Global crisis hits SA mining backbone ahead of polls

Every night, John Lepota heads to the communal TV room at his mineworkers compound to faithfully check the latest platinum price on the evening news.

Lepota (51) and his fellow miners are only too aware of the global see-saw: tanking commodity prices and shrinking demand mean slashed jobs. Including the possibility of their own.

“If it’s up, we’re happy,” he said, buoyed by a recent price upswing that he recites to the last cent. “If it’s down, I’ll be jobless.”

Unions estimate that the mining industry, the backbone of South Africa’s economy, will shed 50 000 jobs amid predictions of up to 300 000 job cuts across the board this year.

Two Rustenburg platinum giants, global top producer Anglo Platinum and world number three Lonmin, have already announced plans to shed 15 000 jobs.


“I was terrified,” said Lepota at the news which sent
shock-waves through the small town in picturesque north-western South Africa.

“They were talking here. Even in town. Each and everywhere where you go you find people making sort of groups, talking about this. They say, how are we going to live?”

South Africa holds the planet’s richest platinum deposits and large gold yields but still faces massive inequality, skills shortages and rampant unemployment 15 years after democracy.

The country’s new leaders — to be elected in general polls on Wednesday –will take over an economy careering toward recession on the back of a weakened economy and jaded growth prospects of 1,2% this year after several boom years.

The mining downturn is likely to loom large. Not only do some five million people live off the mining sector and its supporting industries, but in South Africa every job is said to support eight other people, according to the government.

The global fall-out has forced the industry into survival mode, according to the Chamber of Mines whose chief executive Mzolizi Diliza recently predicted that 2009 will be an “annus horribilis”.

The mining industry which directly employs about half a million people was already in a slowdown when the global crisis hit, with output declining by 7,5% last year.

While presidential frontrunner Jacob Zuma has threatened action against mine companies that did not plough back to local communities, the government has held off a new royalties Act to provide relief to the hammered industry.

“It is the first time that we are faced with this type of
challenge from the platinum sector. It’s not just facing the mining industry, it’s a crisis that goes across,” said Mxasi Sithethi of National Union of Mineworkers.

More platinum retrenchments are likely in Rustenburg.

“We’re talking of around 25 000 — half of what we anticipate we are likely to lose in the industry as a whole,” he said.

The dampening industry has also regional consequences for migrants like Lepota, who like thousands of his countrymen left neighbouring Lesotho in 1978 for the underground bounty of South Africa’s mines.

The memory of the platinum price’s plunge to less than $800 an ounce a few months ago is still a fresh memory for those tracking commodity prices on television at the father of two’s Rustenburg compound.

“I’m still worried, especially because I don’t know what’s going to happen,” said Lepota who has stayed on despite Lonmin’s first round of voluntary retrenchments.

“We’re still shivering.” – AFP

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