South Africa’s gold mining companies have to explain more clearly and convincingly why the stronger rand obliges them to retrench workers, President Thabo Mbeki said on Friday.
Writing in the African National Congress’ online publication, ANC Today, he said contrary to other positive developments, the future of many workers seemed to be threatened by the strength of the rand.
The mining and the clothing and textile industries, in particular, seemed to have taken the lead in promising serious job losses as a result of the appreciation of the exchange value of South Africa’s currency.
A recent report by Deloitte Touche Tohmatsu said the average cash cost of production in the South African gold mining industry was $222/oz.
The (Mining) Industry Overview 2000 said total production costs in gold mining in South Africa stood at $240/oz, ”making it the world’s lowest cost major producer”.
In the same year, the cash operating profits/metric ton of the gold-mining industry were R64,71, with the dollar/oz price averaging $279,13, and the exchange rate at about R7:US1, Mbeki said.
On Friday morning, the dollar gold price was just over $370/oz, almost $100 higher than it was in 2000.
”With this gap between costs and gross revenues, in dollar terms, the gold mining companies will have to explain more clearly and convincingly why the stronger rand obliges them to retrench workers,” he said.
”A 2002 internet article (minesite.com) on one of the gold companies that have decided to retrench workers, allegedly because of the strength of the rand, says that in the last quarter of that year, the production costs of this company were $186/oz.
”In this situation it is quite possible that the issue of the strengthening of the rand is being used to hide other problems that have arisen because of bad management.
”We had hoped that, at least, the corporate citizens who are proposing or acting to bring despair to thousands of our working people and their families, through retrenchments, allegedly because of the strength of the rand, would have had the decency to discuss this serious matter with our government, before they made their
announcements.
”Apart from anything else, this would have demonstrated that they too have joined the people’s contract to build a better future for all our people, black and white, to help move our country away from its terrible past,” Mbeki said. – Sapa