Adversarial relations between South African mining companies, labor and the government are heightening the risk of more job cuts in an industry plagued by falling prices, Anglo American Plc Chief Executive Officer Mark Cutifani said.
The nation’s ruling African National Congress this week criticized companies such as Glencore Plc, Anglo’s Kumba Iron Ore unit and Lonmin Plc for announcing plans to reduce their South African workforces. Between them, they intend to cut staff by more than 7,500 amid a plunge in the prices of coal, iron ore and platinum. Strikes in the country have disrupted mines for as many as five months and have sometimes lead to deaths, including 34 in one day at Lonmin’s Marikana mines.
Working with unions and the government to address labor, migrant and social issues “would actually allow us to operate our plants more hours, which provides more employment because we’re more productive,” Cutifani said at a lecture in Johannesburg Thursday. “In a country where we have adversarial industrial relations that’s a tough conversation, but we have to have that conversation if we are going to change the future of our industry.”
Mining companies that cut jobs were “lazy,” Gwede Mantashe, general secretary of the ANC, said July 24.
“Company CEOs and management should look into other solutions and review plans to cut jobs,” he said.
Under apartheid, cheap black labor was used to build the economy, with workers living in single-sex hostels. Most of the miners were migrants from distant provinces such as the Eastern Cape and neighboring countries.
South Africa’s mining industry has underperformed global peers in recent years as investors are scared off by uncertainty over regulations and unfriendly policies, Cutifani said.
“If we cannot at least arrest its decline in productivity and reduce our costs, we won’t have a viable industry,” he said.