/ 25 March 2009

Miners fear for jobs as platinum loses its glister

In British street slang, when something is good it’s ”diamond”.

In Rustenburg, a mining town set amid rolling grassland and quartzite mountains about two hours from Johannesburg in North-West Province, another underground treasure — platinum — is the adjective of prestige.

From the Platinum Sports Bar to the Platinum Furniture Store and Platinum petrol station, the role of the precious metal used mainly in car manufacturing, the fortunes of the region that supplies over 80% of the world’s output is writ large in local business.

It’s also visible in the number of spacious new homes in Rustenburg that were thrown up at the height of the platinum boom of recent years and now stand vacant.

Places like Rustenburg are on the frontline of the global financial maelstrom as it rips through Africa, quashing demand for the continent’s bountiful commodities, leaving a trail of job losses and worsening poverty in its wake.

”The only job you have is the one that you can save,” says Hendrick Monnana, a 32-year-old miner at Lonmin, the world’s third-largest platinum producer, which has announced plans to chop 5 500 jobs.

Standing under a tree in one of Lonmin’s male-only worker compounds, in a landscape of flat-topped pyramidal mine dumps and processing plants with long sloping conveyor belts, Monnana, whose salary feeds six, laments: ”There are no other job opportunities here.”

”I came here in 1978,” says John Lepota, an ageing shaft worker from Lesotho.

Faced with retrenchment, Lepota, whose hacking cough testifies to a lifetime of subterranean toil for a salary too small to have any savings, admits fear.

”I’m getting old now. My hair is grey,” says the father of two.

”I’ll have to go back to Lesotho, but there is no work there.”

A year ago, when new cars were pouring on to the streets of China, platinum, which is used in catalytic convertors, was double the price of gold, causing a stampede to extract it.

Workers crammed into the townships around Rustenburg from all over the country and region, sending the population soaring above the official figure of 400 000 to an estimated 1,2-million, according to acting municipal manager, Peter Ramadikela.

Home for most of the newcomers was a hastily-erected tin shack in a local’s backyard.

The influx put pressure on the delivery of basic services, like water and sanitation and refuse collection, but while there were jobs, the town was spared the deadly xenophobic attacks seen in poor communities around Johannesburg and Cape Town last year.

In a country where unemployment is listed at 23% but the real figure is estimated at closer to 40%, hard times could wreck stability, Ramadikela worries.

Since platinum prices began to plummet last year to about $1 000 an ounce, half that of the prevous year, thousands of people in Rustenburg have already lost their jobs, he says.

The situation is replicated in towns across Southern Africa, where many countries rely on extracting metals, minerals or gems for foreign currency, taxes and employment.

From the diamond mines of Botswana to copper-rich Zambia, tens of thousands of jobs have been shed in the past six months as mines cut back or suspend production.

Rustenburg is trying to mitigate the damage by repackaging itself as a tourist hub ahead of the 2010 World Cup next year. The town is one of nine cities that will host games.

South Africa’s spending on infrastructure for the World Cup is credited with cushioning the economy from the worst of the financial storm. But with output having already contracted 1,8% in the last quarter of 2008, many fear that the worst has yet to come. – Sapa-DPA