South African President to Broker Talks on Mining Job Cuts

  • Companies plan to cut as many as 12,000 jobs as prices plunge
  • Country needs to strike balance between saving jobs and mines

South Africa will broker talks with its biggest mining companies and unions to try to limit thousands of planned job cuts, while preventing high costs and plunging commodity prices from closing mines, President Jacob Zuma said.

"There’s culture in South Africa in talking and discussing the matter," Zuma said in Pretoria Tuesday after meeting with employers and labor groups. "It’s an issue that I think at the moment is being discussed to some satisfaction."

Mining employs about 440,000 in South Africa and makes up more than half of its exports. The government has received notice that as many as 12,000 mining jobs will be cut in the country as prices from iron ore to platinum plunged on slowing growth in China. Unions say the figure could be as high as 19,000.

Commodity prices at the lowest in 16 years has led to friction between industry and the government, accused of scaring away investment with changes to regulations and failing to deal with unreliable power supplies. Gwede Mantashe, secretary general of the ruling African National Congress, last month branded companies “lazy” for firing staff.

Depressed Prices

"The sustained depressed commodity prices and the risk of job losses necessitated urgent intervention by all stakeholders in our country," Zuma said in a transcript of his opening remarks at the meeting. Government and industry has made progress on issues such as illegal mining, improving informal settlements in mining areas and creating economic zones to boost growth, he said.

The Bloomberg Commodity Index touched a 16-year low on Aug. 26, forcing companies from Anglo American Plc to Glencore Plc to cut costs and sell assets.

"We can’t fool ourselves" that every job will be saved, said Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union, who supports talks to curb the losses.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE