Platinum mining will create employment for the foreseeable future and gold mining appears to have stemmed the haemorrhaging of jobs of the past six years, figures from Department of Minerals and Energy suggest.
The good news came in a week when platinum touched a two-decade high of $698 an ounce.
According to the department, in 1997 the gold-mining sector employed 338 658 people, but by 2001 this had slipped to 201 698. A recent survey shows the sector employed 194 168 workers at the end of the first quarter of last year. That rose to 199 235 by the end of the third quarter.
The whole mining industry employed 418 864 last September, up from 402 360 a year earlier.
Mining of the platinum group of metals has attracted a steady stream of new workers. In 1997 the sector employed 90 876 workers. But about 10 000 new jobs have been created over the past five years and platinum mining was estimated to provide about 112 000 jobs at the end of last year.
“We think employment figures for gold have stabilised and expect [employment in the] platinum [sector] to increase significantly,” says Roger Baxter, an economist at the South African Chamber of Mines.
The chamber estimates that new projects in platinum mining will absorb R35-billion in capital expenditure by 2005. The projects will lift output from 4,8-million ounces a year to 5,9-million ounces a year.
The biggest of the new projects straddle the North West, Limpopo and Mpumalanga. Angloplat will bring on stream Modikwa and Twickenham mines in Northern Province at a cost of R4,6-billion. The company will also plough R2,7-billion into Styldrift in Rustenburg.
Gold’s tarnished lustre is also shining afresh. Bernard Swanepoel, CEO of Harmony, last week announced that his company also expects to boost staff numbers. In a joint venture with Andile Zungu’s African Vanguard Resources, Harmony will explore Doornkop South Reef, west of Johannesburg. The project is expected to create 2 980 jobs at peak production in six years.
Through its Freegold joint venture with ARMgold, Harmony will mine Thsepong North in Free State and reopen the Nyala shaft, outside Welkom. Nyala will have a seven-year lifespan. Freegold will run all its operations seven days a week and will create another 5 000 jobs.
These 8 000 positions will be created over seven years. Swanepoel expects a quarter of these workers to be taken on within the next year, to add to the company’s pool of 13 000 employees.
He says labour accounts for between 45% and 55% of the company’s costs.
Dennis Mashile, a mining analyst at HSBC, says South African mining has higher labour costs than East and West Africa’s open-cast mines. Significant competitors in North America also have lower labour costs.
One exception to the South African pattern is Target Mine in northern Free State, which produces 350 000 ounces a year yet employs only 500 workers plus 1 000 contractors. However, 900 of the contracting positions will fall away in the next few months.
A conventional South African gold mine of its capacity normally employs up to 2 500 employees.
Mashile attributes this to an “accident of geology” that lends itself to mechanisation.
This week ARMgold unveiled plans that will also help alleviate unemployment. Executive chairman Patrice Motsepe announced plans to spend $50-million on its Free State projects, which will create 2 500 jobs.
But ARMgold’s results reflect the effects of the strengthening rand. Though the group earned 4% more on the dollar gold price at $328 an ounce, the rand price dipped 5% to R99 634 a kilogram.
Gwede Mantashe, general secretary of the National Union of Mineworkers, says his members want a bigger share of the pie. “The windfall enjoyed by mining houses should be used as an opportunity to change the face of mining forever.”
He says inflation in food and transport will make miners push for a wage hike. Workers will also insist that the industry boost the 6% of management positions occupied by blacks, women and the disabled, which makes mining, along with advertising, the least representative of all major industries.
Baxter says the gold price stood at R103 000 a kilogram on Wednesday, down from a December 2001 peak of R120 000, suggesting that talk of a windfall might be misplaced.