/ 7 February 2013

Mining sector to bleed jobs for next 20 years

New AngloAmerican chief executive Mark Cutifani
New AngloAmerican chief executive Mark Cutifani

Anglo American's incoming and South African Chamber of Mines president Mark Cutifani also said that on the positive side, this will result in better wages for mining workers as productivity increases bring South Africa in line with countries like Australia when it comes to salaries.

Cutifani was speaking at the mining indaba on Thursday ahead of a panel discussion on mining's contribution to sustainable development.

Speaking to a packed hall he said the mining sector needed to become more community-development orientated if it hoped to grow its business further, because a supportive community was essential for growth.

"We need to move away from an extractive industry to a developmental industry," he said. "We found it is often not about money for communities surrounding mining areas but it's about meeting the communities' needs."

He said the sector urgently needed to change the way it operates if it hopes to continue operating as separate industry. Mining companies do not want to end up subsidiaries of some large multinational, he said.

"One of the challenges is industry and the government standing in different corners and shouting at each other. We need to begin talking in a way that changes the industry for good," he said.

The mining sector's flat performance on the JSE was an indication of problems in the industry, he said. Despite being lucrative with skills and natural resources to tap into, the sector's performance was down 30%, while the All Share on the JSE is 60% up.

"That shows that South Africa is a good investment option," he said.

Cutifani said the job losses would be gradual and workers would be absorbed into new jobs created by the mining sector's development of communities surrounding the mines.

Anglo American and the South African government were recently involved in a war of words over a plan put forward by Anglo American's struggling platinum arm Amplats to retench 14 000 people, largely in the Rustenburg area where it has old and deep mines.

The plan involved redeploying about 9 000 workers and encouraging enterprise development in the sector to provide jobs in other industries.

Cutifani said his company spoke to the Vatican about how to meet the needs of non-governmental organisation in South Africa. Not for "divine intervention in South Africa" he told a chuckling audience but because half of the organisations his company was dealing with around community and mining issues were Catholic church funded.