BACKGROUND TO
RECENT JOB TRENDS
IN MINING
JUNE 2015
1
Background to recent job trends
in mining
Presentation prepared for the Portfolio
Committee on Mineral Resources
Martin Nicol and Nkosinathi Kweyama – Parliament
03 June 2015
2
Outline
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How many people work in mining?
What are the latest trends in employment?
Mitigation measures in place
Why are jobs under pressure?: economic context
Outlook for jobs
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How many people work in mining?
OTHER
700,000
Manganese
Diamonds
600,000
Chromite
Iron ore
500,000
Co
al
400,000
300,000
Gold
200,000
100,000
PGMs
Gold
Coal
Iron ore
Chromite
Diamonds
Manganese
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
PGMs
OTHER
Latest trends in employment?
• Total industry employment in the mining
sector dropped to 493 000 from 508 000
during the 2013-2014 financial year
Mine job losses in 2014
Jan-2014 Dec-2014
Job loss Percent fall
Gold (labour in service)
122 800
117 372
-5 428
-4%
PGMs (labour in service)
192 431
191 206
-1 225
-1%
TOTAL industry
499 000
492 000
-7 000
-1%
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Recent announcements
Company
Commodity
Lonmin
PGM
Anglo
American
Platinum
PGM
Employment
present
employment
35,000
Job cuts
(biggest
employer)
 Job cuts 474 (more possible)
 Doornkop restructuring may
cost 3,000 jobs – 29 May;
 400 job cuts announced
(Masimong – 11-May);
 1 271 jobs cut in Feb-15
(Kusasalethu)
 430 jobs cut in Feb-15
Harmony
Gold
present
employment
34,686
Sibanye
Gold
employment
36,274
 Possible job cuts 3,500
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Mitigating the impact
• The loss of jobs is distressing
• It undercuts the predicted increases in mine
employment in the National Development Plan
• But mining is always prone to fluctuations
• Mining has a tradition of negotiation around
economic realities
• Strong provisions are also there in the law – in
the Labour Relations Act and the MPRDA
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MPRDA
• A social and labour plan (SLP) has to be in
place for every mine in South Africa
• This has to provide for managing and sharing
the burdens of “downscaling and
retrenchment”.
• Every mine has to have a plan for
downscaling, just as every mine has to have a
plan to spread the benefits of mineral wealth
more widely when it is profitable.
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Why are mining jobs under pressure?:
The economic context
• Wold Economy still Recovering from 2008
• GDP Growth in 2014 (3.4%) expected (3.5%) in
2015 (IMF)
• Chinese growth has decelerated (7% vs 10%)
• EU showing marginal improvement (0.4%)
• US shrank (-0.7)
• Major trading partners growth not convincing
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Outlook for jobs in mining
• Chinese, EU and US PMI (50,52 and 51)
• Positive outlook require (Moody's)
• PMI to exceed 55 for three consecutive months
(China, EU and US)
• IMF GDP world growth forecast of 4%
• Given current conditions labour market in the
industry is expected to remain tight
• Depreciating local currency support local industry
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Jobs Outlook for Gold mines
2015 to 2025: Chamber of Mines
Present
employment
119,000
106,000
80,000
68,000
Need to replace employment lost in gold with new mines in
other sectors: need for more investment and for exploration.
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References
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Aboobaker, S. (2015) Amplats puts 474 jobs in firing line. Business Report. 30 April.
Chamber of Mines of SA (2015) SA gold, today and tomorrow fact sheet: wage negotiations for the gold industry 2015. 29 May.
Department of Minerals and Energy - GNR.527 of 23 April 2004: Mineral and Petroleum Resources Development Regulations (as amended).
Department of Mineral Resources (DMR) (2014q) Labour In Service - Summary – Monthly: Period From: 2014:01, Period To: 2014:9. PRELIMINARY
(Directorate: Mineral Economics December 2014).
DMR (2015c) Minister concerned at rate of retrenchments at mining companies. Media Statement. 12 May.
DMR (2015q) Labour In Service - Summary – Monthly, Period From: 2014:01 To: 2014:12 PRELIMINARY. (Provided to the Research Unit by email 30Mar-15).
Faku, D. (2015b) NUM, gold producer stand-off in the wings. Business Report. 13 May.
Faku, D. (2015c) Chamber trashes charter report. Business Report. 15 May 2015.
Faku, D. (2015a) SA mining sector bleeds jobs. Business Report. 11 May.
Harmony Gold Mining Company Limited (2015) Harmony restructuring for profitability. [Internet]. < https://www.harmony.co.za/investors/newsand-events/company-announcements-2/announcements-2015/854-harmony-restructuring-for-profitability> 08 May.
Harmony Gold Mining Company Limited [Internet]. < https://www.harmony.co.za/ >.
Janse Van Vuuren, A. (2015) Implats and Lonmin in union talks on closures. Business Day. 7 May.
Mantshantsha, S. (2014) Sibanye Gold enters consultation process to boost productivity. Business Day. 12 September.
McKay, D. (2015a) Tribunal gives nod to Sibanye Cooke 4 restructure [Internet] Miningmx. 20 April.
McKay, D. (2015b) Harmony confirms restructuring at Doornkop. [Internet]. <miningmx.com>. 29 May.
McKay, D. (2015c) Implats calls off Marula sale, looks to expand. [Internet]. <miningmx.com>. 27 May.
National Planning Commission (2012) National Development Plan 2030: Our Future – make it work.
Nicol, M. (2013) Transformation in the mining industry: social and labour plans. Research Unit, Parliament. 13 May.
Parliament (2015) Committee shocked by retrenchment of 474 mine workers. Media statement issued by Parliamentary Communication Services on
behalf of the chairperson of the Portfolio Committee on Mineral Resources, Mr Sahlulele Luzipo. 30 April.
Parliament. Committees. (2013) Report of the Portfolio Committee on Mineral Resources on the public hearings on the Mining Charter, dated 5 June
2013. ATC130607. Available at: <http://www.pmg.org.za/files/doc/2013/comreports/130607pcminreport.htm> [Accessed 18 June 2013].
Ramatlhodi, N. (2015) Minister of Mineral Resources 2015 budget speech. 7 May.
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