattled mining houses to retrench thousands of workers, labour federation Cosatu yesterday launched last-ditch efforts to engage government and the industry over the pending job cuts.

Cosatu affiliate the National Union of Mineworkers threatened to embark on mass action over the planned cuts as several mining companies already issued retrenchment notices to workers, with the federation saying it was “deeply concerned” about the implications.

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“We are engaging government and industry to avoid any job losses,” said national spokesperson Matthew Parks.

“To avoid these job losses, more must be done to ensure load shedding does not return and the performance of Transnet Freight Rail and the National Ports Authority continues to improve.

“Industry needs to look at alternatives to retrenchments in an economy already battling unemployment,” Parks said.

Citing a decline in profits, underperformance and lower commodity prices, Minerals Council South Africa chief economist Hugo Pienaar said the mining sector crisis illustrated the “cyclical nature of mining sector profitability”.

Potential job losses in the mining industry were not compensated for by employment gains in other parts of the economy, likely set to drive up the unemployment rate.

“In the near term, severance packages and pension payouts mean that the hit to disposable income is not immediate, with payouts set to sustain families of mineworkers for some time as they look for alternative employment,” said Pienaar.

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Retrenchments, he said, were “always a last resort”.

“The companies first aim to cut costs through reductions in capital expenditure, as well as other cost-saving exercises.

“If poor conditions persist, restructuring of operations, including lower production and retrenchments, is unfortunately necessary to sustain the overall financial viability of the company. “Restructuring, which includes reductions in employees, is usually the last resort,” said Pienaar.

“The Minerals Council is engaged with the Presidency to address the electricity and logistics constraints. Crime and corruption are another.

“The council is also engaging the government about regulations and policies that are conducive to investments in the mining industry – to encourage exploration, mine development and operating mines – so that the sector grows, creates jobs and contributes more to the economy.”

Sibanye-Stillwater – among mining companies gearing up to retrench up to 4 000 of its employees – said industry was “currently marginal, with many operations in a loss-making situation”.

“Costs have continued to go up, above inflation rate, also driven by electricity tariff increases and disruptions in operations, due to logistical issues at Transnet.”