THE jobs bloodbath in South Africa’s mining industry is likely to worsen in the upcoming months, the Minerals Council has warned.
This after data from Statistics South Africa earlier this week painted a bleak picture of the state of jobs across the mining industry.
The 2024 first-quarter mining sector employment numbers declined for the first time in six quarters amid stubborn headwinds in the operating framework.
The South African mining sector lost 3000 jobs, or 0.6%, in the quarter to the end of March 2024 to 479 000 compared to the December 2023 employment data.
A reversal of fortunes is now afflicting employment prospects in the South African mining sector, with job losses escalating, especially in the first quarter of 2024.
South African mining companies have been at loggerheads with workers’ unions over worsening retrenchments.
Hugo Pienaar, the chief economist for the Minerals Council said: “Despite the much-needed relief provided by the absence of load curtailment since April 2024, these sectors are likely to remain under pressure for the foreseeable future. This implies a risk of additional mining sector job losses in the next several quarters.”
Sibanye-Stillwater and Impala Platinum, among other large miners, have been laying off workers, while Anglo American said earlier this year that it could retrench nearly 4000 employees from its South African platinum group metal (PGM) operations.
The Minerals Council said the quarterly decline was “indicative of the operational and profitability pressures currently experienced in important subsectors” of the mining industry.
It said the industry was grappling with low commodity prices, especially for the PGM sector. Bulk commodity miners, on the other hand, mainly coal and iron ore, “continue to be undermined by Transnet rail and port inefficiencies” which appear to be taking longer to fix.
As a result of these and other constraints, there are likely to be more job losses in the next few months. Labour union Cosatu had already escalated the mining sector jobs bloodbath to the Presidency ahead of last month’s election.
StatsSA attributed the declines in the quarterly job losses to employment “decreases in gold and PGM” mining.
Despite the quarterly fall in employment figures for the mining industry, jobs created across the sector on a year-on-year basis showed a 0.6% increase or firmed by 3000.
Gross earnings paid to employees in the mining industry during the quarter to March 2023 reflected an annual increase of R2 billion, or 4.4% in March 2024, compared with March 2023. There was, nonetheless, a quarterly decrease of R858 million, or -1.8%, in March 2024 compared to December 2023.
“This was mainly due to decreases in gross earnings in coal, diamonds and chrome mining,” added StatsSA.
Another report released by StatsSA yesterday showed that the total income for the mining industry in 2022 amounted to R906.7bn. Again, that year PGM ore mining accounted for the largest share of income at R373.2bn, representing 41.2% of total industry income. PGM was followed by coal and lignite mining and iron ore which earned R198.9bn and R119.2bn respectively.
Earlier this month, the Minerals Council said costs for South African mining companies rose by 7.2% in April. Costs for gold, coal and platinum group metals were highlighted as having the largest cost increases.
André Lourens, an economist with the Minerals Council, said “high inflation rates for electricity, water, coke, petroleum, transport and storage significantly pressured mining inputs.”
Labour-related costs for the mining industry surged 7.2% while finance costs were 11.8% higher. Machinery and equipment costs rose 7% during the month under review.
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