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Nine shafts closed, 3 000 jobs lost in the platinum sector

05 Dec 2012
JOHANNESBURG ( – The past six months have seen 3 332 workers lose their jobs in the platinum mines, Mineral Resources Minister Susan Shabangu said.

In a November 23 response to a Parliamentary question, published this week, Shabangu said that an “unfavourable economic climate” in the sector resulted in the closure of nine shafts.

The already-strained sector, which battled cost pressures, negative market conditions, strained capital expenditure (capex), soft platinum-group metal prices, weak demand and declining output, had temporarily halted many platinum-producing operations as mines were besieged by lengthy and often violent strikes over the past few months.

Many South African mining companies, particularly in the platinum and gold sectors, had yielded to wage demands and were now warning of job losses, cuts in capex and restructuring under higher labour costs.

The Congress of South African Trade Unions previously commented that the mining industry overall had already lost 4 800 jobs between February and June and expected this to rise to 10 000 owing to the wage dispute. The Statistics South Africa Quarterly Labour Force Survey revealed a loss of 8 000 jobs overall in the mining industry during the three months ended September.

In September, Lonmin became one of the first platinum mining companies to close a shaft, as its K4 shaft at the Marikana mine, in the North West, went onto care and maintenance, costing 1 200 jobs. It also cancelled plans for a new development, which could have created 3 000 jobs.

Impala Platinum cut R1-billion from planned capex in the next year after reporting underperforming financial results in the year ended June 2012. The group experienced a six-week violent strike in February.

Anglo American Platinum said the results of its business review, which is widely expected to lead to shaft closures and job cuts, would be published early in the New Year.

Last month, Fitch Ratings warned that cost inflation would have a more “visible” negative impact on mining companies in 2013, than has been the case in recent years.

A bleak macroeconomic outlook in western economies and concerns about growth in China would impact on commodity prices, which have remained weak since last year, but wage inflation and rising energy prices continued to drive mining cost inflation.

The Department of Mineral Resources declined to provide further details on the Parliamentary response.