Series of blunders making the mining sector bleed

Mineral Resources Minister Mosebenzi Zwane suffered another setback when he was forced last week to backtrack on his plan to implement a moratorium on the processing of any new applications for prospecting and mining rights. Business Report reports that, according to mining industry players, the moratorium was the latest in a series of blows to the mining industry and had dimmed any chance of reviving confidence – nearly 70 000 jobs have been lost in the mining industry in the past five years. Zwane said he would not implement the moratorium he announced last month, saying he changed his position after receiving submissions from stakeholders. He also said the use of alternative means to comply with the agreed undertaking on the Mining Charter should be explored.

Three mining companies have outlined plans in recent weeks to lay off more than 20 000 employees and shut mines, with the latest, Sibanye Gold, talking of illegal mining, poor productivity and the strong rand as the factors behind its plans to shed about 10 000 jobs. According to a Business Day report, the job cuts by the three companies, signals how distressed the industry is and just how fragile it is in light of a suspended Mining Charter which would introduce hefty new costs to it.

JSE- and NYSE-listed Sibanye, in moves to restructure its Beatrix West and Cooke gold operations, announced that it will enter into consultation with relevant stakeholders in terms of Section 189A of the Labour Relations Act. Mining Weekly reports that this comes after numerous unsuccessful attempts to contain ongoing losses at these operations. The Cooke operations were also negatively affected by a three-week wildcat strike by employees in June in protest over Sibanye's efforts to bring an end to illegal mining. ‘The decision to commence with this restructuring process has not been taken lightly. The long-term sustainability of the group as a whole is our primary focus and is necessary if we are to continue to deliver superior value to all of our stakeholders,’ Sibanye said.

The National Union of Mineworkers (NUM) is deeply worried about the possible retrenchments of thousands of workers at Sibanye Gold's operations, reports Fin24. The union said that it is 'shocked and disgusted' after it received a Section 189 notice from Sibanye Gold to retrench 7 400 permanent employees at the Beatrix West and Cooke Operations. The number excludes close to 3 000 contractors who are also facing retrenchments, according to NUM. NUM strongly condemns what it calls 'the blackmail unleashed' by mining companies led by Sibanye Gold, AngloGold Ashanti and the Bokoni Platinum mine in announcing massive retrenchments. It regards the actions of these companies as irresponsible. But, the report quotes the Chamber of Mines as saying the mining companies are not NUM's enemy. It said it welcomed better cooperation to save jobs, but that the mining sector is becoming increasingly difficult to operate.

Trade union Solidarity has joined the chorus of those expressing shock and disappointment at the jobs bloodbath expected in the mining industry. ‘When taking into account that every mineworker takes care of about ten dependants and that many more jobs along the line are lost for every full-time miner’s job abolished, the retrenchments will have a major impact on innocent people,’ Fin24 quotes Solidarity general secretary Gideon du Plessis as saying. Solidarity believes Sibanye has acted in haste. ‘This is because of the fact that the trade union recently pointed out to the mining house that some of the mines now affected are following inefficient mining processes resulting in a production bottleneck that prevents the efficient extraction of gold dust,’ claimed Du Plessis. ‘In recent management re-shufflings at some of the shafts that had been profitable in the past, the company replaced competent management teams with inexperienced management teams and that immediately resulted in losses.’

AngloGold Ashanti has, meanwhile, at least three parties interested in buying its Kopanang mine near Klerksdorp in North West, one of two operations the company plans to shut down. City Press reports that it has obtained information that one of the bidders is a 100% black-owned consortium, which has registered a company called Kopanang Shaft 9 with the Companies and Intellectual Property Commission led by local mining engineer Lebo Ramorule and Kopanang mine manager Stephen Manyathela. Kopanang Shaft 9 is reportedly preparing a bid of more than R330m. AngloGold needs slightly less than that to settle all the retrenchment packages for the mine workers, the report says. The second prospective buyer is another consortium said to be led by the Chinese owners of another mine in the area, Tau Lekoa Gold Mine in Orkney, of which Owen O’Brien is the CEO. O’Brien said he could not comment on the matter. The report says the third buyer in the hat is Harmony Gold, which has reportedly been eyeing AngloGold’s local assets for a long time. Meanwhile, the company has not suspended its retrenchment process and has started with its stakeholder meeting facilitated by the Department of Mineral Resources.