Government must brief Parliament on plan to prevent mining job losses

Forecasts indicate that a combination of electricity supply constraints and labour strikes will result in a reduction in mining output this year. Even a conservative estimate of a 1% contraction will result in more than 8 000 jobs being lost. 

Clearly, something needs to be done.

I have written to the chair of the Portfolio Committee on Mineral Resources, Mr Fred Gona, to ask him to invite the Ministers of Mineral Resources, Energy, Labour and Public Enterprises to brief the committee on their collective plan to prevent job losses in the mining sector this year. For the first time, Eskom last week admitted that it had breached its electricity supply reserve margin of 11.7%. This uncertainty disincentivises investment in mining. 

The mining sector is South Africa's single largest employer, accounting for 500 000 direct jobs at present. On the back of a 12.7% reduction in mining output last year, South Africa cannot afford the job losses associated with further reductions.

Conservative modelling suggests that a 3%-4% growth rate in the mining sector would create 100 000 jobs. But if the sector contracts by even 1% this year, as now seems likely, approximately 8 300 jobs will be lost. This is a dear price to pay for something which can be mitigated through appropriate planning and foresight.

Mining sector jobs are at risk as it is. 

A six-week strike at Implats this year cost R2.4bn in revenue and 2 000 people lost their jobs owing to diminished operational capacity. 

The 2012 Survey of Mining Companies, which measures mining exploration attractiveness, placed South Africa 54th out of 93 global mining jurisdictions. Despite the fact that we have the highest value of mineral wealth deposits in the world, our overall ranking was lower than that of Burkina Faso, Mali, Ghana, Namibia and Tanzania. We also ranked 69th on the corruption score. This means that South Africa is increasingly unlikely to be able to attract responsible mining houses to extract our resources, further compromising job creation and environmental sustainability. 

In light of the early warning forecasts, it is imperative that government departments act urgently and in a coherent and well-coordinated manner to ensure South Africans that it is doing everything possible to prevent unnecessary job losses in the mining sector.

Statement issued by James Lorimer MP, DA Shadow Minister of Mineral Resources, March 28 2012

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