Ticking time bomb: challenges facing the mining industry must concern everyone – Cosatu
|Published
By Solly Phetoe
The challenges facing the mining industry must concern everyone. Cosatu and its affiliates, in particular, the National Union of Mineworkers (NUM), are deeply concerned about the alarm bells that have been ringing in the mining sector.
The mining industry has been the backbone of South Africa’s economic and industrial development for more than a century.
It is no accident that our currency, the rand, derives its name from this sector that has left its indelible footprint from the diamond mines of Kimberley to the platinum belt of the North West to the coal mines of Mpumalanga.
There is no corner of the country, from Springbok to Cala, that has not been touched by the mining industry, for better and worse.
While the mining industry’s legacy has been a mixed bag of the good and the bad for South African workers, it has been a major source of jobs. However, the trends in the past 40 years and more recently have been very concerning.
In the 1980s we had more than 1 million jobs in the sector. Today it is about 440 000.
This is an industry that has been retrenching in large numbers for years. While some of this is due to automation as mines become deeper, others are due to mines that have reached the end of their lifespan and others have fallen victim to fluctuating commodity prices and owners who value dividends and profits above the lives and livelihoods of the thousands of mineworkers who have built this industry through decades of sweat, blood and deaths.
South Africa faces many challenges. These range from a 41% unemployment rate and more worryingly a 60% youth unemployment rate. The economy has been limping for some time and in particular since Covid-19. The state is feeling the effects of the decade of state capture and corruption. Many state-owned enterprises and municipalities are under severe stress.
The mining sector, like the rest of the economy, has been hard hit by load shedding, cable theft disrupting Eskom and Transnet, port congestion and a mining rights application system that has ground to a halt in recent years, stifling further investments.
This is a ticking time bomb that we ignore at our peril.
The mining sector is a key source of jobs. It sustains value chains and downstream jobs in their sectors and host communities. It is a major generator of company tax as well as income, VAT and electricity taxes and tariffs.
We have been particularly concerned about the impact the difficulties Transnet Freight Rail and Ports have been having on the mining sector. Since November 2023, several mining companies have commenced retrenchment proceedings. A potential 34 000 mining jobs are feared to be at risk.
Approximately 55% of the R56 billion revenue shortfall in the November 2023 Medium-Term Budget Policy Statement was a direct result of the impact that the challenges at Transnet are having on the mining industry.
In short, with all of our many challenges, this is a crisis that we simply cannot afford to ignore.
The leadership of government and business need to act to avert this potential jobs bloodbath in the mining sector.
The signs of massive job losses in this sector have been clear for some time. What has not been forthcoming are concrete actions from the government and business to turn this situation around while workers are receiving retrenchment notices.
Key to stemming this pending disaster include:
– Additional support to help Eskom end load shedding. We applaud the progress we have seen over the past year in reducing the levels of load shedding, but the past two weeks’ load shedding is a reminder that we are not of the woods yet and more needs to be done to assist Eskom.
– A decisive package of urgent interventions to secure and rebuild Transnet Freight Rail and unblock and modernise the ports. This needs to include appointing competent managers, lifting the debt burden, law enforcement support to tackle crime and corruption including cable theft, investing in its rail and ports infrastructure, training of the staff and assuring employees their jobs are secure.
– Fast-tracking the implementation of the new mining rights application system to revive investments in this jobs-rich sector. The announcement by the Minister of Mineral Resources and Energy, Gwede Mantashe, recently that a new cadastral is being put in place and will address a backlog of applications that is said to be well over 2 500, is welcome. What is key is to fast-track its implementation.
– Engagements in good faith by employers with unions in the sector to identify alternatives to sending mineworkers to the unemployment queue, including enlisting the support of the Unemployment Insurance Fund’s Temporary Employment Relief Scheme.
– Interventions by shareholders to release the exorbitant salaries of mining executives to help pay mineworkers.
What we cannot do is to abandon mineworkers who have built this economy. Cosatu and its tireless affiliate, NUM, will continue engaging the government and business on urgent interventions and solutions.
This is a matter that requires the active involvement of the highest leadership of the state, Eskom, Transnet, law enforcement and the mining industry. The mining sector can and must be turned around.
We simply do not have a choice, but to fix the logistics and network blockages inhibiting its growth. Once resolved, and they can be resolved, not only will the mining sector recover and thousands of mineworkers’ jobs and wages be saved, but many more can be created.
Equally the state will benefit from the significant company taxes the sector generates that we depend upon to fund the quality public services working-class communities and the economy depend upon.
Eskom is being turned around. There have been some signs of improvement at Transnet over the past two months. The announcement of a new mining rights application system gives hope. What is needed now is action and a commitment by the mining industry on a halt to retrenchments.
Cosatu General Secretary Solly Phetoe
BUSINESS REPORT