South Africa is what it is today because of mining. The wealth extracted from our soil has built this country into an African powerhouse.
Mining has always been such a part of the lives of all South Africans – directly and indirectly – that perhaps we have taken it for granted or thought the good times would last forever. Ominously, the recent signs are clear that mining is ailing.
This week, platinum mining company Bokoni, which operates in Limpopo, announced that it was retrenching its entire workforce of 2 600.
The operation will tick over on a “care and maintenance” basis until, and if, the broader economic circumstances again make it profitable.
Company spokesperson Joel Kesler said the mine – jointly owned by Atlatsa Resources and Anglo American Platinum – had lost R500 million in the last six months and that further losses could not be sustained.
The retrenchments at Bokoni follow the announcement last month that Anglo Gold Ashanti plans to retrench 8 500 people from its workforce.
The impact on our economy will be broader than just those 11 000 who will lose their jobs. Mine suppliers and those who supply goods and services to miners will be hard hit and may have to trim their own workforces, as the snowball gathers momentum.
The job cuts are a stark reminder that, if there is no money to be made, or if risks are too great, investors will go elsewhere.
That is part of the nature of an economy where natural resources play such a major role.
But we should try to avoid making it harder for ourselves through ill-considered pieces of legislation like the Mining Charter which, while it aims to benefit the majority, will no doubt help line the pockets of a minority.
Let’s not strangle the goose laying our golden eggs…