As the last month of the year began, prospects for a good 2009 for South African mineworkers grew dim as possible large-scale retrenchments loomed in the mining sector.
On Tuesday, as mining companies sought to cope with current economic turmoil, trade unions reported receiving a flurry of Section 189 notices.
These notice inform unions of the company’s intention to cut jobs and begins a 60-day consultative process that can result in retrenchments.
At least 9 000 mineworkers stood to lose their jobs, according to the Section 189 notices received to date by Solidarity trade union, said spokesperson Jaco Kleynhans.
On Tuesday Aquarius Platinum SA announced that 200 employees could be retrenched from January 2009, pending a final decision on restructuring.
Petra Diamonds said an outcome of their operational review at their Helam and Star Fissures mines could be job losses, a figure which Solidarity put at about 350 out of 669 workers.
This week Lonmin Platinum also announced that 1 500 of its worker in Limpopo operations could lose their jobs.
Last week the company said it had begun retrenching 4 000 of its employees at Marikana in Rustenburg in the North West. Lonmin intends suspending open-cast mining there by the end of 2008.
Last month Solidarity said Canadian-based uranium producing company Uranium One had notified it that 1 013 workers could be retrenched from its Dominion uranium mine outside Klerksdorp.
In mid-November DRD Gold announced its East Rand Proprietary Mine (ERPM) underground operations were closed and a consultative process to determine the future of 1 700 workers had began.
Also in November, Simmer and Jack said 500 workers at its Buffelsfontein gold mine could lose their jobs if an optimisation plan was not implemented.
Most companies cited the current economic crisis as a reason for the possible retrenchments; saying operational costs had risen — exacerbated by a weak rand — and metal prices and demand had dropped.
Aquarius Platinum mine said management at its Everest mine near Lydenburg in Mpumulanga were assessing the economic performance of the mine.
”Particularly given the current metals price environment and inflationary pressures … [the mine] is working to optimise its performance in response to these market realities.”
On Tuesday Petra Diamonds said its Helam and Star Fissure mines were under operational review in response to weakening rough diamond prices.
”One of the possible outcomes of the reviews is that the mines will be placed on to care and maintenance programmes.”
This was a semi-permanent shut down, with the intention of continuing operations at a later stage.
Lonmin, the world’s third largest platinum producer, said on Monday: ”In response to the current economic climate … [Lonmin] has commenced a process which may lead to job losses at its Limpopo operations.”
In releasing its annual review in mid-November the company said it was considering certain job cuts as Platinum group metal prices were now some way below the cash cost of production for a significant proportion of the industry.
”The longer this situation prevails, the more companies, including Lonmin, will need to take action to protect their financial position,” the company said at the time.
On Monday, the Minerals and Energy Affairs Department said a mining-sector task team had been set up to investigate possible solutions relating to the global financial crisis.
Director general Sandile Nogxina announced the appointment after a meeting about the situation was held between the department, industry and labour in Pretoria.
Speaking at the meeting, National Union of Mineworkers secretary general Frans Baleni said he had hoped for a moratorium on job cuts.
The meeting had agreed that ”job cuts would be treated with caution and as a last resort”.
Chamber of Mines vice-chairperson David Nonko said at the meeting that a lasting solution needed to be reached.
”Industry understands it is in a crisis. We need to seek solutions.”
Industry ”would act responsibly” when coming to retrenchments, Nonko said.
On Tuesday, Solidarity’s Kleynhans said it was concerned about the ripple effect possible mine retrenchments would have on social welfare in mining communities.
”According to our calculations, about eight people live on one mineworker’s salary.
He said the lifeblood of mining towns would be cut off if the retrenchments were implemented.
”These towns were founded because of the mining activities in the area and they largely depend on prosperity in the mining industry.
”Retrenchments will now also have a direct influence on activities and business in the communities not related to mining,” said Kleynhans.
He said decreased demand in certain metals was ”a short-term problem that requires a short-term solution”.
He said metal prices and demand would rise again.
”The international economy will get better,” said Kleynhans this week.
On Tuesday, NUM spokesperson Lesiba Seshoka said: ”We are definitely going to the consultative talks and our mandate is a clear one … We are going there with the intention to ensure that retrenchments do not take place,” he said. – Sapa